<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
--------------------
For the Quarterly Period Ended June 30, 1997 Commission File #0-21942
FIRST PALM BEACH BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 65-0418027
(State of Incorporation) (I.R.S. Employer Identification No.)
450 South Australian Avenue
West Palm Beach, Florida 33401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 655-8511
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ----
The number of shares outstanding of the issuer's common stock, par
value $.01 per share, was 5,030,846 at July 31, 1997.
<PAGE> 2
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995 for Forward-Looking Information........................ 2
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Financial Condition as of
September 30, 1996 and June 30, 1997 (unaudited) ................ 3
Consolidated Statements of Operations for the Three and
Nine Months ended June 30, 1996 and 1997 (unaudited) ............ 4
Consolidated Statements of Changes in Stockholders' Equity
for the Nine Months ended June 30, 1996 and 1997 (unaudited) .... 5-6
Consolidated Statements of Cash Flows for the Nine Months
ended June 30, 1996 and 1997 (unaudited) ........................ 7-8
Notes to Unaudited Consolidated Financial Statements ............ 9-11
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................. 12-16
PART II. OTHER INFORMATION
Item 1 Legal Proceedings ............................................... 17
Item 2 Changes in Securities ........................................... 17
Item 3 Default upon Senior Securities .................................. 17
Item 4 Submission of Matters to a Vote of Security Holders ............. 17
Item 5 Other Information ............................................... 17
Item 6 Exhibits and Reports on Form 8-K ................................ 17
Signature Page ........................................................... 18
Exhibit Index ............................................................ 19
</TABLE>
<PAGE> 3
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
for Forward-Looking Information
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), First Palm Beach Bancorp,
Inc., (the "Company") is hereby filing cautionary statements identifying
important factors that could cause the Company's actual results to differ
materially from those projected in "forward-looking statements" (as such term is
defined in the Reform Act) of the Company made by or on behalf of the Company
which are made orally, whether in presentations, in response to questions or
otherwise, or in writing in this report or any other future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases or other public or shareholder communications. Any statements that
express, or involve discussions as to expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always, through the
use of words or phrases such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "projection," or "outlook") are not
historical facts and may be forward-looking and, accordingly, such statements
involve estimates, assumptions, and uncertainties which could cause actual
results to differ materially from those expressed in the forward-looking
statements. Accordingly, any such statements are qualified in their entirety by
reference to, and are accompanied by, the following important factors that could
cause the Company's actual results to differ materially from those contained in
the forward-looking statements of the Company made by or on behalf of the
Company.
The Company cautions that the following important factors could cause actual
results or outcomes to differ materially from those expressed in any
forward-looking statements of the Company made by or on behalf of the Company.
Any forward-looking statement speaks only as of the date on which such statement
is made, and the Company undertakes no obligation to update any forward- looking
statement or statements to reflect events or circumstances after the date on
which such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of each
such factor on the business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements.
Some important factors that could cause actual results or outcomes to differ
materially from those discussed in the forward-looking statements include those
related to the national economic environment, particularly in the region in
which the Company's subsidiary, First Bank of Florida (the "Bank"), operates,
competition, fiscal and monetary policies of the U.S. Government, changes in
governmental legislation and regulations affecting financial institutions,
including regulatory fees and capital requirements, changes in prevailing
interest rates, credit risk management and asset/liability management, the
financial and securities markets, deposit flows, changes in the quality or
composition of the Bank's loan and investment portfolios, and the availability
of and cost associated with sources of liquidity.
All such factors are difficult to predict, contain uncertainties which may
materially affect actual results and are beyond the control of the Company.
2
<PAGE> 4
PART I - FINANCIAL INFORMATION
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1996 AND JUNE 30, 1997
(DOLLARS IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
(Unaudited)
SEPTEMBER 30, 1996 JUNE 30, 1997
------------------ ------------
<S> <C> <C>
ASSETS
Cash and amounts due from depository institutions $ 19,438 $ 20,069
Interest earning deposits 141,975 44,749
----------- -----------
Total cash and cash equivalents 161,413 64,818
Securities available-for-sale 27,551 34,264
Securities held-to-maturity 6,981 14,986
Mortgage-backed and related securities available-for-sale 105,866 148,570
Mortgage-backed and related securities held-to-maturity 126,407 221,153
Loans receivable - net of allowance for loan losses 1,007,881 1,119,559
Real estate owned 1,626 578
Repossessed automobiles 1,602 522
Office properties and equipment, net 23,077 29,823
Federal Home Loan Bank stock 10,053 13,049
Accrued interest receivable 8,147 9,329
Goodwill 2,825 2,679
Other assets 6,591 7,066
----------- -----------
Total assets $ 1,490,020 $ 1,666,396
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts $ 1,136,722 $ 1,227,277
Advances from Federal Home Loan Bank 201,025 250,950
Securities sold under agreements to repurchase 10,000 10,000
Senior debentures - net of issue costs -- 33,875
Advances from borrowers for taxes and insurance 14,657 12,671
Other liabilities 27,756 27,680
Deferred income taxes (5,565) (5,552)
----------- -----------
Total liabilities $ 1,384,595 $ 1,556,901
Stockholders' equity:
Preferred stock ($.01 par value) authorized 1,000,000 shares; none outstanding -- --
Common stock ($.01 par value) authorized 10,000,000 shares; issued
5,496,375 shares; outstanding 5,093,096 and 5,030,846 (net of treasury
stock) at September 30, 1996 and June 30, 1997, respectively 55 55
Additional paid-in capital 52,891 53,221
Retained earnings, substantially restricted 65,064 69,698
Treasury stock, at cost (403,279 shares at September 30, 1996 and
465,529 shares at June 30, 1997) (8,660) (10,195)
Common stock purchased by:
Employee stock ownership plan (1,769) (1,162)
Recognition and retention plans (161) (147)
Unrealized decrease in fair value on available-for-sale securities
(net of applicable income taxes) (1,995) (1,975)
----------- -----------
Total stockholders' equity 105,425 109,495
----------- -----------
Total liabilities and stockholders' equity $ 1,490,020 $ 1,666,396
=========== ===========
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
3
<PAGE> 5
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------- --------------------
June 30, June 30, June 30, June 30,
1996 1997 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans $22,181 $22,327 $61,672 $65,006
Securities available-for-sale 951 876 2,529 3,967
Securities held-to-maturity 130 260 764 873
Mortgage-backed and related securities available-for-sale 1,197 3,119 3,817 6,431
Mortgage-backed and related securities held-to-maturity 2,265 3,583 7,197 8,021
Other 208 277 618 639
------- ------- ------- -------
Total interest income 26,932 30,442 76,597 84,937
------- ------- ------- -------
INTEREST EXPENSE:
Deposits 12,547 14,665 35,549 42,506
Advances from Federal Home Loan Bank 2,964 3,752 8,995 8,746
Securities sold under agreements to repurchase 143 294 562 589
------- ------- ------- -------
Total interest expense 15,654 18,711 45,106 51,841
------- ------- ------- -------
Net interest income 11,278 11,731 31,491 33,096
Provision for loan losses 1,429 831 3,013 2,200
------- ------- ------- -------
Net interest income after provision
for loan losses 9,849 10,900 28,478 30,896
------- ------- ------- -------
OTHER INCOME:
Servicing income and other fees 774 1,042 2,329 2,997
Net gain on sale of loans, mortgage servicing
rights and mortgage-backed and related securities 376 207 409 1,134
Net gain on sale of securities available-for-sale -- 179 811 508
Miscellaneous 410 524 1,063 1,354
------- ------- ------- -------
Total other income 1,560 1,952 4,612 5,993
------- ------- ------- -------
OTHER EXPENSES:
Employee compensation and benefits 3,628 4,693 11,333 13,535
Occupancy and equipment 1,284 1,839 3,414 4,796
Federal deposit insurance premium 600 191 1,620 785
Provision for losses and net losses on sale of
real estate owned 37 214 29 266
Advertising and promotion 195 179 436 861
Miscellaneous 1,140 1,781 3,073 5,108
------- ------- ------- -------
Total other expenses 6,884 8,897 19,905 25,351
------- ------- ------- -------
Income before provision for income taxes 4,525 3,955 13,185 11,538
Provision for income taxes 1,835 1,603 5,296 4,637
------- ------- ------- -------
Net income $ 2,690 $ 2,352 $ 7,889 $ 6,901
======= ======= ======= =======
Earnings per share:
Primary $ 0.53 $ 0.47 $ 1.55 $ 1.38
Fully Diluted $ 0.53 $ 0.46 $ 1.55 $ 1.36
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
4
<PAGE> 6
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED JUNE 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained Treasury
Stock Capital Earnings Stock
------ ---------- -------- --------
<S> <C> <C> <C> <C>
NINE MONTHS ENDED JUNE 30, 1996
Balance at September 30, 1995 $ 55 $ 51,733 $ 66,592 $(7,283)
Net income -- -- 7,889 --
Accretion of unrealized gain on
securities and mortgage-backed and
related securities transferred from
available-for-sale to held-to-maturity,
net of income taxes -- -- -- --
Change in unrealized losses on
securities available-for-sale
and mortgage-backed and related
securities available-for-sale,
net of income taxes -- -- -- --
Amortization of deferred compensation
Employee Stock Ownership Plan and
Recognition and Retention Plans -- 485 -- --
Issue 299,478 shares of Treasury Stock
for purchase of PBS Financial Corp. -- 496 -- 6,130
Purchase of Treasury Stock at cost
(254,353 shares) -- -- -- (5,615)
Exercise of stock options by certain
directors and employees -- (32) -- 62
Declaration of dividends of $0.30
per share -- -- (1,564) --
------- --------- -------- -------
Balance at June 30, 1996 $ 55 $ 52,682 $ 72,917 $(6,706)
======= ========= ======== =======
</TABLE>
<TABLE>
<CAPTION>
Unrealized
(Decrease)
Increase
In Fair
Common Common Value on
Stock Stock Available- Total
Purchased Purchased for-Sale Stockholders'
by ESOP By RRP Securities Equity
--------- --------- ---------- -------------
<S> <C> <C> <C> <C>
NINE MONTHS ENDED JUNE 30, 1996
Balance at September 30, 1995 $(2,509) $ (621) $(3,356) $ 104,611
Net income -- -- -- 7,889
Accretion of unrealized gain on
securities and mortgage-backed and
related securities transferred from
available-for-sale to held-to-maturity,
net of income taxes -- -- (37) (37)
Change in unrealized losses on
securities available-for-sale
and mortgage-backed and related
securities available-for-sale,
net of income taxes -- -- 351 351
Amortization of deferred compensation
Employee Stock Ownership Plan and
Recognition and Retention Plans 550 280 -- 1,315
Issue 299,478 shares of Treasury Stock
for purchase of PBS Financial Corp. -- -- -- 6,626
Purchase of Treasury Stock at cost
(254,353 shares) -- -- -- (5,615)
Exercise of stock options by certain
directors and employees -- -- -- 30
Declaration of dividends of $0.30
per share -- -- -- (1,564)
------- ------- ------- ---------
Balance at June 30, 1996 $(1,959) $ (341) $(3,042) $ 113,606
======= ======= ======= =========
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
5
<PAGE> 7
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED JUNE 30, 1996 AND 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained Treasury
Stock Capital Earnings Stock
------ ---------- -------- --------
<S> <C> <C> <C> <C>
NINE MONTHS ENDED JUNE 30, 1997
Balance at September 30, 1996 $ 55 $ 52,891 $65,064 $(8,660)
Net income -- -- 6,901 --
Accretion of unrealized gain on
securities and mortgage-backed and
related securities transferred from
available-for-sale to held-to-maturity,
net of income taxes -- -- -- --
Change in unrealized losses on
securities available-for-sale
and mortgage-backed and related
securities available-for-sale,
net of income taxes -- -- -- --
Amortization of deferred compensation
Employee Stock Ownership Plan and
Recognition and Retention Plans -- 945 -- --
Purchase of Treasury Stock at cost
(114,000 shares) -- -- -- (2,668)
Exercise of stock options by certain
directors and employees -- (615) -- 1,133
Declaration of dividends of $0.45
per share -- -- (2,267) --
------- --------- ------- --------
Balance at June 30, 1997 $ 55 $ 53,221 $69,698 $(10,195)
======= ========= ======= ========
</TABLE>
<TABLE>
<CAPTION>
Unrealized
(Decrease)
Increase
In Fair
Common Common Value on
Stock Stock Available- Total
Purchased Purchased for-Sale Stockholders'
by ESOP By RRP Securities Equity
--------- --------- ---------- -------------
<S> <C> <C> <C> <C>
NINE MONTHS ENDED JUNE 30, 1997
Balance at September 30, 1996 $(1,769) $ (161) $(1,995) $ 105,425
Net income -- -- -- 6,901
Accretion of unrealized gain on
securities and mortgage-backed and
related securities transferred from
available-for-sale to held-to-maturity,
net of income taxes -- -- (22) (22)
Change in unrealized losses on
securities available-for-sale
and mortgage-backed and related
securities available-for-sale,
net of income taxes -- -- 42 42
Amortization of deferred compensation
Employee Stock Ownership Plan and
Recognition and Retention Plans 607 14 -- 1,566
Purchase of Treasury Stock at cost
(114,000 shares) -- -- -- (2,668)
Exercise of stock options by certain
directors and employees -- -- -- 518
Declaration of dividends of $0.45
per share -- -- -- (2,267)
------- ------- ------- ---------
Balance at June 30, 1997 $(1,162) $ (147) $(1,975) $ 109,495
======= ======= ======= =========
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
6
<PAGE> 8
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, June 30,
1996 1997
------------ ------------
<S> <C> <C>
Cash flow from (for) operating activities:
Net Income $ 7,889 $ 6,901
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 813 1,413
Employee Stock Ownership Plan and Recognition and Retention Plan
compensation expense 1,315 1,566
Accretion of discounts, amortization of premiums, and other deferred
yield items (534) (799)
Amortization of goodwill 97 146
Provision for loan losses 3,013 2,200
Provision for losses and net losses on sales of real estate owned 29 266
Net (gain) loss on sale of:
Loans 34 (402)
Mortgage-backed and related securities 17 (740)
Other securities (811) (508)
Change in assets and liabilities net of effects from purchase of
PBS Financial Corp.:
Increase in accrued interest receivable (1,440) (1,182)
(Increase) decrease in other assets 1,286 (475)
Decrease in other liabilities net of change in dividends payable (3,084) (322)
------------ ------------
Net cash provided by operating activities 8,624 8,064
------------ ------------
Cash flow from (for) investing activities:
Loan originations and principal payments on loans (227,930) (139,262)
Principal payments received on mortgage-backed and related securities 29,361 43,410
Purchases of:
Loans (3,682) (7,771)
Mortgage-backed and related securities held-to-maturity -- (132,449)
Mortgage-backed and related securities available-for-sale -- (128,815)
Securities held-to-maturity -- (15,413)
Securities available-for-sale (236,988) (151,076)
Office properties and equipment (4,332) (8,159)
Proceeds from sales of:
Loans 20,554 27,747
Mortgage-backed and related securities available-for-sale 8,187 82,070
Securities available-for-sale 138,803 110,424
Repossessed automobiles 10,666 14,321
Real estate acquired in settlement of loans 1,172 2,798
Purchase of Federal Home Loan Bank stock (526) (2,996)
Proceeds from maturities of securities 144,818 41,896
Cash acquired through purchase of PBS Financial Corp., net of cash payments
relating to purchase 9,873 --
Other investing activities (3,365) (9,582)
------------ ------------
Net cash used for investing activities $ (113,389) $ (272,857)
------------ ------------
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
7
<PAGE> 9
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, June 30,
1996 1997
------------ ------------
<S> <C> <C>
Cash flow from (for) financing activities:
Issuance of senior debentures $ -- $ 33,875
Purchase of treasury stock at cost (5,615) (2,668)
Exercise of stock options 30 518
Net increase (decrease) in:
NOW accounts, demand deposits, and savings accounts 42,986 12,655
Certificates of deposit 56,102 77,900
Advances from Federal Home Loan Bank 29,925 49,925
Securities sold under agreement to repurchase (8,427) --
Advances by borrowers for taxes and insurance (3,183) (1,986)
Dividends paid on stock (1,322) (2,021)
------------ ------------
Net cash provided by financing activities 110,496 168,198
------------ ------------
Net increase (decrease) in cash and cash equivalents 5,731 (96,595)
Cash and cash equivalents, beginning of period 25,132 161,413
------------ ------------
Cash and cash equivalents, end of period $ 30,863 $ 64,818
============ ============
Supplemental disclosure of cash flows
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 5,158 $ 189
============ ============
Cash paid for interest on deposits and other borrowings $ 44,839 $ 52,933
============ ============
Supplemental schedule of noncash investing and financing activities:
Repossessed automobiles acquired in settlement of loans $ 11,895 $ 12,426
============ ============
Real estate acquired in settlement of loans $ 399 $ 1,947
============ ============
Change in unrealized loss (gain) on available-for-sale securities,
net of income taxes $ (314) $ (20)
============ ============
On December 8, 1995 the Company purchased all of the stock of PBS
Financial Corp. ("PBS")
Consideration paid for PBS:
Cash $ 1,107
Capital stock issued 6,626
------------
Total purchase price 7,733
Fair value of net assets acquired (4,763)
------------
Goodwill $ 2,970
============
</TABLE>
These financial statements should be read in conjunction with the Notes to
Unaudited Consolidated Financial Statements on pages 9, 10 and 11 herein and the
Notes to Consolidated Financial Statements appearing in First Palm Beach
Bancorp, Inc.'s 1996 Annual Report to Stockholders.
8
<PAGE> 10
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Generally Accepted Accounting Principles
(GAAP) for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X of the Securities and
Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all material adjustments
(consisting of only normal recurring accruals) necessary for a fair
presentation have been included. The results of operations and other
data for the nine months ended June 30, 1997 are not necessarily
indicative of results that may be expected for the entire fiscal year
ending September 30, 1997.
The unaudited consolidated financial statements include the accounts of
First Palm Beach Bancorp, Inc. (the "Company") and its wholly-owned
subsidiary, First Bank of Florida (the "Bank"), and the Bank's
wholly-owned subsidiaries - The Big First, Inc., Retail Investment
Corporation, First Corporate Center, Inc., First Bank of Florida
Mortgage Corporation and PBS Service Corporation. Material intercompany
accounts and transactions have been eliminated in financial statement
consolidation. Certain amounts included in prior periods' consolidated
financial statements have been reclassified to conform to the current
period's presentation.
(2) Conversion to Stock Ownership
The Company was organized in May 1993 as the holding company for the
Bank in connection with the Bank's conversion (the "Conversion") from a
federally chartered mutual savings and loan association to a federally
chartered stock savings and loan association. On September 29, 1993,
the Company completed its initial public offering and sold 5,496,375
shares of common stock at $10.00 per share to depositors, borrowers,
and the employees of the Bank during the subscription offering. The
proceeds from the Conversion after recognizing Conversion expenses and
underwriting costs of $2.5 million were $52.5 million and are recorded
as common stock and additional paid-in capital in the accompanying
consolidated statements of financial condition. The Company utilized
$25.2 million of the net proceeds to purchase all of the capital stock
of the Bank.
In connection with the Conversion, the Bank established for eligible
employees an Employee Stock Ownership Plan ("ESOP"). The ESOP borrowed
$4.2 million from the Company and purchased 423,200 common shares
issued in the Conversion. The Bank is expected to make scheduled
discretionary cash contributions to the ESOP sufficient to service the
amount borrowed. The $4.2 million in stock issued by the Company was
reflected as a charge to unearned compensation and a credit to common
stock and additional paid-in capital. The unamortized balance of
unearned compensation is shown as a deduction from stockholders'
equity. The unpaid balance of the ESOP loan is eliminated in
consolidation. For the quarters ended June 30, 1997 and 1996, ESOP
expenses of $406,000 and $336,000, respectively, were recognized. For
the nine months ended June 30, 1997 and 1996, ESOP expenses of
$1,104,000 and $938,000, respectively, were recognized.
In 1993, the Bank established two Recognition and Retention Plans
("RRPs") which purchased in the aggregate 211,600 shares of common
stock in the Conversion and contributed $2.1 million to fund the
purchase of the RRP shares. Awards which were made at the date of
Conversion vested in three equal annual installments commencing on
September 29, 1994, the first anniversary date of the effective date of
these awards. As of June 30, 1997, all of the awards made under the
RRPs had vested except two awards totaling 10,600 shares made to two
non-employee directors which vest at a rate of 33 1/3% per year
beginning September 17, 1997, one award of 1,000 shares made to an
officer which will vest at the rate of 50% per year beginning June 30,
1998, and one award of 1,000 shares made to an officer which vested
July 15, 1997.
The aggregate purchase price of these shares is amortized as
compensation expense over the vesting period. The unamortized cost of
the RRPs is reflected as a reduction from stockholders' equity. For the
quarter ended June 30, 1997, RRP expense of $30,000 was recognized. For
the quarter ended June 30, 1996, the Bank reversed an over-accrual of
$260,000 resulting in a net reversal in RRP expense of $80,000. For the
nine months ended June 30, 1997, the Bank reversed an over-accrual of
$76,000 resulting in a net RRP expense of $14,000. An expense of
$280,000 was recorded during the nine months ended June 30, 1996.
In 1993, the Company adopted stock option plans for the benefit of
directors, officers, and other key employees of the Bank. The number of
shares of common stock initially reserved for issuance under the stock
option plans was equal to 10% of the total number of common shares
issued pursuant to the Conversion. In January 1997, the stockholders
approved the reservation of an additional 250,000 shares of common
stock for issuance under the 1993 First Palm Beach Bancorp, Inc.
Incentive Stock Option Plan. On March 18, 1997, the Company granted
233,000 non-qualified stock options to certain officers of the Bank at
an exercise price of $29.06, all of which are exercisable as of the
date of grant. On April 28, 1997, the Company granted 10,000
non-qualified stock
9
<PAGE> 11
options to an officer of the Bank at an exercise price of $27.38, all
of which are exercisable as of the date of the grant. On June 30, 1997,
the Company granted 8,000 incentive stock options to an officer of the
Bank at an exercise price of $33.19, which options are exercisable at a
rate of 33 1/3% per year beginning June 30, 1998. Under the stock
option plans, the option exercise price cannot be less than the fair
value of the underlying common stock as of the date of the option
grant, and the maximum option term cannot exceed ten years.
Stock options granted to officers and employees are exercisable based
on schedules approved by the Company's Board of Directors. At June 30,
1997, stock options for 361,581 shares were outstanding to officers and
employees, all but 18,200 of which are currently exercisable. At June
30, 1997, there are 968 options available for future grants to officers
and employees.
Stock options awarded to non-employee directors may be exercised at any
time after grant. At June 30, 1997, there were options for 121,726
shares outstanding to non-employee directors and 26,500 options
available for future grants to non-employee directors.
(3) New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130 "Reporting
Comprehensive Income," which requires that an enterprise report, by
major components and as a single total, the change in its net assets
during the period from nonowner sources; and No. 131 "Disclosures about
Segments of an Enterprise and Related Information," which establishes
annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services,
geographic areas, and major customers. Adoption of these statements
will not impact the Company's consolidated financial position, results
of operations or cash flows, and any effect will be limited to the form
and content of its disclosures. Both statements are effective for
fiscal years beginning after December 15, 1997, with earlier
application permitted.
(4) Earnings Per Share
Earnings per share of common stock for the quarters ended June 30, 1997
and 1996 were determined by dividing net income for the period by the
weighted average number of shares of common stock and common stock
equivalents outstanding which were 5,011,130 and 5,096,957,
respectively, excluding unallocated shares held by the ESOP. Earnings
per share of common stock for the nine months ended June 30, 1997 and
1996 were determined by dividing net income for the period by the
weighted average number of shares of common stock and common stock
equivalents outstanding which were 5,002,295 and 5,099,101,
respectively, excluding unallocated shares held by the ESOP. Stock
options are regarded as common stock equivalents and, therefore, are
considered in both primary and fully diluted earnings per share
calculations. Common stock equivalents are computed using the treasury
stock method. Including stock options in the calculation of primary
earnings per share reduces earnings by $0.01 per share for the three
month periods ended June 30, 1997 and 1996. Including stock options in
the calculation of primary earnings per share reduces earnings per
share by $0.03 and $0.04 for the nine months ended June 30, 1997 and
1996, respectively.
In February 1997, the FASB issued SFAS #128, "Earnings per Share." The
statement is designed to make the earnings per share computation
comparable to International Accounting Standards and is effective for
financial statements issued for periods ending after December 15, 1997.
For the quarter ended June 30, 1997, if basic earnings per share and
diluted earnings per share were computed under the provisions of SFAS
#128 the results would be $0.48 and $0.47, respectively.
(5) Commitments and Contingencies
Commitments to originate loans of $34.9 million at June 30, 1997
represent the total principal amounts which the Bank plans to fund
within the normal commitment period of 60 to 90 days. As of June 30,
1997, the Bank had no commitments to purchase securities.
As of June 30, 1997, the Bank had $3.5 million in commitments to
purchase loans.
(6) Accounting for Impairment of Loans
In May 1993, the FASB issued SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan." The Statement generally requires all creditors
to account for impaired loans, except those loans that are accounted
for at fair value or at the lower of cost or fair value, at the present
value of the expected future cash flows discounted at the loan's
effective interest rate. In October 1994, the FASB issued SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures." This Statement amends SFAS No. 114 to allow a
creditor to use existing methods for recognizing interest income on an
impaired loan. SFAS No. 118 does not change the provisions in SFAS No.
114 that require a creditor to measure impairment based on the present
value of expected future cash flows discounted at the loan's effective
interest rate, or at the market price of the loan or the fair value of
the collateral if the loan is collateral dependent. The Bank adopted
the provisions of SFAS No. 114 as amended by SFAS No.
118 effective October 1, 1995.
10
<PAGE> 12
An analysis of the changes in the allowance for loan losses for the
nine months ended June 30, 1997 and fiscal year ended September 30,
1996, is as follows:
<TABLE>
<CAPTION>
Fiscal Nine
Year Months
Ended Ended
Sept. 30, June 30,
1996 1997
------------ ------------
(In thousands)
<S> <C> <C>
Balance at beginning of period $ 2,157 $ 11,855
Increase in allowance due to acquisition of PBS Financial Corp. 2,253 --
Current provision 15,704 2,200
Charge-offs - net (8,259) (7,300)
------------ ------------
Ending balance $ 11,855 $ 6,755
============ ============
</TABLE>
At June 30, 1997, the Bank's impaired loans consisted of the following:
<TABLE>
<CAPTION>
JUNE 30, 1997
---------------------------------
Loan Related
Balances Allowance
------------ ------------
(In thousands)
<S> <C> <C>
Impaired loan balances and related allowance for loan losses $ 4,184 $ 541
</TABLE>
In January 1997, a home builder in Palm Beach County, who was the
contractor of record on 23 loans to individual borrowers, declared
bankruptcy. The Bank has negotiated with substantially all of the
individual borrowers concerning construction shortfalls to complete the
homes and has settled with such borrowers without material loss to the
Bank. Contractor liens filed against properties are being reviewed by
the Bank's management to assess the extent of their impact on the Bank.
Such impact cannot be determined at this time. The impaired loan
balances above include an unsecured line of credit for $349,000 to the
home builder, which is fully reserved. The reserve amount is included
in the related allowance.
11
<PAGE> 13
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THIS DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS CONTAINED HEREIN AND WITH MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
APPEARING IN FIRST PALM BEACH BANCORP, INC.'S 1996 ANNUAL REPORT TO
STOCKHOLDERS.
General
First Palm Beach Bancorp, Inc., (the "Company") was formed as the holding
company for First Bank of Florida (the "Bank") in connection with the Bank's
conversion (the "Conversion") from a federally chartered mutual savings and loan
association to a federally chartered stock savings and loan association on
September 29, 1993. On that date, the Company issued and sold 5,284,775 shares
of common stock, par value $0.01 per share, at $10.00 per share to complete the
Conversion. An additional 211,600 shares were purchased by the Bank's
Recognition and Retention Plans ("RRPs") at $10.00 per share. Net proceeds to
the Company after $2.5 million in expenses and underwriting costs were $52.5
million. The Company used $25.2 million of the net proceeds to purchase all the
capital stock of the Bank, and lent $4.2 million to the Bank's Employee Stock
Ownership Plan ("ESOP"). The remaining proceeds of $23.0 million were advanced
to the Bank under a note agreement carrying an interest rate tied to the one
month short-term credit advance of the Federal Home Loan Bank ("FHLB") of
Atlanta. The rate on the note was 5.69% during the quarter ended June 30, 1997,
and the balance on the note at June 30, 1997 was $5.9 million.
On December 8, 1995 (the "Effective Date"), the Company completed the
acquisition of PBS Financial Corp. ("PBS") by means of the merger (the "Merger")
of PBS with and into the Company, pursuant to an Agreement and Plan of Merger
between the Company and PBS dated as of May 31, 1995 (the "Agreement").
Concurrently with the Merger, Palm Beach Savings and Loan, F.S.A. ("Palm Beach
Savings"), the savings and loan subsidiary of PBS, merged with and into the Bank
in accordance with a Plan of Merger and Combination dated as of May 31, 1995
between Palm Beach Savings and the Bank. In conjunction with and as a part of
the Merger, each of the 283,700 shares of PBS Class A common stock issued and
outstanding and 419,300 shares of PBS Class B common stock issued and
outstanding at the Effective Date was converted into (i) .426 of a share of the
Company's Common Stock and (ii) a cash payment of $0.75 per share of PBS common
stock. Based on an aggregate of 703,000 shares of PBS Class A and Class B common
stock issued and outstanding, the Company issued in the aggregate 299,478 shares
of the Company's Common Stock and made $527,250 in cash payments. Also in
conjunction with the Merger, the Company paid $88,544 in exchange for all
outstanding PBS Options, and $459,536 in exchange for all outstanding PBS
Warrants.
On June 30, 1997, the Company issued $35 million of 10.35% Senior Debentures due
2002. The net proceeds of the debenture issuance will be used for general
corporate purposes, including contributing $25 million of the net proceeds to
the Bank. The Indenture entered into by the Company in connection with the
10.35% Senior Debentures includes certain covenants which, among other things,
(i) limit the Company's disposition of the voting stock of the Bank, other than
dispositions which (a) are for fair market value and, after giving effect to
such dispositions and to any potential dilution, the Company will own not less
than 80% of the shares of voting stock of the Bank free and clear of any
security interest; (b) are made in compliance with an order of a court or
regulatory authority of competent jurisdiction, a condition imposed by any such
court or authority permitting the acquisition by the Company, directly or
indirectly, of any other bank or entity the activities of which are legally
permissible for a bank holding company or a subsidiary thereof to engage in, or
an undertaking made to such authority in connection with such an acquisition;
(c) are made where the Bank, having obtained any necessary regulatory approvals,
unconditionally guarantees payment when due of the principal of and interest on
the Senior Debentures; or (d) are made to the Company or any wholly-owned
subsidiary if such wholly-owned subsidiary agrees to be bound by the covenant as
if it were the Company and the Company agrees to maintain such wholly-owned
subsidiary as a wholly-owned subsidiary (notwithstanding the foregoing, the Bank
may be merged into or consolidated with another banking institution if, after
giving effect to such merger or consolidation, the Company or any wholly-owned
subsidiary owns at least 80% of the voting stock of such other banking
institution then issued and outstanding free and clear of any security interest
and if, immediately after giving effect thereto and treating any such resulting
banking institution thereafter as the Bank and a subsidiary, for purposes of the
Indenture, no Event of Default (as such term is defined in the Indenture), and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing); (ii) limit, to a percentage of
net worth, the Company's and the Bank's ability to become liable on certain
forms of indebtedness generally outside the normal course of the Company's and
the Bank's business; (iii) provide that the Company will not permit its
Consolidated Net Worth minus Goodwill to be less than $90 million; (iv) provide
that the Company shall not allow the Bank to be classified as other than
"well-capitalized"; and (v) restrict dividend or other distributions of the
Company and the Bank and stock repurchases by the Company in such a way that any
such dividends or stock repurchases after March 31, 1997 may not exceed in the
aggregate, the sum of (a) $10,000,000 plus (b) 75% (or 100% in the case of
deficit) of consolidated net income for the period beginning March 31, 1997 and
ending and including the date such dividend, distribution or stock repurchase
(each a Restricted Payment) is declared or made (plus 100% of the proceeds of
issuances of equity securities after March 31, 1997), and a Restricted Payment
may not be made if at the time of and immediately before the Restricted Payment
is declared, and after giving effect to the Restricted Payment a Default (as
such term is defined in the Indenture) or Event of Default is existing or shall
have occurred within 365 days of the declaration of the Restricted Payment.
12
<PAGE> 14
The Company's consolidated results of operation are primarily those of the Bank.
The Bank's principal business has been, and continues to be, attracting retail
deposits from the general public and investing those deposits, together with
funds generated from operations and borrowings, primarily in one-to-four family,
owner-occupied, residential mortgage loans, consumer loans, and, to a lesser
extent, construction loans, commercial real estate loans, and multi-family
residential mortgage loans. In addition, the Bank invests in mortgage-backed
securities, securities issued by the U.S. Government and government agencies,
and other investments permitted by federal laws and regulations. The Bank is a
member of the FHLB system and its deposits are insured to the applicable limits
by the Federal Deposit Insurance Corporation (the "FDIC"). The Bank is subject
to regulation by the Office of Thrift Supervision (the "OTS") as its chartering
agency and the FDIC as its deposit insurer.
At June 30, 1997, the Bank had 44 full-service branches in Palm Beach, Martin,
Broward, Dade and Lee Counties, Florida. Three loan production offices are
located in Palm Beach County and one is in Broward County. As of June 30, 1997,
the Bank operated four of its full-service branches inside Winn-Dixie
supermarkets and fourteen inside Albertson's supermarkets. The Bank intends to
open additional supermarket branches at Albertson's in the future. During the
quarter ended June 30, 1997, the Bank opened four full-service supermarket
branches.
The Bank has five wholly-owned subsidiaries, only one of which, First Bank of
Florida Mortgage Corporation, which provides mortgage brokerage services to the
Bank, is currently active.
The Bank's results of operations depend primarily on net interest income, which
is the difference between the interest income earned on its loans and investment
portfolio, and its cost of funds, consisting of the interest paid on deposits
and borrowings. Net interest income is impacted by the provision for loan
losses. The Bank's operating results are also affected, to a lesser extent, by
fee income and by gains or losses on the sale of loans, securities and
mortgage-backed securities available-for-sale, and real estate owned. The Bank's
operating expenses consist primarily of employee compensation, occupancy
expenses, FDIC insurance premiums and other general and administrative expenses.
The Bank's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates and U.S. Treasury yield curves, government policies and actions of
regulatory authorities.
Liquidity and Capital Resources
The Bank's most liquid assets are cash, amounts due from depository institutions
and interest-bearing deposits. The levels of these assets depend on the Bank's
lending, investing, operating and deposit activities during any given period. At
June 30, 1997, cash, amounts due from depository institutions and
interest-earning deposits totaled $64.8 million.
The Bank's primary sources of funds are deposits, proceeds from principal and
interest payments on loans, proceeds from the amortization of, the maturing of
and sales of securities, advances from the FHLB and securities sold under
agreements to repurchase ("reverse repurchase agreements"). While maturity and
scheduled amortization of loans and securities are predictable sources of funds,
deposit inflows and mortgage prepayments are greatly influenced by local market
conditions, general interest rates and regulatory changes.
Under OTS regulations, the Bank is required to maintain liquid assets of at
least 5% of the average daily balance of the sum of its net withdrawable deposit
accounts plus short-term borrowings during the preceding calendar month. For
purposes of these regulations, liquid assets consist of cash, amounts due from
depository institutions, interest-bearing deposits and short and intermediate
term U.S. Government and government agency securities. The Bank historically has
maintained a level of liquid assets in excess of this regulatory requirement.
The Bank's liquidity ratio was 7.2% and 16.3% at June 30, 1997 and September 30,
1996, respectively. Liquidity management for the Bank is a daily and long-term
function of the Bank's management strategy. If the Bank requires liquid funds
beyond its ability to generate them internally, additional sources of funds are
available through the use of FHLB advances and reverse repurchase agreements.
The primary investment activity of the Bank is the origination of mortgage and
consumer loans. During the nine months ended June 30, 1997, the Bank originated
mortgage and consumer loans in the aggregate amount of $303.4 million as
compared to $399.3 million for the nine months ended June 30, 1996. This
decrease resulted from the Bank's decision to discontinue originations of
indirect consumer loans. A primary component of the Bank's current strategic
plan is to increase its originations of mortgage and consumer loans, excluding
indirect automobile loans. At September 30, 1996, the Bank discontinued its
indirect automobile lending program, which produced higher delinquency rates and
a level of repossessed assets which management deemed unacceptable and which
resulted in higher loan loss provisions. Repossessed automobiles decreased from
$1.6 million at September 30, 1996 to $522,000 at June 30, 1997. The Bank also
invests in U.S. Treasury and agency securities, collateralized mortgage
obligations, municipal bonds and FHLB overnight funds. During periods when the
Bank's loan demand is lower, the Bank may purchase short-term investment
securities to obtain a higher yield than otherwise would be available.
At June 30, 1997, the Bank had outstanding commitments to originate $34.9
million of loans and had no commitments to purchase securities. At June 30,
1997, the Bank had $3.5 million in commitments to purchase loans. Management is
of the opinion that the Bank will have sufficient funds available to meet all of
these commitments. At June 30, 1997, certificates of deposits scheduled to
mature in one year or less
13
<PAGE> 15
after June 30, 1997 totaled $694.4 million. Based on the Bank's past experience
and current market conditions, management is of the opinion that a significant
portion of these funds will remain with the Bank.
At June 30, 1997, the Bank exceeded each of the three OTS capital requirements.
The Bank's ratios were: 7.47% tangible capital ratio; 7.47% core capital ratio;
and 14.77% risk-based capital ratio. The OTS minimum regulatory capital ratio
requirements at June 30, 1997 were 1.5%, 3.0%, and 8.0% respectively.
Changes in Financial Condition
Total assets increased $176.0 million to $1.666 billion at June 30, 1997 from
$1.490 billion at September 30, 1996. Cash and cash equivalents, securities
held-to-maturity, securities available-for-sale, mortgage-backed and related
securities held-to-maturity and mortgage-backed and related securities
available-for-sale increased $55.6 million to $483.8 million at June 30, 1997
from $428.2 million at September 30, 1996. Office properties and equipment
increased by $6.7 million to $29.8 million at June 30, 1997 from $23.1 million
at September 30, 1996 due to the addition of eleven new branch locations and
capitalized improvements related to the relocation of the Bank's corporate
offices. Loans receivable increased by $112.0 million to $1.120 billion at June
30, 1997 from $1.008 billion at September 30, 1996. Loans originated amounted to
$303.4 million (which included $254.3 million of mortgage loans and $49.1
million of consumer loans) during the nine months ended June 30, 1997 compared
to $399.3 million (which included $250.9 million of mortgage loans and $148.4
million of consumer loans) during the nine months ended June 30, 1996. Indirect
automobile loan balances decreased to $101.7 million at June 30, 1997 from
$148.2 million at September 30, 1996.
Deposit accounts increased $90.0 million to $1.227 billion at June 30, 1997 from
$1.137 billion at September 30, 1996. This increase was attributable to new
office openings and aggressive pricing on certificates. The average interest
rate paid on deposits increased to 4.95% as of June 30, 1997 from 4.87% as of
September 30, 1996.
Advances from the FHLB and other borrowed funds increased $50.0 million to
$261.0 million from $211.0 million at September 30, 1996. As previously
discussed, the Company issued $35 million of 10.35% Senior Debentures due 2002
on June 30, 1997. Stockholders' equity was $109.5 million at June 30, 1997 and
$105.4 million at September 30, 1996. For the nine months ended June 30, 1997,
the major changes affecting stockholders' equity resulted from net income of
$6.9 million offset by treasury stock purchases of $2.7 million. During the nine
months ended June 30, 1997, the Company purchased 114,000 shares of its stock to
be held as treasury stock at an average cost of $23.40, resulting in increases
in treasury stock to $10.2 million at June 30, 1997 from $8.7 million at
September 30, 1996.
Interest Rate Sensitivity
The matching of assets and liabilities may be analyzed by examining the extent
to which assets and liabilities are "interest rate sensitive" and by monitoring
an institution's interest rate sensitivity "gap." An asset or liability is
"interest rate sensitive" within a specific time period if it will mature or
reprice within that time period. The interest rate sensitivity gap is defined as
the difference between the aggregate amount of interest-earning assets maturing
or anticipated to reprice, based upon certain assumptions, within a specified
time period and the aggregate amount of interest-bearing liabilities maturing or
anticipated to reprice, based upon certain assumptions, within that time period.
A gap is considered negative when the amount of interest rate sensitive
liabilities maturing or repricing within a specified time frame exceeds the
amount of interest rate sensitive assets maturing or repricing within that same
time frame.
The Bank's policy is to manage its exposure to interest rate risk by attempting
to match the maturities of its interest rate sensitive assets and liabilities,
in part, by emphasizing, when market conditions permit, the origination of
adjustable rate mortgages ("ARM") and short term residential construction loans.
As of June 30, 1997, these loans made up approximately 51% of outstanding
mortgage loans. Approximately 9% of outstanding mortgage loans are loans with
seven year and ten year fixed rates which become one year adjustable loans
thereafter. These are classified as ARM loans. The Bank also manages its
exposure by purchasing short term securities and short average life and
adjustable-rate collateralized mortgage obligations. The Bank's one year
interest rate sensitivity gap as a percentage of total assets was a negative
23.8% at June 30, 1997 as compared to a negative 4.5% at September 30, 1996.
During the nine months ending June 30, 1997, the Bank purchased approximately
$100 million of mortgage-backed and related securities with annual repricing
periods. As of June 30, 1997, these securities had initial repricing periods
greater than one year that, in July 1997, moved to repricing periods of one year
or less. During a period of rising interest rates, a negative gap would tend to
result in a decrease in net interest income while a positive gap would tend to
increase net interest income.
Asset Quality
The Company and the Bank regularly review interest earning assets to determine
proper valuation of those assets. Management monitors the asset portfolio by
reviewing historical loss experience, known and inherent risks in the portfolio,
the value of any underlying collateral, prospective economic conditions and the
regulatory environment. During the nine months ended June 30, 1997,
non-performing assets decreased $4.0 million to $12.1 million from $16.1 million
at September 30, 1996 due to decreases in non-performing loans, real estate
owned, and repossessed assets during the period. Real estate owned decreased
$1.0 million to $578,000 at June 30, 1997 from $1.6 million at
14
<PAGE> 16
September 30, 1996. Repossessed assets decreased $1.1 million to $522,000 at
June 30, 1997 from $1.6 million at September 30, 1996. As previously discussed,
the Bank discontinued its indirect automobile lending program as of September
30, 1996.
The following table sets forth information regarding the Bank's non-performing
loans, repossessed assets and real estate owned at the dates indicated. The Bank
generally discontinues accruing interest on loans that are 90 days or more past
due, at which time the accrued but uncollected interest is excluded from
interest income.
<TABLE>
<CAPTION>
ASSET QUALITY
(Dollars in thousands)
Sept. 30, June 30,
1996 1997
------------ ------------
<S> <C> <C> <C>
Non-performing mortgage loans delinquent more than 90 days $ 11,279 $ 9,501
Non-performing other loans delinquent more than 90 days 1,552 1,516
Total non-performing loans 12,831 11,017
Real estate owned, net of related allowance 1,626 578
Repossessed assets, net of related allowance 1,602 522
Total non-performing assets $ 16,059 $ 12,117
Non-performing loans to total loans 1.20% 0.94%
Non-performing assets to total assets 1.08% 0.73%
Allowance for loan losses to non-performing loans 92.40% 61.31%
</TABLE>
15
<PAGE> 17
RESULTS OF OPERATIONS
Comparison of results in this section are for the three month periods ended June
30, 1997 and June 30, 1996 and the nine month periods then ended.
General
Net income for the quarter ended June 30, 1997 was $2.4 million as compared to
$2.7 million for the quarter ended June 30, 1996, a decrease of $300,000. Net
income for the nine months ended June 30, 1997 was $6.9 million as compared to
$7.9 million for the nine months ended June 30, 1996, a decrease of $1.0
million. Declines in net income for both the quarter and nine months ended June
30, 1997 resulted primarily from increases in other expenses which offset the
increases in net interest income and other income.
Net Interest Income
Net interest income before provision for loan losses was $11.7 million for the
quarter ended June 30, 1997 as compared to $11.3 million for the quarter ended
June 30, 1996. For the nine months ended June 30, 1997, net interest income
before provision for loan losses was $33.1 million as compared to $31.5 million
for the nine months ended June 30, 1996. The increase in net interest income for
the nine months ended June 30, 1997 was due to an increase of approximately
$222.0 million in earning assets to $1.596 billion at June 30, 1997 from $1.374
billion at June 30, 1996 which was partially offset by a decline in the net
interest margin to 3.03% for the nine months ended June 30, 1997 from 3.22% for
the nine months ended June 30, 1996. The decline in net interest margin was
primarily caused by an increase in the average interest rate paid on deposits to
4.95% at June 30, 1997 from 4.87% at September 30, 1996. The reduction in the
outstanding balance of indirect automobile loans has also contributed to the
decline.
Provision for Loan Losses
During the three months ended June 30, 1997, the provision for loan losses
decreased to $831,000 from $1.4 million for the comparable period ended June 30,
1996. For the nine months ended June 30, 1997, the provision for loan losses was
$2.2 million as compared to $3.0 million for the same period ended June 30,
1996.
Other Income
Other income increased to $2.0 million for the quarter ended June 30, 1997 from
$1.6 million for the quarter ended June 30, 1996. For the nine months ended June
30, 1997, other income increased to $6.0 million from $4.6 million for the nine
months ended June 30, 1996. The increases in other income are primarily the
result of increased servicing income, other fees and miscellaneous income. Net
gains on sales of securities, loans and related mortgage servicing rights were
$1.6 million for the nine months ended June 30, 1997 as compared to $1.2 million
for the same period in the prior year. In November 1995, the FASB issued "A
Guide to Implementation of SFAS No. 115 on Accounting for Certain Investments in
Debt and Equity Securities - Questions and Answers" ("SFAS 115 Q&A Guide"). SFAS
115 Q&A Guide included a one-time opportunity for entities which had previously
adopted the provisions of SFAS 115 to reconsider their ability and intent to
hold securities to maturity and to allow such entities to transfer securities
from the held-to-maturity category to available-for-sale without calling into
question the intent to hold securities to maturity. SFAS 115 Q&A Guide required
that any one-time reclassification occur between November 15, 1995 and December
31, 1995. In November 1995, the Bank reclassified $10.5 million of municipal
securities and $20.0 million of U.S. Treasury notes from held-to-maturity to
available-for-sale. Subsequently, the Bank sold $10.4 million of municipal
securities and recognized a gain of approximately $844,000 on the sale during
the nine months ended June 30, 1996.
Other Expenses
Other expenses increased by $2.0 million to $8.9 million for the quarter ended
June 30, 1997 as compared to $6.9 million for the quarter ended June 30, 1996.
For the nine months ended June 30, 1997, other expenses increased by $5.5
million to $25.4 million as compared to $19.9 million for the nine months ended
June 30, 1996. Employee compensation and benefits increased by $1.1 million to
$4.7 million for the quarter ended June 30, 1997, from $3.6 million for the
quarter ended June 30, 1996. For the nine months ended June 30, 1997, employee
compensation and benefits was $13.5 million, as compared to $11.3 million for
the nine months ended June 30, 1996, an increase of $2.2 million. These
increases were primarily caused by personnel costs related to staff increases in
conjunction with the opening of twelve new branches since June 30, 1996, as well
as staff additions in various servicing and support functions. Additional
increases to other expenses resulted from occupancy and equipment which
increased to $1.8 million for the quarter ended June 30, 1997 as compared to
$1.3 million for the same period in the prior year. For the nine months ended
June 30, 1997, occupancy and equipment expenses increased by $1.4 million to
$4.8 million from $3.4 million at June 30, 1996. Miscellaneous expenses
increased $2.0 million to $5.1 million for the nine months ended June 30, 1997
as compared to $3.1 million for the nine months ended June 30, 1996. Of this
increase, approximately $960,000 related to increases in lending related
expenses for mortgage and consumer loans. The remaining increases in
miscellaneous expenses for the nine months ended June 30, 1997 from the
comparable period in the prior year related to a variety of increases in
operating costs which management considered normal for the increase in
operations during the period.
16
<PAGE> 18
PART II - OTHER INFORMATION
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
Item 1 Legal Proceedings
Neither the Company nor its subsidiaries are involved in any pending
legal proceedings, other than routine legal matters occurring in the
ordinary course of business which in the aggregate involve amounts
which in management's opinion are not material to the consolidated
financial condition or results of operations of the Company.
Item 2 Changes in Securities
Not applicable.
Item 3 Default upon Senior Securities
Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5 Other Information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K.
<TABLE>
<CAPTION>
(a) The following exhibits are filed as part of this report:
<S> <C> <C>
10.1 Employment Agreement between First Palm Beach Bancorp, Inc. and Louis O. Davis, Jr.
10.2 Employment Agreement between First Bank of Florida and Louis O. Davis, Jr.
10.3 Employment Agreement between First Palm Beach Bancorp, Inc. and R. Randy Guemple
10.4 Employment Agreement between First Bank of Florida and R. Randy Guemple
10.5 Change of Control Agreement between First Palm Beach Bancorp, Inc. and John Trammel
10.6 Change of Control Agreement between First Bank of Florida and John Trammel
10.7 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Rita Groton
10.8 Change of Control Agreement between First Bank of Florida and Rita Groton
10.9 Change of Control Agreement between First Palm Beach Bancorp, Inc. and John Rudy
10.10 Change of Control Agreement between First Bank of Florida and John Rudy
10.11 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Linda Terrell
10.12 Change of Control Agreement between First Bank of Florida and Linda Terrell
10.13 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Calvin L. Cearley
10.14 Change of Control Agreement between First Bank of Florida and Calvin L. Cearley
10.15 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Alissa Ballot
10.16 Change of Control Agreement between First Bank of Florida and Alissa Ballot
11 Statement Re: Computation of Per Share Earnings.
27 Financial Data Schedule (for SEC use only).
</TABLE>
(b) There were no reports filed on Form 8-K during the quarter ended
June 30, 1997.
17
<PAGE> 19
FIRST PALM BEACH BANCORP, INC. AND SUBSIDIARY
SIGNATURES
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.
First Palm Beach Bancorp, Inc.
(Registrant)
Date:
August 13, 1997 /s/ Louis O. Davis, Jr.
-----------------------
Louis O. Davis, Jr.
President and Chief Executive Officer
(Duly Authorized Officer)
Date:
August 13, 1997 /s/ R. Randy Guemple
--------------------
R. Randy Guemple
Treasurer and Chief Financial Officer
(Principal Financial Officer)
18
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ----------- ----
<S> <C> <C> <C>
10.1 Employment Agreement between First Palm Beach Bancorp, Inc. and Louis O. Davis, Jr............20
10.2 Employment Agreement between First Bank of Florida and Louis O. Davis, Jr.....................32
10.3 Employment Agreement between First Palm Beach Bancorp, Inc. and R. Randy Guemple..............44
10.4 Employment Agreement between First Bank of Florida and R. Randy Guemple.......................56
10.5 Change of Control Agreement between First Palm Beach Bancorp, Inc. and John Trammel...........68
10.6 Change of Control Agreement between First Bank of Florida and John Trammel....................75
10.7 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Rita Groton............83
10.8 Change of Control Agreement between First Bank of Florida and Rita Groton.....................90
10.9 Change of Control Agreement between First Palm Beach Bancorp, Inc. and John Rudy..............98
10.10 Change of Control Agreement between First Bank of Florida and John Rudy......................105
10.11 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Linda Terrell.........113
10.12 Change of Control Agreement between First Bank of Florida and Linda Terrell..................120
10.13 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Calvin L. Cearley.....128
10.14 Change of Control Agreement between First Bank of Florida and Calvin L. Cearley..............136
10.15 Change of Control Agreement between First Palm Beach Bancorp, Inc. and Alissa Ballot.........144
10.16 Change of Control Agreement between First Bank of Florida and Alissa Ballot..................152
11 Statement Re: Computation of Per Share Earnings..............................................160
27 Financial Data Schedule (for SEC use only)...................................................161
</TABLE>
19
<PAGE> 1
EXHIBIT 10.1
FIRST PALM BEACH BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of May 20, 1997 by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a Delaware corporation,
with its principal administrative office at 450 South Australian Avenue, West
Palm Beach, Florida, and Louis O. Davis, Jr., (the "Executive"), residing at 127
Thronton Drive, Palm Beach Gardens, Florida 33418. Any reference to
"Association" herein shall mean the Holding Company's wholly-owned subsidiary,
First Bank of Florida, or any successor thereto.
WHEREAS, Executive currently serves the Holding Company in the capacity
of President and Chief Executive Officer; and
WHEREAS, the Holding Company wishes to assure itself of the continued
availability of the services of Executive for the period provided in this
Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Holding
Company on a full-time basis for said period on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and upon the other terms and conditions hereinafter
provided; the parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
(a) During the period and upon the terms and conditions set forth
herein, Executive agrees to serve as President and Chief Executive Officer of
the Holding Company and the Association. The Executive shall have such power,
authority and responsibility and shall perform such duties as are prescribed by
or under the By-Laws of the Holding Company and as are customarily performed by
persons situated in a similar executive capacity. Failure to reelect Executive
as [President and Chief Executive Officer] without the consent of the Executive
shall constitute a breach of this Agreement.
(b) Executive's principal place of employment shall be at the Holding
Company's executive offices at the address first above written, or at such other
location within a 25-mile radius thereof at which the Holding Company shall
maintain its principal executive offices, or at such other location as the
Holding Company and Executive may mutually agree upon. The Holding Company shall
provide Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Holding Company and necessary or appropriate in connection
with the per formance of his assigned duties under this Agreement. The Holding
Company shall reimburse Executive for his ordinary and necessary business
expenses, including, without limitation, fees for memberships in such clubs and
organizations as Executive and the Holding Company 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 Holding Company of
an itemized account of such expenses in such form as the Holding Company may
reasonably require.
2. TERM
(a) The period of Executive's employment under this Agreement shall be
for an initial term of three (3) years beginning on the date of this Agreement
and ending on the third anniversary date of this Agreement (each an "Anniversary
Date"), plus such extensions, if any, as are provided by the Board of Directors
of the Holding Company ("Board") pursuant to section 2(b).
(b) Except as provided in section 2(c), beginning on the date of this
Agreement, the term of this Agreement shall automatically be extended for one
(1) additional day each day, unless either the Holding Company or Executive
elects not to extend the Agreement further by giving written notice to the other
party, in which case the term of this Agreement shall end on the third (3rd)
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
(3rd) anniversary of the date on which such notice is given; and (ii) in all
other cases, the third (3rd) anniversary of the date as of which the Remaining
Unexpired Employment Period is being determined.
20
<PAGE> 2
Upon termination of Executive's employment with the Holding Company 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 Holding
Company at any time from terminating Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Holding Company and the Executive in
the event of any such termination shall be determined under this Agreement.
(d) During the period of his employment hereunder, except for periods
of absence occasioned by illness, holidays, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Holding Company and participation in community
and civic organizations; provided, however, that, with the approval of the
Board, as evidenced by a resolution of such Board, from time-to-time, Executive
may serve, or continue to serve, on the Boards of Directors of, and hold any
other offices or positions in, companies or organizations, which, in such
Board's judgment, will not present any conflict of interest with the Holding
Company, or materially affect the performance of Executive's duties pursuant to
this Agreement. 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
Holding Company and generally applicable to all similarly situated executives.
Executive may also serve as an officer or director of the Association on such
terms and conditions as the Association and the Holding Company may mutually
agree upon, and such service shall not be deemed to materially interfere with
Executive's performance of his duties hereunder or otherwise to result in a
material breach of this Agreement. If Executive is discharged or suspended, or
is subject to any regulatory restriction or prohibition with respect to
participation in the affairs of the Association, he shall continue to provide
services for the Holding Company in accordance with this Agreement but shall not
directly or indirectly provide services to or participate in the affairs of the
Association in a manner inconsistent with the terms of such discharge or
suspension or any applicable regulatory order.
3. COMPENSATION AND REIMBURSEMENT
(a) In consideration for the services to be rendered by Executive
hereunder, the Association shall pay Executive a salary at an initial annual
rate of $250,000 per year ("Base Salary"), payable in approximately equal
installments in accordance with the Holding Company's customary payroll
practices for senior officers. The Board, or a Committee designated thereby,
shall review Executive's Base Salary at such times as it deems appropriate, but
not less frequently then once every twelve months, and the Board may, in its
discretion, approve an increase in Executive's Base Salary. Any such increase
shall become the "Base Salary" for purposes of this Agreement. In addition to
Base Salary, Executive may receive other cash compensation from the Holding
Company for services hereunder at such times, in such amounts and on such terms
and conditions as the Board may determine from time to time. Base Salary shall
include any amounts of compensation deferred by Executive under a qualified plan
maintained by the Holding Company.
(b) During the term of this Agreement, Executive shall be treated as
an employee of the Holding Company and shall be eligible 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, professional financial planning
services and tax preparation programs and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, ESOP, stock option and appreciation rights plans and
restricted stock plans) as may from time to time be maintained by, or cover
employees of, the Holding Company, in accordance with the terms and conditions
of such employee benefit plans and programs and compensation plans and programs
and consistent with the Holding Company's customary practices.
(c) In addition to the Base Salary provided for by paragraph (a) of
this section 3, the Holding Company shall provide Executive with the perquisites
customarily provided to senior officers and may provide such additional
compensation in such form and such amounts as the Board may from time-to-time
determine.
4. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS
(a) Executive shall be entitled to the severance benefits described
herein in the event that his employment with the Holding Company terminates
during the term of this Agreement under any of the following circumstances:
21
<PAGE> 3
(i) Executive's voluntary resignation from employment with the
Holding Company within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint or
elect or re-elect Executive to the office described in section 1
of this Agreement (or a more senior office of the Holding
Company);
(B) if Executive is a member of the Board as of the date of
this Agreement, the failure of the stockholders of the Holding
Company to elect or re-elect Executive or the failure of the
Board (or the nominating committee thereof) to nominate Executive
for such election or re-election;
(C) the expiration of a thirty (30) day period following the
date on which Executive gives written notice to the Holding
Company of its material failure, whether by amendment of the
Holding Company's Organization Certificate or By-laws, action of
the Board or the Holding Company's stockholders or otherwise, to
vest in Executive the functions, duties, or responsibilities
prescribed in section 1 of this Agreement, unless, during such
thirty (30) day period, the Holding Company fully cures such
failure; or
(D) the expiration of a thirty (30) day period following the
date on which Executive gives written notice to the Holding
Company of its material breach of any term, condition or covenant
contained in this Agreement (including, without limitation any
reduction of Executive's rate of Base Salary in effect from time
to time and any change in the terms and conditions of any
compensation or benefit program in which Executive participates
which, alone 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 Holding
Company fully cures such failure; or
(ii) the termination of Executive's employment with the Holding
Company for any other reason not described in section 7;
then, subject to sections 14 and 15, the Holding Company shall provide
the benefits and pay to Executive the amounts described in section
4(b).
(b) Upon the termination of Executive's employment with the Holding
Company under circumstances described in section 4(a) of this Agreement, the
Holding Company shall pay and provide to Executive (or, in the event of his
death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)) as of the date of the termination of his employment with the
Holding Company, 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 Holding Company'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
4(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for the Remaining Unexpired Employment Period, 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 work ing for the Holding Company during the
Remaining Unexpired Employment Period at the highest annual rate of
compensation achieved during that portion of the term of this Agreement
which is prior to Executive's termination of employment with the
Holding Company, it being understood that Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated
Budget Reconciliation Act ("COBRA") shall occur at the expiration of
this period;
(iv) within five (5) days following his termination of
employment with the Holding Company, a lump sum payment, in an amount
equal to the salary that Executive would have earned if he had
continued working for the Holding
22
<PAGE> 4
Company during the Remaining Unexpired Employment Period at the highest
annual rate of salary achieved during that portion of the term of this
Agreement which is prior to Executive's termination of employment with
the Holding Company. Such lump sum is 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 Holding Company, 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 Holding Company, if he were 100% vested
thereunder and had continued working for the Holding Company
during the Remaining Unexpired Employment Period, 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 year in which termination of employment occurs all
amounts payable under sections 4(b)(i), (iv) and (vi); 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 (as
hereinafter defined) 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"); and
(vi) within five (5) days following his termination of
employment with the Holding Company, the payments that would have been
made to Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Holding Company if he had continued working for the Holding Company
during the Remaining Unexpired Employment Period and had earned in each
calendar year that ends during the Remaining Unexpired Employment
Period a bonus in an amount equal to the highest annual bonus or
incentive award actually paid to him in any calendar year ending during
the three-year period ending on the date of termination of employment.
The Holding Company and Executive hereby stipulate that the damages which may be
incurred by 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 4(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to Executive's efforts, if any, to
mitigate damages. The Holding Company and Executive further agree that the
Holding Company may condition the payments and benefits (if any) due under
sections 4(b)(iii), (iv), (v), and (vi) on the receipt of Executive's
resignation from any and all positions which he holds as an officer, director or
committee member with respect to the Association or Holding Company or any
subsidiary or affiliate of either of them.
5. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL
(a) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then
23
<PAGE> 5
outstanding securities, (B) during any period of not more than two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Holding Company together with any new director (other than a
director whose initial assumption of office is in connection with any actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Holding Company)
whose appointment or election by the Board of Directors of the Holding Company
or nomination for election by the Holding Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended,
cease for any reason to constitute at least a majority thereof, (C) the
stockholders of the Holding Company approve a merger or consolidation of the
Holding Company or the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Holding Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Holding Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Holding Company
(or similar transaction) in which no "person" is or becomes the "beneficial
owner," directly or indirectly, of securities of the Holding Company (not
including in the securities "beneficially owned" by such "person" any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities; or (D) the
stockholders of the Holding Company approve a plan of complete liquidation or
dissolution of the Holding Company or an agreement for the sale or disposition
by the Holding Company of all or substantially all of the Holding Company's
assets, other than a sale or disposition by the Holding Company of all or
substantially all of the Holding Company's assets to an entity which assumes the
obligations set forth in this Agreement, and at least 60% of the combined voting
power in the election of directors of the voting securities of which are owned
by stockholders of the Holding Company in substantially the same proportions as
their ownership of the Holding Company immediately prior to such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 5(a) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(b) Subject to sections 14 and 15, Executive shall be entitled to the
payments and benefits contemplated by section 5(c) in the event of his
termination of employment with the Holding Company following a Change of Control
under any of the circumstances described in section 4(a) of this Agreement or
under any of the following circumstances:
(i) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following his demotion, loss of title, office or significant authority
or responsibility, or following any material reduction in any element
of his compensation and benefits;
(ii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following (A) any relocation of his principal place of employment
outside of a 25-mile radius of the principal place of employment
immediately prior to the Change of Control that would require a
relocation of his residence in order to be able to commute to such new
place of employment within a commuting time not in excess of the
greater of 60 minutes or Executive's commuting time prior to the Change
of Control or (B) any material adverse change in working conditions at
such principal place of employment; or
(iii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement following the failure of any
successor to the Holding Company in the Change of Control to include
Executive in any compensation or benefit program maintained by it or
covering any of its executive officers, unless Executive is already
covered by a substantially similar plan of the Holding Company which is
at least as favorable to him.
(c) Upon the termination of Executive's employment with the Holding
Company following a Change of Control under circumstances described in section
4(a) or section 5(b) of this Agreement, the Holding Company shall pay and
provide to Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)) as of the date of the termination of his employment with the
Holding Company, 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;
24
<PAGE> 6
(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 Holding Company'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
5(c)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for a period of thirty-six (36) months after termination of
Executive's employment (the "Payment Period"), 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 Holding Company during the Payment Period at
the highest annual rate of compensation achieved during that portion of
the term of this Agreement which is prior to Executive's termination of
employment with the Holding Company, it being understood that
Executive's "qualifying event" for purposes of continuation coverage
under COBRA shall occur at the expiration of this period;
(iv) within five (5) days following his termination of employment
with the Holding Company, a lump sum payment, in an amount equal to
the salary that Executive would have earned if he had continued
working for the Holding Company during the Payment Period at the
highest annual rate of salary achieved during that portion of the term
of this Agreement which is prior to Executive's termination of
employment with the Holding Company. Such lump sum is 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 Holding Company, 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 Holding Company, if he were 100% vested
thereunder and had continued working for the Holding Company
during the Payment Period, 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 Payment Period and by adding to the compensation
recognized under such plans for the year in which termination of
employment occurs all amounts payable under sections 5(c)(i),
(iv) and (vi); 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");
and
(vi) within five (5) days following termination of Executive's
employment with the Holding Company, the payments that would have been
made to Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Holding Company if he had continued working for the Holding Company
during the Payment Period and had earned in each calendar year that
ends during the Payment Period a bonus in an amount equal to the
highest annual bonus or incentive award actually paid to him in any
calendar year ending during the three-year period ending on the date of
termination of employment.
The Holding Company and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termination of employment following a
Change of Control are not capable of accurate measurement as of the date first
above written and that the payments and benefits contemplated by this section 5
(c) constitute reasonable damages under the circumstances and shall be payable
without any requirement of proof of actual damage and without regard to
Executive's efforts, if any, to mitigate damages. The Holding Company and
Executive further agree that the Holding Company may condition the payments and
benefits (if any) due under sections 5(c)(iii), (iv), (v), and (vi) on the
receipt of Executive's resignation from any and all positions which he holds as
an officer, director or committee member with respect to the Holding Company or
Association or any subsidiary or affiliate of either of them.
25
<PAGE> 7
6. TERMINATION UPON RETIREMENT
Termination of Executive based on "Retirement" shall mean termination
in accordance with the Holding Company's retirement policy or in accordance with
any retirement arrangement established with Executive's consent with respect to
him. Upon termination of Executive upon Retirement, Executive shall be entitled
to all benefits under any retirement plan of the Holding Company and other plans
to which Executive is a party and this Agreement shall be terminated.
7. TERMINATION WITHOUT ADDITIONAL HOLDING COMPANY LIABILITY
In the event that Executive's employment with the Holding Company shall
terminate during the term hereof on account of:
(a) the discharge of Executive for "cause," which, for purposes of
this Agreement shall mean willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order, or any material breach of this
Agreement, in each case as measured against standards generally prevailing at
the relevant time in the savings and community banking industry; PROVIDED,
HOWEVER, that Executive shall not be deemed to have been discharged for cause
unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(b) Executive's voluntary resignation from employment with the Holding
Company for reasons other than those specified in section 4(a)(i) or section
5(b);
(c) Executive's death; or
(d) a determination that Executive is eligible for long-term
disability benefits under the Holding Company's long-term disability insurance
program or, if there is no such program, under the federal Social Security Act;
then the Holding Company 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 salary 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
Holding Company.
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(e) For purposes of section 7(a), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Holding Company.
8. NOTICE
(a) Any purported termination by the Holding Company or by Executive
shall be communicated by Notice of Termination to the other party hereto. Except
in a termination for cause, such Notice of Termination shall be provided to
Executive not less than thirty (30) days prior to Executive's Date of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated written notice which shall (i) indicate the specific termination
provision in this Agreement relied upon; (ii) set forth in detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated; and (iii) specify a Date of
Termination, which shall be not less than thirty (30) days nor more than ninety
(90) days after such Notice of Termination is given, except in the case of a
termination for cause, in which case the Notice of Termination may specify a
Date of Termination as of the date of such Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
9. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice and at the Holding
Company's expense, furnish such information and assistance to the Holding
Company as may reasonably be required by the Holding Company in connection with
any litigation in which it or any of its subsidiaries or affiliates is, or may
become, a party.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Association and/or
the Holding Company for a period of one (1) year following such termination in
any city, town or county in which the Association and/or the Holding Company has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Association and/or the Holding
Company. The parties hereto, recognizing that irreparable injury will result to
the Association and/or the Holding Company, its business and property in the
event of Executive's breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Association and/or the Holding Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to Section 4 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Association and/or the
Holding Company, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Association and/or the Holding Company from
pursuing any other remedies available to the Association and/or the Holding
Company for such breach or threatened breach, including the recovery of damages
from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
affiliates thereof, as it may exist from time-to-time, is a valuable, special
and unique asset of the business of the Holding Company. Executive will not,
during or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Holding Company or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Holding Company. In the event of a breach or
threatened breach by Executive of the provisions of this section 10, the Holding
Company will be entitled to an injunction restraining Executive from disclosing,
in whole or in part, the knowledge of the past, present, planned or considered
business activities of the Holding Company or affiliates thereof,
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or from rendering any services to any person, firm, corporation, other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be disclosed. Nothing herein will be construed as prohibiting the Holding
Company from pursuing any other remedies available to the Holding Company for
such breach or threatened breach, including the recovery of damages from
Executive.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between the Holding
Company or any predecessor of the Holding Company and Executive (including
without limitation that certain Employment Agreement between the Holding Company
and Executive (dated , 1993), except that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to the Executive of a kind
elsewhere provided. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to
him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Holding Company or by Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Holding Company's qualified or non-qualified retirement, pension, savings, ESOP,
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 Holding Company from time to time.
12. 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 affected any such action shall be null,
void, and of no effect.
13. MODIFICATION AND WAIVER
(a) Except for increases in the Base Salary as provided for in section
3(a), this Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act other
than that specifically waived.
14. LIMITATION PROVISIONS
(a) Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by Executive in
connection with a Change of Control of the Holding Company or the termination of
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Holding Company or the
Association, any person whose actions result in a Change of Control of the
Holding Company or any person affiliated with the Holding Company or the
Association or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the "Severance Payments"),
being hereinafter called "Total Payments") would not be deductible (in whole or
part), by the Holding Company, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), then, to the extent necessary to make such
portion of the Total Payments deductible (and after taking into account any
reduction in the Total Payments provided in such other plan, arrangement or
agreement), the cash Severance Payments shall first be reduced (if necessary, to
zero), and all other Severance Payments shall thereafter be reduced (if
necessary, to zero); PROVIDED, HOWEVER, that Executive may elect (at any time
prior to the delivery of a Notice of Termination hereunder) to have the noncash
Severance Payments reduced (or eliminated) prior to any reduction of the cash
Severance Payments.
(b) For purposes of the limitation contained in Subsection (a) of this
section 14, (i) no portion of the Total Payments the receipt or enjoyment of
which Executive shall have effectively waived in writing prior to the delivery
of a Notice of Termination
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shall be taken into account, (ii) no portion of the Total Payments shall be
taken into account which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the accounting firm which
was, immediately prior to the Change of Control of the Holding Company, the
Holding Company's independent auditor (the "Auditor"), does not constitute a
"parachute payment" within the meaning of Section 280G(b) (2) of the Code,
including by reason of Section 280G(b) (4) (A) of the Code, (iii) the Severance
Payments shall be reduced only to the extent necessary so that the Total
Payments (other than those referred to in clauses (i) or (ii)), in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b) (4) (B) of the Code or are otherwise not
subject to disallowance as deductions by reason of Section 280G of the Code, in
the opinion of Tax Counsel, and (iv) the value of any noncash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(c) If it is established pursuant to a final determination of a court
or an Internal Revenue Service proceeding that, notwithstanding the good faith
of Executive and the Holding Company in applying the terms of this Section 14,
the aggregate "parachute payments" paid to or for Executive's benefit are in an
amount that would result in any portion of such "parachute payments" not being
deductible by reason of Section 280G of the Code, then Executive shall have an
obligation to pay the Holding Company upon demand an amount equal to the sum of
(i) the excess of the aggregate "parachute payments" paid to or for Executive's
benefit over the aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of Section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at 120% of the rate provided in
Section 1274 (b) (2) (B) of the Code from the date of Executive's receipt of
such excess until the date of such payment. If the Severance Payments shall be
decreased pursuant to section 14(a) hereof, and the benefits under section
5(c)(iii) hereof which remain payable after the application of section 14 hereof
are thereafter reduced pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Holding Company shall, at the time of such
reduction, pay to Executive the lowest of (a) the amount of the decrease made in
the Severance Payments pursuant to section 14 hereof, (b) the amount of the
subsequent reduction in such benefits, or (c) the maximum amount which can be
paid to Executive without being, or causing any other payment to be,
nondeductible by reason of Section 280G of the Code.
15. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein to the contrary, any payments made to
Executive by the Holding Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
If and to the extent that the foregoing provision shall cease to be
required by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
16. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. HEADING FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), but only to the extent not
preempted by federal law.
19. INDEMNIFICATION FOR ATTORNEYS' FEES
The Holding Company shall indemnify, hold harmless and defend 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; provided, however, that prior to a Change of Control of
the Holding Company, Executive shall have substantially prevailed on the merits
pursuant to a judgment, decree or order of a court of competent jurisdiction or
of an arbitrator in an arbitration proceeding, or in a settlement. For purposes
of this Agreement, any
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settlement agreement which provides for payment of any amounts in settlement of
the Holding Company's obligations hereunder shall be conclusive evidence of
Executive's entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
Following a Change in Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of his employment, in seeking to enforce
any of his rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this paragraph shall be in addition
to all rights to which Executive is otherwise entitled under this Agreement.
20. INDEMNIFICATION AND INSURANCE
(a) During the term of this Agreement and for a period of six (6)
years thereafter, the Holding Company shall cause 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 Holding
Company or service in other capacities at the request of the Holding Company.
The coverage provided to Executive pursuant to this section 20 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 Holding Company.
(b) To the maximum extent permitted under applicable law, during the
term of this Agreement and for a period of six (6) years thereafter, the Holding
Company shall indemnify, and shall cause its subsidiaries and affiliates to
indemnify 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 Association or any subsidiary or affiliate thereof.
21. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Holding Company and its successors and assigns, including any successor by
merger or consolidation or any other person or firm or corporation to which all
or substantially all of the assets and business of the Holding Company may be
sold or otherwise transferred. Failure of the Holding Company to obtain from any
successor its express written assumption of the Holding Company's obligations
hereunder at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by Executive to the Holding
Company.
22. GUARANTEE
The Holding Company hereby agrees to guarantee the payment by the
Association of any benefits and compensation to which Executive is or may be
entitled to under the terms and conditions of the Employment Agreement dated as
of May 20, 1997 between the Association and Executive, a copy of which is
attached hereto as Exhibit A.
23. NON-DUPLICATION
In the event that Executive shall perform services for the Association
or any other direct or indirect subsidiary of the Holding Company, any
compensation or benefits provided to Executive by such other employer shall be
applied to offset the obligations of the Holding Company hereunder, it being
intended that this Agreement set forth the aggregate compensation and benefits
payable to Executive for all services to the Holding Company and all of its
direct or indirect subsidiaries.
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SIGNATURES
IN WITNESS WHEREOF, First Bank of Florida and First Palm Beach Bancorp, Inc.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, all as of the day and year first above
written.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ R. Randy Guemple
- ------------------------------ -----------------------
Secretary Duly Authorized Officer
SEAL
ATTEST: FIRST PALM BEACH BANCORP, INC.
(Guarantor)
/s/ Elaine P. Gerboc By: /s/ R. Randy Guemple
- ------------------------------ ---------------------------
SEAL
WITNESS:
/s/ Carol A. Patton By: /s/ Louis O. Davis, Jr.
- ------------------------------ ---------------------------
Executive
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EXHIBIT 10.2
FIRST BANK OF FLORIDA
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of May 20, 1997 by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its principal administrative office at 450 South Australian
Avenue, West Palm Beach, Florida, and Louis O. Davis, Jr., (the "Executive"),
residing at 127 Thornton Drive, Palm Beach Gardens, Florida 33418. Any reference
to "Holding Company" herein shall mean the Association's parent, First Palm
Beach Bancorp, Inc., or any successor thereto.
WHEREAS, Executive currently serves the Association in the capacity of
President and Chief Executive Officer; and
WHEREAS, the Association wishes to assure itself of the continued
availability of the services of Executive for the period provided in this
Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the
Association on a full-time basis for said period on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and upon the other terms and conditions hereinafter
provided; the parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
(a) During the period and upon the terms and conditions set forth
herein, Executive agrees to serve as President and Chief Executive Officer of
the Association. The Executive shall have such power, authority and
responsibility and shall perform such duties as are prescribed by or under the
By-Laws of the Association and as are customarily performed by persons situated
in a similar executive capacity, including, without limitation, the general
direction of all the business and affairs of the Association, the hiring and
supervision of all senior management personnel, and long-term strategic planning
for the Association, including growth by merger and acquisition. Failure to
reelect Executive as President and Chief Executive Officer without the consent
of the Executive shall constitute a breach of this Agreement by the Association.
(b) Executive's principal place of employment shall be at the
Association's executive offices at the address first above written, or at such
other location within a 25-mile radius thereof at which the Association shall
maintain its principal executive offices, or at such other location as the
Association and Executive may mutually agree upon. The Association shall provide
Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Association and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement. The Association
shall reimburse Executive for his ordinary and necessary business expenses,
including, without lim itation, fees for memberships in such clubs and
organizations as Executive and the Association 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 Association of an
itemized account of such expenses in such form as the Association may reasonably
require.
2. TERM
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter. Prior to the
first anniversary date of this Agreement, and on each anniversary date
thereafter (each an "Anniversary Date"), the Board of Directors of the
Association ("Board") shall review the terms of this Agreement and Executive's
performance of services hereunder and may, in the absence of objection from
Executive, approve an extension of the Employment Agreement. In such event, the
Employment Agreement shall be extended to the third anniversary of the relevant
Anniversary Date.
(b) 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 the Anniversary Date on which the term of this Agreement (as
extended pursuant to section 2(a) of this Agreement) is then scheduled to
expire.
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(c) Nothing in this Agreement shall be deemed to prohibit the
Association at any time from terminating Executive's employment during the term
of this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Association and Executive in the
event of any such termination shall be determined under this Agreement.
(d) During the period of his employment hereunder, except for periods
of absence occasioned by illness, holidays, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Association and participation in community and
civic organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time-to-time, Executive may serve,
or continue to serve, on the Boards of Directors of, and hold any other offices
or positions in, companies or organizations, which, in such Board's judgment,
will not present any conflict of interest with the Association, or materially
affect the performance of Executive's duties pursuant to this Agreement.
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
Association and generally applicable to all similarly situated executives.
Executive may also serve as an officer or director of the Holding Company on
such terms and conditions as the Association and the Holding Company may
mutually agree upon, and such service shall not be deemed to materially
interfere with Executive's performance of his duties hereunder or otherwise to
result in a material breach of this Agreement.
3. COMPENSATION AND REIMBURSEMENT
(a) In consideration for the services to be rendered by Executive
hereunder, the Association shall pay Executive a salary at an initial annual
rate of $250,000 per year ("Base Salary"), payable in approximately equal
installments in accordance with the Association's customary payroll practices
for senior officers. The Board, or a Committee designated thereby, shall review
Executive's Base Salary at such times as it deems appropriate, but not less
frequently then once every twelve months, and the Board may, in its discretion,
approve an increase in Executive's Base Salary. Any such increase shall become
the "Base Salary" for purposes of this Agreement. In addition to Base Salary,
Executive may receive other cash compensation from the Association for services
hereunder at such times, in such amounts and on such terms and conditions as the
Board may determine from time to time. Base Salary shall include any amounts of
compensation deferred by Executive under a qualified plan maintained by the
Association.
(b) During the term of this Agreement, Executive shall be treated as
an employee of the Association and shall be eligible 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, professional financial planning
services and tax preparation programs and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, ESOP, stock option and appreciation rights plans and
restricted stock plans) as may from time to time be maintained by, or cover
employees of, the Association, in accordance with the terms and conditions of
such employee benefit plans and programs and compensation plans and programs and
consistent with the Association's customary practices.
(c) In addition to the Base Salary provided for by paragraph (a) of
this section 3, the Association shall provide Executive with the perquisites
customarily provided to senior officers and may provide such additional
compensation in such form and such amounts as the Board may from time-to-time
determine.
4. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS
(a) Executive shall be entitled to the severance benefits described
herein in the event that his employment with the Association terminates during
the term of this Agreement under any of the following circumstances:
(i) Executive's voluntary resignation from employment with the
Association within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint or
elect or re-elect Executive to the office described in section 1
of this Agreement (or a more senior office of the Association);
(B) if Executive is a member of the Board as of the date of
this Agreement, the failure of the stockholders of the
Association to elect or re-elect Executive or the failure of the
Board (or the nominating committee thereof) to nominate Executive
for such election or re-election;
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(C) the expiration of a thirty (30) day period following
the date on which Executive gives written notice to the
Association of its material failure, whether by amendment of the
Association's Organization Certificate or By-laws, action of the
Board or the Association's stockholders or otherwise, to vest in
Executive the functions, duties, or responsibilities prescribed
in section 1 of this Agreement, unless, during such thirty (30)
day period, the Association fully cures such failure; or
(D) the expiration of a thirty (30) day period following
the date on which Executive gives written notice to the
Association of its material breach of any term, condition or
covenant contained in this Agreement (including, without
limitation any reduction of Executive's rate of Base Salary in
effect from time to time and any change in the terms and
conditions of any compensation or benefit program in which
Executive participates which, alone 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 Association fully cures such failure; or
(ii) the termination of Executive's employment with the
Association for any other reason not described in section 7; then,
subject to sections 15 and 16, the Association shall provide the
benefits and pay to Executive the amounts described in section 4(b).
(b) Upon the termination of Executive's employment with the
Association under circumstances described in section 4(a) of this Agreement, the
Association shall pay and provide to Executive (or, in the event of his death,
to his estate):
(i) his earned but unpaid compensation (including, without
imitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)), as of the date of the termination of his employment with the
Association, 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
Association'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
4(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for the Remaining Unexpired Employment Period, 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 work ing for the Association during the Remaining
Unexpired Employment Period at the highest annual rate of compensation
achieved during that portion of the term of this Agreement which is
prior to Executive's termination of employment with the Association,
it being understood that Executive's "qualifying event" for purposes
of continuation coverage under the Consolidated Budget Reconciliation
Act ("COBRA") shall occur at the expiration of this period;
(iv) within five (5) days following his termination of employment
with the Association, a lump sum payment, in an amount equal to the
salary that Executive would have earned if he had continued working
for the Association during the Remaining Unexpired Employment Period
at the highest annual rate of salary achieved during that portion of
the term of this Agreement which is prior to Executive's termination
of employment with the Association. Such lump sum is 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 Association, 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 Association, if he were 100% vested thereunder
and had continued working for the Association during the Re
maining Unexpired Employment Period, 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
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the year in which termination of employment occurs all amounts
payable under sections 4(b)(i), (iv) and (vi); 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 (as hereinafter defined) 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"); and
(vi) within five (5) days following his termination of employment
with the Association, the payments that would have been made to
Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Association if he had continued working for the Association during
the Re maining Unexpired Employment Period and had earned in each
calendar year that ends during the Remaining Unexpired Employment
Period a bonus in an amount equal to the highest annual bonus or
incentive award actually paid to him in any calendar year ending
during the three-year period ending on the date of termination of
employment.
The Association and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termi nation 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 4(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to Executive's efforts, if any, to
mitigate damages. The Association and Executive further agree that the
Association may condition the payments and benefits (if any) due under sections
4(b)(iii), (iv), (v), and (vi) on the receipt of Executive's resignation from
any and all positions which he holds as an officer, director or committee member
with respect to the Holding Company or the Association or any subsidiary or
affiliate of either of them.
5. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL
(a) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association's outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement
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<PAGE> 5
for the sale or disposition by the Association of all or substantially all of
the Association's assets, other than a sale or disposition by the Association of
all or substantially all of the Association's assets to an entity which assumes
the obligations set forth in this Agreement, and at least 60% of the combined
voting power in the election of directors of the voting securities of which are
owned by stockholders of the Association in substantially the same proportions
as their ownership of the Association any immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 5(a) if the term "Holding Company" were substituted for the term
"Association"each time it appears herein.
(b) Subject to sections 15 and 16, Executive shall be entitled to the
payments and benefits contemplated by section 5(c) in the event of his
termination of employment with the Association following a Change of Control
under any of the circumstances described in section 4(a) of this Agreement or
under any of the following circumstances:
(i) resignation, voluntary or otherwise, by Executive at any time
during the term of this Agreement and within ninety (90) days
following his demotion, loss of title, office or significant authority
or responsibility, or following any material reduction in any element
of his compensation and benefits;
(ii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following (A) any relocation of his principal place of employment
outside of a 25-mile radius of the principal place of employment
immediately prior to the Change of Control that would require a
relocation of his residence in order to be able to commute to such new
place of employment within a commuting time not in excess of the
greater of 60 minutes or Executive's commuting time prior to the
Change of Control or (B) any material adverse change in working
conditions at such principal place of employment; or
(iii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement following the failure of any
successor to the Association in the Change of Control to include
Executive in any compensation or benefit program maintained by it or
covering any of its executive officers, unless Executive is already
covered by a substantially similar plan of the Association which is at
least as favorable to him.
(c) Upon the termination of Executive's employment with the
Association following a Change of Control under circumstances described in
section 4(a) or section 5(b) of this Agreement, the Association shall pay and
provide to Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
5(c)), as of the date of the termination of his employment with the
Association, 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
Association'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
5(c)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for a period of thirty-six (36) months following the
termination of Executive's employment (the "Payment Period"), 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 Association during the Payment
Period at the highest annual rate of compensation achieved during that
portion of the term of this Agreement which is prior to Executive's
termination of employment with the Association, it being understood
that Executive's "qualifying event" for purposes of continuation
coverage under COBRA shall occur at the expiration of this period;
(iv) within five (5) days following his termination of employment
with the Association, a lump sum payment, in an amount equal to the
salary that Executive would have earned if he had continued working
for the Association during the Payment Period at the highest annual
rate of salary achieved during that portion of the term of this
Agreement which is prior to Executive's termination of employment with
the Association. Such lump sum is to be paid
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<PAGE> 6
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 Association, 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 Association, if he were 100% vested thereunder
and had continued working for the Association during the Payment
Period, 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
Payment Period and by adding to the compensation recognized under
such plans for the year in which termination of employment occurs
all amounts payable under sections 5(c)(i), (iv) and (vi); 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");
and
(vi) within five (5) days following his termination of employment
with the Association, the payments that would have been made to
Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Association if he had continued working for the Association during
the Payment Period and had earned in each calendar year that ends
during the Payment Period a bonus in an amount equal to the highest
annual bonus or incentive award actually paid to him in any calendar
year ending during the three-year period ending on the date of
termination of employment.
The Association and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termi nation of employment following a
Change of Control are not capable of accurate measurement as of the date first
above written and that the payments and benefits contemplated by this section
5(c) constitute reasonable damages under the circumstances and shall be payable
without any requirement of proof of actual damage and without regard to
Executive's efforts, if any, to mitigate damages. The Association and Executive
further agree that the Association may condition the payments and benefits (if
any) due under sections 5(c)(iii), (iv), (v), and (vi) on the receipt of
Executive's resignation from any and all positions which he holds as an officer,
director or committee member with respect to the Association or the Holding
Company or any subsidiary or affiliate of either of them.
6. TERMINATION UPON RETIREMENT
Termination of Executive based on "Retirement" shall mean termination
in accordance with the Association's retirement policy or in accordance with any
retirement arrangement established with Executive's consent with respect to him.
Upon termination of Executive upon Retirement, Executive shall be entitled to
all benefits under any retirement plan of the Association and other plans to
which Executive is a party and this Agreement shall be terminated.
7. TERMINATION WITHOUT ADDITIONAL ASSOCIATION LIABILITY
In the event that Executive's employment with the Association shall
terminate during the term hereof on account of:
(a) the discharge of Executive for "cause," which, for purposes of
this Agreement shall mean personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease and desist order, or
any material breach of this Agreement, in each case as measured against
standards generally prevailing at the relevant time in the savings and community
banking industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have
been discharged for cause unless and until the following procedures shall have
been followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for
cause and setting forth the purported grounds for such termination
("Proposed Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied
by a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on
his own behalf, or through a representative, who may be his legal
counsel, to refute the grounds set forth in the Proposed Termination
Resolution at one or more meetings of the Board to be held no sooner
than fifteen (15) days and no later than thirty (30) days after the
Executive's receipt of the Proposed Termination Notice ("Termination
Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion
of the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's
employment ("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one (1)
business day after adoption of the Termination Resolution, the Board
shall furnish to the Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(b) Executive's voluntary resignation from employment with the
Association for reasons other than those specified in section 4(a)(i) or section
5(b);
(c) Executive's death; or
(d) a determination that Executive is eligible for long-term
disability benefits under the Association's long-term disability insurance
program or, if there is no such program, under the federal Social Security Act;
then the Association 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 salary 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
Association.
(e) For purposes of section 7(a), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
8. NOTICE
(a) Any purported termination by the Association or by Executive shall
be communicated by Notice of Termination to the other party hereto. Except in a
termination for cause, such Notice of Termination shall be provided to Executive
not less than thirty (30) days prior to Executive's Date of Termination. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated written
notice which shall (i) indicate the specific termination provision in this
Agreement relied upon; (ii) set forth in detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated; and (iii) specify a Date of Termination, which shall be
not less than thirty (30) days nor more than ninety (90) days after such Notice
of Termination is given, except in the case of a Termination for cause, in which
case the Notice of Termination may specify a Date of Termination as of the date
of such Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
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9. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice and at the Association's
expense, furnish such information and assistance to the Association as may
reasonably be required by the Association in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to section 4 hereof, Executive agrees not to compete with the Association and/or
the Holding Company for a period of one (1) year following such termination in
any city, town or county in which the Association and/or the Holding Company has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Association and/or the Holding
Company. The parties hereto, recognizing that irreparable injury will result to
the Association and/or the Holding Company, its business and property in the
event of Executive's breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Association and/or the Holding Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to section 4 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Association and/or the
Holding Company, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Association and/or the Holding Company from
pursuing any other remedies available to the Association and/or the Holding
Company for such breach or threatened breach, including the recovery of damages
from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Association and
affiliates thereof, as it may exist from time-to-time, is a valuable, special
and unique asset of the business of the Association. Executive will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Association or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Association. In the event of a breach or threatened
breach by Executive of the provisions of this section 10, the Association will
be entitled to an injunction restraining Executive from disclosing, in whole or
in part, the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Association from pursuing
any other remedies available to it for such breach or threatened breach,
including the recovery of damages from Executive.
11. SOURCE OF PAYMENTS; GUARANTEE
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Holding Company hereby
irrevocably and unconditionally guarantees to Executive the payment of all
amounts, and the performance of all other obligations, due from the Association
in accordance with this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between the
Association or any predecessor of the Association and Executive (including
without limitation that certain Employment Agreement between the Association and
Executive dated , 1993), except that this Agreement shall not affect or operate
to reduce any benefit or compensation inuring to the Executive of a kind
elsewhere provided. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to
him without reference to this Agreement.
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<PAGE> 9
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
13. 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 affected any such action shall be null,
void, and of no effect.
14. MODIFICATION AND WAIVER
(a) Except for increases in the Base Salary as provided for in section
3(a), this Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act other
than that specifically waived.
15. LIMITATION PROVISIONS
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive under
section 4(b) or section 5(c) hereof (exclusive of amounts described in section
4(b)(i) or (ii) or 5(c)(i)or (ii)), exceed three times Executive's average
annual total compensation for the last five consecutive calendar years to end
prior to his termination of employment with the Association (or for his entire
period of employment with the Association if less than five calendar years).
(b) (A) Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be
received by Executive in connection with a Change of Control of
the Association or the termination of Executive's employment
(whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Holding Company or the
Association, any person whose actions result in a Change of
Control of the Association or any person affiliated with the
Holding Company or the Association or such person) (all such
payments and benefits, including the payments and benefits
provided under this Agreement (the "Severance Payments"), being
hereinafter called "Total Payments") would not be deductible (in
whole or part), by the Association, an affiliate or a person
making such payment or providing such benefit as a result of
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), then, to the extent necessary to make such portion
of the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other plan,
arrangement or agreement), the cash Severance Payments shall
first be reduced (if necessary, to zero), and all other Severance
Payments shall thereafter be reduced (if necessary, to zero);
PROVIDED, HOWEVER, that Executive may elect (at any time prior to
the delivery of a Notice of Termination hereunder) to have the
noncash Severance Payments reduced (or eliminated) prior to any
reduction of the cash Severance Payments.
(B) For purposes of the limitation contained in Subsection
(A) of this section 15(b), (i) no portion of the Total Payments
the receipt or enjoyment of which Executive shall have
effectively waived in writing prior to the delivery of a Notice
of Termination shall be taken into account, (ii) no portion of
the Total Payments shall be taken into account which, in the
opinion of tax counsel ("Tax Counsel") reasonably acceptable to
Executive and selected by the accounting firm which was,
immediately prior to the Change of Control of the Association,
the Association's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section 280G(b)
(4) (A) of the Code, (iii) the Severance Payments shall be
reduced only to the extent necessary so that the Total Payments
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<PAGE> 10
(other than those referred to in clauses (i) or (ii)), in their
entirety constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as deductions
by reason of Section 280G of the Code, in the opinion of Tax
Counsel, and (iv) the value of any noncash benefit or any
deferred payment or benefit included in the Total Payments shall
be determined by the Auditor in accordance with the principles of
Sections 280G(d) (3) and (4) of the Code.
(C) If it is established pursuant to a final determination
of a court or an Internal Revenue Service proceeding that,
notwithstanding the good faith of Executive and the Association
in applying the terms of this section 15(b), the aggregate
"parachute payments" paid to or for Executive's benefit are in an
amount that would result in any portion of such "parachute
payments" not being deductible by reason of Section 280G of the
Code, then Executive shall have an obligation to pay the
Association upon demand an amount equal to the sum of (i) the
excess of the aggregate "parachute payments" paid to or for
Executive's benefit over the aggregate "parachute payments" that
could have been paid to or for Executive's benefit without any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at 120% of the
rate provided in Section 1274 (b) (2) (B) of the Code from the
date of Executive's receipt of such excess until the date of such
payment. If the Severance Payments shall be decreased pursuant to
section 15(b) (A) hereof, and the benefits under section
5(c)(iii) hereof which remain payable after the application of
section 15(b) hereof are thereafter reduced pursuant thereto
because of the receipt by Executive of substantially similar
benefits, the Association shall, at the time of such reduction,
pay to Executive the lowest of (a) the amount of the decrease
made in the Severance Payments pursuant to section 15(b) hereof,
(b) the amount of the subsequent reduction in such benefits, or
(c) the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of Section 280G of the Code.
16. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purpose of complying with
various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, if the
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice served
under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1818 (e)(3) or (g)(1), the Association's prospective obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay the Executive all or part of the
compensation withheld while their contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.
(b) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss.1818 (e)(4) or
(g)(1)), all prospective obligations of the Association under this contract
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(c) Notwithstanding anything herein to the contrary, if the Association
is in default as defined in Section 3(x)(1) (12 U.S.C. 1813 (x)(1)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all prospective obligations of the
Association under this contract shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the parties hereto.
(d) Notwithstanding anything herein to the contrary, all prospective
obligations of the Association under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Association, (I) by the Director of the Office of
Thrift Supervision (or his designee), or the Federal Deposit Insurance
Corporation, at the time FDIC enters into an agreement to provide assistance to
or on behalf of the Association under the authority contained in Section 13(c)
(12 U.S.C. ss.1823 (c)) of the Federal Deposit Insurance Act; or (ii) by the
Director of the Office of Thrift Supervision ("OTS") (or his designee) at the
time the Director (or his designee) approves a supervisory merger to resolve
problems related to the operations of the Association or when the Association is
determined by the Director to be in an unsafe or unsound condition. Any rights
of the parties that have already vested, however, shall not be affected by such
action.
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(e) Notwithstanding anything herein to the contrary, any payments made
to Executive by the Association, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
If and to the extent that any of the foregoing provisions shall cease
to be required by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
17. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADING FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
19. GOVERNING LAW
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Florida without (regard
to the conflict of laws principles thereof), but only to the extent not
preempted by federal law.
20. INDEMNIFICATION FOR ATTORNEYS' FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred 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 ef forts, in good faith, to defend or enforce the
terms of this Agreement; provided, however, that Executive shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the
Association's obligations hereunder shall be conclusive evidence of Executive's
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise. This provision
shall be inoperative if and to the extent that, but only if and to the extent
that, it shall be determined that compliance herewith would violate any
applicable law or regulation.
21. INDEMNIFICATION AND INSURANCE
(a) During the term of this Agreement and for a period of six (6) years
thereafter, the Association shall cause 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 Association or service
in other capacities at the request of the Association. The coverage provided to
Executive pursuant to this section 21 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 Association.
(b) To the maximum extent permitted under applicable law, during the
term of this Agreement and for a period of six (6) years thereafter, the
Association shall indemnify, and shall cause its subsidiaries and affiliates to
indemnify 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 Association or any subsidiary or affiliate thereof.
This section 21(b) shall not be applicable where section 20 is applicable.
22. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Association and its successors and assigns, including any successor by
merger or consolidation or any other per son or firm or corporation to which all
or substantially all of the assets and business of the Association may be sold
or otherwise transferred. Failure of the Association to obtain from any
successor its express written assumption of the Association's obligations
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hereunder at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by Executive to the Association.
SIGNATURES
IN WITNESS WHEREOF, First Bank of Florida and First Palm Beach Bancorp, Inc.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, as of the day and year first above written.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ R. Randy Guemple
- ------------------------------ -----------------------
Secretary Duly Authorized Officer
SEAL
ATTEST: FIRST PALM BEACH BANCORP, INC.
(Guarantor)
/s/ Elaine P. Gerboc By: /s/ R. Randy Guemple
- ------------------------------ ---------------------------
SEAL
WITNESS:
/s/ Carol A. Patton By: /s/ Louis O. Davis, Jr.
- ------------------------------ ---------------------------
Executive
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EXHIBIT 10.3
FIRST PALM BEACH BANCORP, INC.
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of May 20, 1997 by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a Delaware corporation,
with its principal administrative office at 450 South Australian Avenue, West
Palm Beach, Florida, and R. Randy Guemple (the "Executive"), residing at 1559
Grantham Drive, West Palm Beach, Florida 33414. Any reference to "Association"
herein shall mean the Holding Company's wholly-owned subsidiary, First Bank of
Florida, or any successor thereto.
WHEREAS, Executive currently serves the Holding Company in the capacity
of Executive Vice President and Chief Operating Officer; and
WHEREAS, the Holding Company wishes to assure itself of the continued
availability of the services of Executive for the period provided in this
Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Holding
Company on a full-time basis for said period on the terms and conditions
hereinafter set forth..
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and upon the other terms and conditions hereinafter
provided; the parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
(a) During the period and upon the terms and conditions set forth
herein, Executive agrees to serve as Executive Vice President and Chief
Operating Officer of the Holding Company and the Association. The Executive
shall have such power, authority and responsibility and shall perform such
duties as are prescribed by or under the By-Laws of the Holding Company and as
are customarily performed by persons situated in a similar executive capacity.
Failure to reelect Executive as [President and Chief Executive Officer] without
the consent of the Executive shall constitute a breach of this Agreement.
(b) Executive's principal place of employment shall be at the Holding
Company's executive offices at the address first above written, or at such other
location within a 25-mile radius thereof at which the Holding Company shall
maintain its principal executive offices, or at such other location as the
Holding Company and Executive may mutually agree upon. The Holding Company shall
provide Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Holding Company and necessary or appropriate in connection
with the per formance of his assigned duties under this Agreement. The Holding
Company shall reimburse Executive for his ordinary and necessary business
expenses, including, without limitation, fees for memberships in such clubs and
organizations as Executive and the Holding Company 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 Holding Company of
an itemized account of such expenses in such form as the Holding Company may
reasonably require.
2. TERM
(a) The period of Executive's employment under this Agreement shall be
for an initial term of three (3) years beginning on the date of this Agreement
and ending on the third anniversary date of this Agreement (each an "Anniversary
Date"), plus such extensions, if any, as are provided by the Board of Directors
of the Holding Company ("Board") pursuant to section 2(b).
(b) Except as provided in section 2(c), beginning on the date of this
Agreement, the term of this Agreement shall automatically be extended for one
(1) additional day each day, unless either the Holding Company or Executive
elects not to extend the Agreement further by giving written notice to the other
party, in which case the term of this Agreement shall end on the third (3rd)
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
(3rd) anniversary of the date on which such notice is given; and (ii) in all
other cases, the third (3rd) anniversary of the date as of which the Remaining
Unexpired Employment Period is being determined.
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Upon termination of Executive's employment with the Holding Company 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 Holding
Company at any time from terminating Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Holding Company and the Executive in
the event of any such termination shall be determined under this Agreement.
(d) During the period of his employment hereunder, except for periods
of absence occasioned by illness, holidays, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Holding Company and participation in community
and civic organizations; provided, however, that, with the approval of the
Board, as evidenced by a resolution of such Board, from time-to-time, Executive
may serve, or continue to serve, on the Boards of Directors of, and hold any
other offices or positions in, companies or organizations, which, in such
Board's judgment, will not present any conflict of interest with the Holding
Company, or materially affect the performance of Executive's duties pursuant to
this Agreement. 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
Holding Company and generally applicable to all similarly situated executives.
Executive may also serve as an officer or director of the Association on such
terms and conditions as the Association and the Holding Company may mutually
agree upon, and such service shall not be deemed to materially interfere with
Executive's performance of his duties hereunder or otherwise to result in a
material breach of this Agreement. If Executive is discharged or suspended, or
is subject to any regulatory restriction or prohibition with respect to
participation in the affairs of the Association, he shall continue to provide
services for the Holding Company in accordance with this Agreement but shall not
directly or indirectly provide services to or participate in the affairs of the
Association in a manner inconsistent with the terms of such discharge or
suspension or any applicable regulatory order.
3. COMPENSATION AND REIMBURSEMENT
(a) In consideration for the services to be rendered by Executive
hereunder, the Association shall pay Executive a salary at an initial annual
rate of $160,000 per year ("Base Salary"), payable in approximately equal
installments in accordance with the Holding Company's customary payroll
practices for senior officers. The Board, or a Committee designated thereby,
shall review Executive's Base Salary at such times as it deems appropriate, but
not less frequently then once every twelve months, and the Board may, in its
discretion, approve an increase in Executive's Base Salary. Any such increase
shall become the "Base Salary" for purposes of this Agreement. In addition to
Base Salary, Executive may receive other cash compensation from the Holding
Company for services hereunder at such times, in such amounts and on such terms
and conditions as the Board may determine from time to time. Base Salary shall
include any amounts of compensation deferred by Executive under a qualified plan
maintained by the Holding Company.
(b) During the term of this Agreement, Executive shall be treated as an
employee of the Holding Company and shall be eligible 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, professional financial planning
services and tax preparation programs and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, ESOP, stock option and appreciation rights plans and
restricted stock plans) as may from time to time be maintained by, or cover
employees of, the Holding Company, in accordance with the terms and conditions
of such employee benefit plans and programs and compensation plans and programs
and consistent with the Holding Company's customary practices.
(c) In addition to the Base Salary provided for by paragraph (a) of
this section 3, the Holding Company shall provide Executive with the perquisites
customarily provided to senior officers and may provide such additional
compensation in such form and such amounts as the Board may from time-to-time
determine.
4. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS
(a) Executive shall be entitled to the severance benefits described
herein in the event that his employment with the Holding Company terminates
during the term of this Agreement under any of the following circumstances:
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(i) Executive's voluntary resignation from employment with the
Holding Company within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint or
elect or re-elect Executive to the office described in section 1
of this Agreement (or a more senior office of the Holding
Company);
(B) if Executive is a member of the Board as of the date
of this Agreement, the failure of the stockholders of the Holding
Company to elect or re-elect Executive or the failure of the
Board (or the nominating committee thereof) to nominate Executive
for such election or re-election;
(C) the expiration of a thirty (30) day period following
the date on which Executive gives written notice to the Holding
Company of its material failure, whether by amendment of the
Holding Company's Organization Certificate or By-laws, action of
the Board or the Holding Company's stockholders or otherwise, to
vest in Executive the functions, duties, or responsibilities
prescribed in section 1 of this Agreement, unless, during such
thirty (30) day period, the Holding Company fully cures such
failure; or
(D) the expiration of a thirty (30) day period following
the date on which Executive gives written notice to the Holding
Company of its material breach of any term, condition or covenant
contained in this Agreement (including, without limitation any
reduction of Executive's rate of Base Salary in effect from time
to time and any change in the terms and conditions of any
compensation or benefit program in which Executive participates
which, alone 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 Holding
Company fully cures such failure; or
(ii) the termination of Executive's employment with the Holding
Company for any other reason not described in section 7;
then, subject to sections 14 and 15, the Holding Company shall provide the
benefits and pay to Executive the amounts described in section 4(b).
(b) Upon the termination of Executive's employment with the Holding
Company under circumstances described in section 4(a) of this Agreement, the
Holding Company shall pay and provide to Executive (or, in the event of his
death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)) as of the date of the termination of his employment with the
Holding Company, 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
Holding Company'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
4(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for the Remaining Unexpired Employment Period, 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 work ing for the Holding Company during the
Remaining Unexpired Employment Period at the highest annual rate of
compensation achieved during that portion of the term of this
Agreement which is prior to Executive's termination of employment with
the Holding Company, it being understood that Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated
Budget Reconciliation Act ("COBRA") shall occur at the expiration of
this period;
(iv) within five (5) days following his termination of employment
with the Holding Company, a lump sum payment, in an amount equal to
the salary that Executive would have earned if he had continued
working for the Holding
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Company during the Remaining Unexpired Employment Period at the highest
annual rate of salary achieved during that portion of the term of this
Agreement which is prior to Executive's termination of employment with
the Holding Company. Such lump sum is 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 Holding Company, 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 Holding Company, if he were 100%
vested thereunder and had continued working for the Holding
Company during the Remaining Unexpired Employment Period, 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 year in which termination
of employment occurs all amounts payable under sections
4(b)(i), (iv) and (vi); 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 (as
hereinafter defined) 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"); and
(vi) within five (5) days following his termination of employment
with the Holding Company, the payments that would have been made to
Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Holding Company if he had continued working for the Holding
Company during the Remaining Unexpired Employment Period and had
earned in each calendar year that ends during the Remaining Unexpired
Employment Period a bonus in an amount equal to the highest annual
bonus or incentive award actually paid to him in any calendar year
ending during the three-year period ending on the date of termination
of employment.
The Holding Company and Executive hereby stipulate that the damages which may be
incurred by 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 4(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to Executive's efforts, if any, to
mitigate damages. The Holding Company and Executive further agree that the
Holding Company may condition the payments and benefits (if any) due under
sections 4(b)(iii), (iv), (v), and (vi) on the receipt of Executive's
resignation from any and all positions which he holds as an officer, director or
committee member with respect to the Association or Holding Company or any
subsidiary or affiliate of either of them.
5. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL
(a) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then
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outstanding securities, (B) during any period of not more than two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Holding Company together with any new director (other than a
director whose initial assumption of office is in connection with any actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Holding Company)
whose appointment or election by the Board of Directors of the Holding Company
or nomination for election by the Holding Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended,
cease for any reason to constitute at least a majority thereof, (C) the
stockholders of the Holding Company approve a merger or consolidation of the
Holding Company or the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Holding Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Holding Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Holding Company
(or similar transaction) in which no "person" is or becomes the "beneficial
owner," directly or indirectly, of securities of the Holding Company (not
including in the securities "beneficially owned" by such "person" any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities; or (D) the
stockholders of the Holding Company approve a plan of complete liquidation or
dissolution of the Holding Company or an agreement for the sale or disposition
by the Holding Company of all or substantially all of the Holding Company's
assets, other than a sale or disposition by the Holding Company of all or
substantially all of the Holding Company's assets to an entity which assumes the
obligations set forth in this Agreement, and at least 60% of the combined voting
power in the election of directors of the voting securities of which are owned
by stockholders of the Holding Company in substantially the same proportions as
their ownership of the Holding Company immediately prior to such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 5(a) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(b) Subject to sections 14 and 15, Executive shall be entitled to the
payments and benefits contemplated by section 5(c) in the event of his
termination of employment with the Holding Company following a Change of Control
under any of the circumstances described in section 4(a) of this Agreement or
under any of the following circumstances:
(i) resignation, voluntary or otherwise, by Executive at any time
during the term of this Agreement and within ninety (90) days
following his demotion, loss of title, office or significant authority
or responsibility, or following any material reduction in any element
of his compensation and benefits;
(ii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following (A) any relocation of his principal place of employment
outside of a 25-mile radius of the principal place of employment
immediately prior to the Change of Control that would require a
relocation of his residence in order to be able to commute to such new
place of employment within a commuting time not in excess of the
greater of 60 minutes or Executive's commuting time prior to the
Change of Control or (B) any material adverse change in working
conditions at such principal place of employment; or
(iii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement following the failure of any
successor to the Holding Company in the Change of Control to include
Executive in any compensation or benefit program maintained by it or
covering any of its executive officers, unless Executive is already
covered by a substantially similar plan of the Holding Company which
is at least as favorable to him.
(c) Upon the termination of Executive's employment with the Holding
Company following a Change of Control under circumstances described in section
4(a) or section 5(b) of this Agreement, the Holding Company shall pay and
provide to Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)) as of the date of the termination of his employment with the
Holding Company, 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;
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(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
Holding Company'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
5(c)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for a period of thirty-six (36) months after termination of
Executive's employment (the "Payment Period"), 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 Holding Company during the Payment
Period at the highest annual rate of compensation achieved during that
portion of the term of this Agreement which is prior to Executive's
termination of employment with the Holding Company, it being
understood that Executive's "qualifying event" for purposes of
continuation coverage under COBRA shall occur at the expiration of
this period;
(iv) within five (5) days following his termination of employment
with the Holding Company, a lump sum payment, in an amount equal to
the salary that Executive would have earned if he had continued
working for the Holding Company during the Payment Period at the
highest annual rate of salary achieved during that portion of the term
of this Agreement which is prior to Executive's termination of
employment with the Holding Company. Such lump sum is 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 Holding Company, 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 Holding Company, if he were 100%
vested thereunder and had continued working for the Holding
Company during the Payment Period, 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 Payment Period and by adding to
the compensation recognized under such plans for the year in
which termination of employment occurs all amounts payable
under sections 5(c)(i), (iv) and (vi); 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");
and
(vi) within five (5) days following termination of Executive's
employment with the Holding Company, the payments that would have been
made to Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Holding Company if he had continued working for the Holding
Company during the Payment Period and had earned in each calendar year
that ends during the Payment Period a bonus in an amount equal to the
highest annual bonus or incentive award actually paid to him in any
calendar year ending during the three-year period ending on the date
of termination of employment.
The Holding Company and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termination of employment following a
Change of Control are not capable of accurate measurement as of the date first
above written and that the payments and benefits contemplated by this section 5
(c) constitute reasonable damages under the circumstances and shall be payable
without any requirement of proof of actual damage and without regard to
Executive's efforts, if any, to mitigate damages. The Holding Company and
Executive further agree that the Holding Company may condition the payments and
benefits (if any) due under sections 5(c)(iii), (iv), (v), and (vi) on the
receipt of Executive's resignation from any and all positions which he holds as
an officer, director or committee member with respect to the Holding Company or
Association or any subsidiary or affiliate of either of them.
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6. TERMINATION UPON RETIREMENT
Termination of Executive based on "Retirement" shall mean termination
in accordance with the Holding Company's retirement policy or in accordance with
any retirement arrangement established with Executive's consent with respect to
him. Upon termination of Executive upon Retirement, Executive shall be entitled
to all benefits under any retirement plan of the Holding Company and other plans
to which Executive is a party and this Agreement shall be terminated.
7. TERMINATION WITHOUT ADDITIONAL HOLDING COMPANY LIABILITY
In the event that Executive's employment with the Holding Company shall
terminate during the term hereof on account of:
(a) the discharge of Executive for "cause," which, for purposes of this
Agreement shall mean willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order, or any material breach of this
Agreement, in each case as measured against standards generally prevailing at
the relevant time in the savings and community banking industry; PROVIDED,
HOWEVER, that Executive shall not be deemed to have been discharged for cause
unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for
cause and setting forth the purported grounds for such termination
("Proposed Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied
by a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on
his own behalf, or through a representative, who may be his legal
counsel, to refute the grounds set forth in the Proposed Termination
Resolution at one or more meetings of the Board to be held no sooner
than fifteen (15) days and no later than thirty (30) days after the
Executive's receipt of the Proposed Termination Notice ("Termination
Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion
of the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's
employment ("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one (1)
business day after adoption of the Termination Resolution, the Board
shall furnish to the Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given.
(b) Executive's voluntary resignation from employment with the Holding
Company for reasons other than those specified in section 4(a)(i) or section
5(b);
(c) Executive's death; or
(d) a determination that Executive is eligible for long-term disability
benefits under the Holding Company's long-term disability insurance program or,
if there is no such program, under the federal Social Security Act;
then the Holding Company 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 salary as of the date of the termination of his
employment, and the provi sion 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
Holding Company.
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(e) For purposes of section 7(a), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Holding Company.
8. NOTICE
(a) Any purported termination by the Holding Company or by Executive
shall be communicated by Notice of Termination to the other party hereto. Except
in a termination for cause, such Notice of Termination shall be provided to
Executive not less than thirty (30) days prior to Executive's Date of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated written notice which shall (i) indicate the specific termination
provision in this Agreement relied upon; (ii) set forth in detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated; and (iii) specify a Date of
Termination, which shall be not less than thirty (30) days nor more than ninety
(90) days after such Notice of Termination is given, except in the case of a
termination for cause, in which case the Notice of Termination may specify a
Date of Termination as of the date of such Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
9. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice and at the Holding
Company's expense, furnish
such information and assistance to the Holding Company as may reasonably be
required by the Holding Company in connection with any litigation in which it or
any of its subsidiaries or affiliates is, or may become, a party.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to Section 4 hereof, Executive agrees not to compete with the Association and/or
the Holding Company for a period of one (1) year following such termination in
any city, town or county in which the Association and/or the Holding Company has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Association and/or the Holding
Company. The parties hereto, recognizing that irreparable injury will result to
the Association and/or the Holding Company, its business and property in the
event of Executive's breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Association and/or the Holding Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to Section 4 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Association and/or the
Holding Company, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Association and/or the Holding Company from
pursuing any other remedies available to the Association and/or the Holding
Company for such breach or threatened breach, including the recovery of damages
from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Holding Company and
affiliates thereof, as it may exist from time-to-time, is a valuable, special
and unique asset of the business of the Holding Company. Executive will not,
during or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Holding Company or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Holding Company. In the event of a breach or
threatened breach by Executive of the provisions of this section 10, the Holding
Company will be entitled to an injunction restraining Executive from disclosing,
in whole
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or in part, the knowledge of the past, present, planned or considered business
activities of the Holding Company or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Holding Company from
pursuing any other remedies available to the Holding Company for such breach or
threatened breach, including the recovery of damages from Executive.
11. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between the Holding
Company or any predecessor of the Holding Company and Executive (including
without limitation that certain Employment Agreement between the Holding Company
and Executive (dated , 1993), except that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to the Executive of a kind
elsewhere provided. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to
him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Holding Company or by Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Holding Company's qualified or non-qualified retirement, pension, savings, ESOP,
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 Holding Company from time to time.
12. 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 affected any such action shall be null,
void, and of no effect.
13. MODIFICATION AND WAIVER
(a) Except for increases in the Base Salary as provided for in section
3(a), this Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
14. LIMITATION PROVISIONS
(a) Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by Executive in
connection with a Change of Control of the Holding Company or the termination of
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Holding Company or the
Association, any person whose actions result in a Change of Control of the
Holding Company or any person affiliated with the Holding Company or the
Association or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the "Severance Payments"),
being hereinafter called "Total Payments") would not be deductible (in whole or
part), by the Holding Company, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), then, to the extent necessary to make such
portion of the Total Payments deductible (and after taking into account any
reduction in the Total Payments provided in such other plan, arrangement or
agreement), the cash Severance Payments shall first be reduced (if necessary, to
zero), and all other Severance Payments shall thereafter be reduced (if
necessary, to zero); PROVIDED, HOWEVER, that Executive may elect (at any time
prior to the delivery of a Notice of Termination hereunder) to have the noncash
Severance Payments reduced (or eliminated) prior to any reduction of the cash
Severance Payments.
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(b) For purposes of the limitation contained in Subsection (a) of this
section 14, (i) no portion of the Total Payments the receipt or enjoyment of
which Executive shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii) no portion of the
Total Payments shall be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of Control of the
Holding Company, the Holding Company's independent auditor (the "Auditor"), does
not constitute a "parachute payment" within the meaning of Section 280G(b) (2)
of the Code, including by reason of Section 280G(b) (4) (A) of the Code, (iii)
the Severance Payments shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or (ii)), in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b) (4) (B) of the Code or are otherwise not
subject to disallowance as deductions by reason of Section 280G of the Code, in
the opinion of Tax Counsel, and (iv) the value of any noncash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Auditor in accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(c) If it is established pursuant to a final determination of a court
or an Internal Revenue Service proceeding that, notwithstanding the good faith
of Executive and the Holding Company in applying the terms of this Section 14,
the aggregate "parachute payments" paid to or for Executive's benefit are in an
amount that would result in any portion of such "parachute payments" not being
deductible by reason of Section 280G of the Code, then Executive shall have an
obligation to pay the Holding Company upon demand an amount equal to the sum of
(i) the excess of the aggregate "parachute payments" paid to or for Executive's
benefit over the aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute payments" not
being deductible by reason of Section 280G of the Code; and (ii) interest on the
amount set forth in clause (i) of this sentence at 120% of the rate provided in
Section 1274 (b) (2) (B) of the Code from the date of Executive's receipt of
such excess until the date of such payment. If the Severance Payments shall be
decreased pursuant to section 14(a) hereof, and the benefits under section
5(c)(iii) hereof which remain payable after the application of section 14 hereof
are thereafter reduced pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Holding Company shall, at the time of such
reduction, pay to Executive the lowest of (a) the amount of the decrease made in
the Severance Payments pursuant to section 14 hereof, (b) the amount of the
subsequent reduction in such benefits, or (c) the maximum amount which can be
paid to Executive without being, or causing any other payment to be,
nondeductible by reason of Section 280G of the Code.
15. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein to the contrary, any payments made to
Executive by the Holding Company, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
If and to the extent that the foregoing provision shall cease to be
required by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
16. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
17. HEADING FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
18. GOVERNING LAW
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), but only to the extent not
preempted by federal law.
19. INDEMNIFICATION FOR ATTORNEYS' FEES
The Holding Company shall indemnify, hold harmless and defend 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; provided, however, that prior to a Change of Control of
the
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Holding Company, Executive shall have substantially prevailed on the merits
pursuant to a judgment, decree or order of a court of competent jurisdiction or
of an arbitrator in an arbitration proceeding, or in a settlement. For purposes
of this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Holding Company's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise.
Following a Change in Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of his employment, in seeking to enforce
any of his rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this paragraph shall be in addition
to all rights to which Executive is otherwise entitled under this Agreement.
20. INDEMNIFICATION AND INSURANCE
(a) During the term of this Agreement and for a period of six (6) years
thereafter, the Holding Company shall cause 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 Holding Company or
service in other capacities at the request of the Holding Company. The coverage
provided to Executive pursuant to this section 20 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 Holding Company.
(b) To the maximum extent permitted under applicable law, during the
term of this Agreement and for a period of six (6) years thereafter, the Holding
Company shall indemnify, and shall cause its subsidiaries and affiliates to
indemnify 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 Association or any subsidiary or affiliate thereof.
21. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Holding Company and its successors and assigns, including any successor by
merger or consolidation or any other person or firm or corporation to which all
or substantially all of the assets and business of the Holding Company may be
sold or otherwise transferred. Failure of the Holding Company to obtain from any
successor its express written assumption of the Holding Company's obligations
hereunder at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by Executive to the Holding
Company.
22. GUARANTEE
The Holding Company hereby agrees to guarantee the payment by the
Association of any benefits and compensation to which Executive is or may be
entitled to under the terms and conditions of the Employment Agreement dated as
of May 20, 1997 between the Association and Executive, a copy of which is
attached hereto as Exhibit A.
23. NON-DUPLICATION
In the event that Executive shall perform services for the Association
or any other direct or indirect subsidiary of the Holding Company, any
compensation or benefits provided to Executive by such other employer shall be
applied to offset the obligations of the Holding Company hereunder, it being
intended that this Agreement set forth the aggregate compensation and benefits
payable to Executive for all services to the Holding Company and all of its
direct or indirect subsidiaries.
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SIGNATURES
IN WITNESS WHEREOF, First Bank of Florida and First Palm Beach Bancorp, Inc.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, all as of the day and year first above
written.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis Jr.
- ------------------------------ -----------------------
Secretary Duly Authorized Officer
SEAL
ATTEST: FIRST PALM BEACH BANCORP, INC.
(Guarantor)
/s/ Carol A. Patton By: /s/ Louis O. Davis, Jr.
- ------------------------------ ---------------------------
SEAL
WITNESS:
/s/ Elaine P. Gerboc By: /s/ R. Randy Guemple
- ------------------------------ ---------------------------
Executive
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EXHIBIT 10.4
FIRST BANK OF FLORIDA
EMPLOYMENT AGREEMENT
This AGREEMENT is made effective as of May 20, 1997 by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its principal administrative office at 450 South Australian
Avenue, West Palm Beach, Florida, and R. Randy Guemple (the "Executive"),
residing at 1559 Grantham Drive, West Palm Beach, Florida 33414. Any reference
to "Holding Company" herein shall mean the Association's parent, First Palm
Beach Bancorp, Inc., or any successor thereto.
WHEREAS, Executive currently serves the Association in the capacity of
Executive Vice President and Chief Operating Officer, and
WHEREAS, the Association wishes to assure itself of the continued
availability of the services of Executive for the period provided in this
Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the
Association on a full-time basis for said period on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and upon the other terms and conditions hereinafter
provided; the parties hereby agree as follows:
1. POSITION AND RESPONSIBILITIES
(a) During the period and upon the terms and conditions set forth
herein, Executive agrees to serve as Executive Vice President and Chief
Operating Officer of the Association. The Executive shall have such power,
authority and responsibility and shall perform such duties as are prescribed by
or under the By-Laws of the Association and as are customarily performed by
persons situated in a similar executive capacity, including, without limitation,
the general direction of all the business and affairs of the Association, the
hiring and supervision of all senior management personnel, and long-term
strategic planning for the Association, including growth by merger and
acquisition. Failure to reelect Executive as [President and Chief Executive
Officer] without the consent of the Executive shall constitute a breach of this
Agreement by the Association.
(b) Executive's principal place of employment shall be at the
Association's executive offices at the address first above written, or at such
other location within a 25-mile radius thereof at which the Association shall
maintain its principal executive offices, or at such other location as the
Association and Executive may mutually agree upon. The Association shall provide
Executive at his principal place of employment with a private office,
secretarial services and other support services and facilities suitable to his
position with the Association and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement. The Association
shall reimburse Executive for his ordinary and necessary business expenses,
including, without lim itation, fees for memberships in such clubs and
organizations as Executive and the Association 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 Association of an
itemized account of such expenses in such form as the Association may reasonably
require.
2. TERM
(a) The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months thereafter. Prior to the
first anniversary date of this Agreement, and on each anniversary date
thereafter (each an "Anniversary Date"), the Board of Directors of the
Association ("Board") shall review the terms of this Agreement and Executive's
performance of services hereunder and may, in the absence of objection from
Executive, approve an extension of the Employment Agreement. In such event, the
Employment Agreement shall be extended to the third anniversary of the relevant
Anniversary Date.
(b) 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 the Anniversary Date on which the term of this Agreement (as
extended pursuant to section 2(a) of this Agreement) is then scheduled to
expire.
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(c) Nothing in this Agreement shall be deemed to prohibit the
Association at any time from terminating Executive's employment during the term
of this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Association and Executive in the
event of any such termination shall be determined under this Agreement.
(d) During the period of his employment hereunder, except for periods
of absence occasioned by illness, holidays, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties hereunder including activities and services related to the organization,
operation and management of the Association and participation in community and
civic organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time-to-time, Executive may serve,
or continue to serve, on the Boards of Directors of, and hold any other offices
or positions in, companies or organizations, which, in such Board's judgment,
will not present any conflict of interest with the Association, or materially
affect the performance of Executive's duties pursuant to this Agreement.
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
Association and generally applicable to all similarly situated executives.
Executive may also serve as an officer or director of the Holding Company on
such terms and conditions as the Association and the Holding Company may
mutually agree upon, and such service shall not be deemed to materially
interfere with Executive's performance of his duties hereunder or otherwise to
result in a material breach of this Agreement.
3. COMPENSATION AND REIMBURSEMENT
(a) In consideration for the services to be rendered by Executive
hereunder, the Association shall pay Executive a salary at an initial annual
rate of $160,000 per year ("Base Salary"), payable in approximately equal
installments in accordance with the Association's customary payroll practices
for senior officers. The Board, or a Committee designated thereby, shall review
Executive's Base Salary at such times as it deems appropriate, but not less
frequently then once every twelve months, and the Board may, in its discretion,
approve an increase in Executive's Base Salary. Any such increase shall become
the "Base Salary" for purposes of this Agreement. In addition to Base Salary,
Executive may receive other cash compensation from the Association for services
hereunder at such times, in such amounts and on such terms and conditions as the
Board may determine from time to time. Base Salary shall include any amounts of
compensation deferred by Executive under a qualified plan maintained by the
Association.
(b) During the term of this Agreement, Executive shall be treated as an
employee of the Association and shall be eligible 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, professional financial planning services
and tax preparation programs and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, ESOP, stock option and appreciation rights plans and restricted stock
plans) as may from time to time be maintained by, or cover employees of, the
Association, in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and consistent
with the Association's customary practices.
(c) In addition to the Base Salary provided for by paragraph (a) of
this section 3, the Association shall provide Executive with the perquisites
customarily provided to senior officers and may provide such additional
compensation in such form and such amounts as the Board may from time-to-time
determine.
4. TERMINATION OF EMPLOYMENT WITH SEVERANCE BENEFITS
(a) Executive shall be entitled to the severance benefits described
herein in the event that his employment with the Association terminates during
the term of this Agreement under any of the following circumstances:
(i) Executive's voluntary resignation from employment
with the Association within ninety (90) days following:
(A) the failure of the Board to appoint or re-appoint
or elect or re-elect Executive to the office described in
section 1 of this Agreement (or a more senior office of the
Association);
(B) if Executive is a member of the Board as of the
date of this Agreement, the failure of the stockholders of the
Association to elect or re-elect Executive or the failure of
the Board (or the nominating committee thereof) to nominate
Executive for such election or re-election;
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(C) the expiration of a thirty (30) day period
following the date on which Executive gives written notice to
the Association of its material failure, whether by amendment
of the Association's Organization Certificate or By-laws,
action of the Board or the Association's stockholders or
otherwise, to vest in Executive the functions, duties, or
responsibilities prescribed in section 1 of this Agreement,
unless, during such thirty (30) day period, the Association
fully cures such failure; or
(D) the expiration of a thirty (30) day period
following the date on which Executive gives written notice to
the Association of its material breach of any term, condition
or covenant contained in this Agreement (including, without
limitation any reduction of Executive's rate of Base Salary in
effect from time to time and any change in the terms and
conditions of any compensation or benefit program in which
Executive participates which, alone 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 Association fully cures such failure; or
(ii) the termination of Executive's employment with the
Association for any other reason not described in section 7;
then, subject to sections 15 and 16, the Association shall provide the benefits
and pay to Executive the amounts described in section 4(b).
(b) Upon the termination of Executive's employment with the Association
under circumstances described in section 4(a) of this Agreement, the Association
shall pay and provide to Executive (or, in the event of his death, to his
estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
4(b)), as of the date of the termination of his employment with the
Association, 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 Association'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
4(b)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for the Remaining Unexpired Employment Period, 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 work ing for the Association during the Remaining
Unexpired Employment Period at the highest annual rate of compensation
achieved during that portion of the term of this Agreement which is
prior to Executive's termination of employment with the Association, it
being understood that Executive's "qualifying event" for purposes of
continuation coverage under the Consolidated Budget Reconciliation Act
("COBRA") shall occur at the expiration of this period;
(iv) within five (5) days following his termination of
employment with the Association, a lump sum payment, in an amount equal
to the salary that Executive would have earned if he had continued
working for the Association during the Remaining Unexpired Employment
Period at the highest annual rate of salary achieved during that
portion of the term of this Agreement which is prior to Executive's
termination of employment with the Association. Such lump sum is 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 Association, 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 Association, if he were 100% vested
thereunder and had continued working for the Association
during the Re maining Unexpired Employment Period, 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
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Remaining Unexpired Employment Period and by adding to the
compensation recognized under such plans for the year in which
termination of employment occurs all amounts payable under
sections 4(b)(i), (iv) and (vi); 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 (as
hereinafter defined) 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"); and
(vi) within five (5) days following his termination of
employment with the Association, the payments that would have been made
to Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Association if he had continued working for the Association during
the Re maining Unexpired Employment Period and had earned in each
calendar year that ends during the Remaining Unexpired Employment
Period a bonus in an amount equal to the highest annual bonus or
incentive award actually paid to him in any calendar year ending during
the three-year period ending on the date of termination of employment.
The Association and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termi nation 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 4(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to Executive's efforts, if any, to
mitigate damages. The Association and Executive further agree that the
Association may condition the payments and benefits (if any) due under sections
4(b)(iii), (iv), (v), and (vi) on the receipt of Executive's resignation from
any and all positions which he holds as an officer, director or committee member
with respect to the Holding Company or the Association or any subsidiary or
affiliate of either of them.
5. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL
(a) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association's outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly
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from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Association of all or substantially all of the Association's
assets to an entity which assumes the obligations set forth in this Agreement,
and at least 60% of the combined voting power in the election of directors of
the voting securities of which are owned by stockholders of the Association in
substantially the same proportions as their ownership of the Association any
immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 5(a) if the term "Holding Company" were substituted for the term
"Association"each time it appears herein.
(b) Subject to sections 15 and 16, Executive shall be entitled to the
payments and benefits contemplated by section 5(c) in the event of his
termination of employment with the Association following a Change of Control
under any of the circumstances described in section 4(a) of this Agreement or
under any of the following circumstances:
(i) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following his demotion, loss of title, office or significant authority
or responsibility, or following any material reduction in any element
of his compensation and benefits;
(ii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement and within ninety (90) days
following (A) any relocation of his principal place of employment
outside of a 25-mile radius of the principal place of employment
immediately prior to the Change of Control that would require a
relocation of his residence in order to be able to commute to such new
place of employment within a commuting time not in excess of the
greater of 60 minutes or Executive's commuting time prior to the Change
of Control or (B) any material adverse change in working conditions at
such principal place of employment; or
(iii) resignation, voluntary or otherwise, by Executive at any
time during the term of this Agreement following the failure of any
successor to the Association in the Change of Control to include
Executive in any compensation or benefit program maintained by it or
covering any of its executive officers, unless Executive is already
covered by a substantially similar plan of the Association which is at
least as favorable to him.
(c) Upon the termination of Executive's employment with the Association
following a Change of Control under circumstances described in section 4(a) or
section 5(b) of this Agreement, the Association shall pay and provide to
Executive (or, in the event of his death, to his estate):
(i) his earned but unpaid compensation (including, without
limitation, all items which constitute wages under applicable law and
the payment of which is not otherwise provided for under this Section
5(c)), as of the date of the termination of his employment with the
Association, 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 Association'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
5(c)(ii), and after taking into account the coverage provided by any
subsequent employer, if and to the extent necessary to provide for
Executive, for a period of thirty-six (36) months following the
termination of Executive's employment (the "Payment Period"), 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 Association during the Payment
Period at the highest annual rate of compensation achieved during that
portion of the term of this Agreement which is prior to Executive's
termination of employment with the Association, it being understood
that Executive's "qualifying event" for purposes of continuation
coverage under COBRA shall occur at the expiration of this period;
(iv) within five (5) days following his termination of
employment with the Association, a lump sum payment, in an amount equal
to the salary that Executive would have earned if he had continued
working for the
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Association during the Payment Period at the highest annual rate of
salary achieved during that portion of the term of this Agreement which
is prior to Executive's termination of employment with the Association.
Such lump sum is 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 Association, 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 Association, if he were 100% vested
thereunder and had continued working for the Association
during the Payment Period, 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 Payment Period and by adding to the
compensation recognized under such plans for the year in which
termination of employment occurs all amounts payable under
sections 5(c)(i), (iv) and (vi); 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");
and
(vi) within five (5) days following his termination of
employment with the Association, the payments that would have been made
to Executive under any cash bonus or long-term or short-term cash
incentive compensation plan maintained by, or covering employees of,
the Association if he had continued working for the Association during
the Payment Period and had earned in each calendar year that ends
during the Payment Period a bonus in an amount equal to the highest
annual bonus or incentive award actually paid to him in any calendar
year ending during the three-year period ending on the date of
termination of employment.
The Association and Executive hereby stipulate that the damages which may be
incurred by Executive following any such termi nation of employment following a
Change of Control are not capable of accurate measurement as of the date first
above written and that the payments and benefits contemplated by this section
5(c) constitute reasonable damages under the circumstances and shall be payable
without any requirement of proof of actual damage and without regard to
Executive's efforts, if any, to mitigate damages. The Association and Executive
further agree that the Association may condition the payments and benefits (if
any) due under sections 5(c)(iii), (iv), (v), and (vi) on the receipt of
Executive's resignation from any and all positions which he holds as an officer,
director or committee member with respect to the Association or the Holding
Company or any subsidiary or affiliate of either of them.
6. TERMINATION UPON RETIREMENT
Termination of Executive based on "Retirement" shall mean termination
in accordance with the Association's retirement policy or in accordance with any
retirement arrangement established with Executive's consent with respect to him.
Upon termination of Executive upon Retirement, Executive shall be entitled to
all benefits under any retirement plan of the Association and other plans to
which Executive is a party and this Agreement shall be terminated.
7. TERMINATION WITHOUT ADDITIONAL ASSOCIATION LIABILITY
In the event that Executive's employment with the Association shall
terminate during the term hereof on account of:
(a) the discharge of Executive for "cause," which, for purposes of this
Agreement shall mean personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease and desist order, or
any material breach of this Agreement, in each case as measured against
standards generally prevailing at the relevant time in the savings and community
banking industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have
been discharged for cause unless and until the following procedures shall have
been followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given;
(b) Executive's voluntary resignation from employment with the
Association for reasons other than those specified in section 4(a)(i) or
section 5(b);
(c) Executive's death; or
(d) a determination that Executive is eligible for long-term disability
benefits under the Association's long-term disability insurance program or, if
there is no such program, under the federal Social Security Act;
then the Association 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 salary 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
Association.
(e) For purposes of section 7(a), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
8. NOTICE
(a) Any purported termination by the Association or by Executive shall
be communicated by Notice of Termination to the other party hereto. Except in a
termination for cause, such Notice of Termination shall be provided to Executive
not less than thirty (30) days prior to Executive's Date of Termination. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated written
notice which shall (i) indicate the specific termination provision in this
Agreement relied upon; (ii) set forth in detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated; and (iii) specify a Date of Termination, which shall be
not less than thirty (30) days nor more than ninety (90) days after such Notice
of Termination is given, except in the case of a Termination for cause, in which
case the Notice of Termination may specify a Date of Termination as of the date
of such Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the
Notice of Termination.
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9. POST-TERMINATION OBLIGATIONS
(a) All payments and benefits to Executive under this Agreement shall
be subject to Executive's compliance with paragraph (b) of this Section 9 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.
(b) Executive shall, upon reasonable notice and at the Association's
expense, furnish such information and assistance to the Association as may
reasonably be required by the Association in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.
10. NON-COMPETITION
(a) Upon any termination of Executive's employment hereunder pursuant
to section 4 hereof, Executive agrees not to compete with the Association and/or
the Holding Company for a period of one (1) year following such termination in
any city, town or county in which the Association and/or the Holding Company has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board. Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Association and/or the Holding
Company. The parties hereto, recognizing that irreparable injury will result to
the Association and/or the Holding Company, its business and property in the
event of Executive's breach of this Subsection 10(a) agree that in the event of
any such breach by Executive, the Association and/or the Holding Company will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employers, employees and all persons acting for or with
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to section 4 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Association and/or the
Holding Company, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Association and/or the Holding Company from
pursuing any other remedies available to the Association and/or the Holding
Company for such breach or threatened breach, including the recovery of damages
from Executive.
(b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Association and
affiliates thereof, as it may exist from time-to-time, is a valuable, special
and unique asset of the business of the Association. Executive will not, during
or after the term of his employment, disclose any knowledge of the past,
present, planned or considered business activities of the Association or
affiliates thereof to any person, firm, corporation, or other entity for any
reason or purpose whatsoever. Notwithstanding the foregoing, Executive may
disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas which are not solely and exclusively derived from the business
plans and activities of the Association. In the event of a breach or threatened
breach by Executive of the provisions of this section 10, the Association will
be entitled to an injunction restraining Executive from disclosing, in whole or
in part, the knowledge of the past, present, planned or considered business
activities of the Association or affiliates thereof, or from rendering any
services to any person, firm, corporation, other entity to whom such knowledge,
in whole or in part, has been disclosed or is threatened to be disclosed.
Nothing herein will be construed as prohibiting the Association from pursuing
any other remedies available to it for such breach or threatened breach,
including the recovery of damages from Executive.
11. SOURCE OF PAYMENTS; GUARANTEE
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Association. The Holding Company hereby
irrevocably and unconditionally guarantees to Executive the payment of all
amounts, and the performance of all other obligations, due from the Association
in accordance with this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between the
Association or any predecessor of the Association and Executive (including
without limitation that certain Employment Agreement between the Association and
Executive dated , 1993), except that this Agreement shall not affect or operate
to reduce any benefit or compensation inuring to the Executive of a kind
elsewhere provided. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to
him without reference to this Agreement.
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(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
13. 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 affected any such action shall be null,
void, and of no effect.
14. MODIFICATION AND WAIVER
(a) Except for increases in the Base Salary as provided for in section
3(a), this Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.
15. LIMITATION PROVISIONS
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive under
section 4(b) or section 5(c) hereof (exclusive of amounts described in section
4(b)(i) or (ii) or 5(c)(i)or (ii)), exceed three times Executive's average
annual total compensation for the last five consecutive calendar years to end
prior to his termination of employment with the Association (or for his entire
period of employment with the Association if less than five calendar years).
(b) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Holding
Company or the Association, any person whose actions result in
a Change of Control of the Association or any person
affiliated with the Holding Company or the Association or such
person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), then,
to the extent necessary to make such portion of the Total
Payments deductible (and after taking into account any
reduction in the Total Payments provided in such other plan,
arrangement or agreement), the cash Severance Payments shall
first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 15(b), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments
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(other than those referred to in clauses (i) or (ii)), in
their entirety constitute reasonable compensation for services
actually rendered within the meaning of Section 280G(b) (4)
(B) of the Code or are otherwise not subject to disallowance
as deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
15(b), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of Section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in Section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section
15(b) (A) hereof, and the benefits under section 5(c)(iii)
hereof which remain payable after the application of section
15(b) hereof are thereafter reduced pursuant thereto because
of the receipt by Executive of substantially similar benefits,
the Association shall, at the time of such reduction, pay to
Executive the lowest of (a) the amount of the decrease made in
the Severance Payments pursuant to section 15(b) hereof, (b)
the amount of the subsequent reduction in such benefits, or
(c) the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of Section 280G of the Code.
16. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purpose of complying with
various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, if the
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice served
under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1818 (e)(3) or (g)(1), the Association's prospective obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Association may in its discretion (i) pay the Executive all or part of the
compensation withheld while their contract obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.
(b) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss.1818 (e)(4) or
(g)(1)), all prospective obligations of the Association under this contract
shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.
(c) Notwithstanding anything herein to the contrary, if the Association
is in default as defined in Section 3(x)(1) (12 U.S.C. 1813 (x)(1)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all prospective obligations of the
Association under this contract shall terminate as of the date of default, but
this paragraph shall not affect any vested rights of the parties hereto.
(d) Notwithstanding anything herein to the contrary, all prospective
obligations of the Association under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Association, (I) by the Director of the Office of
Thrift Supervision (or his designee), or the Federal Deposit Insurance
Corporation, at the time FDIC enters into an agreement to provide assistance to
or on behalf of the Association under the authority contained in Section 13(c)
(12 U.S.C. ss.1823 (c)) of the Federal Deposit Insurance Act; or (ii) by the
Director of the Office of Thrift Supervision ("OTS") (or his designee) at the
time the Director (or his designee) approves a supervisory merger to resolve
problems related to the operations of the Association or when the Association is
determined by the Director to be in an unsafe or unsound condition. Any rights
of the parties that have already vested, however, shall not be affected by such
action.
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(e) Notwithstanding anything herein to the contrary, any payments made
to Executive by the Association, whether pursuant to this Agreement or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k) and any regulations promulgated thereunder.
If and to the extent that any of the foregoing provisions shall cease
to be required by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
17. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
18. HEADING FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
19. GOVERNING LAW
The validity, interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Florida without (regard
to the conflict of laws principles thereof), but only to the extent not
preempted by federal law.
20. INDEMNIFICATION FOR ATTORNEYS' FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred 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 ef forts, in good faith, to defend or enforce the
terms of this Agreement; provided, however, that Executive shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the
Association's obligations hereunder shall be conclusive evidence of Executive's
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise. This provision
shall be inoperative if and to the extent that, but only if and to the extent
that, it shall be determined that compliance herewith would violate any
applicable law or regulation.
21. INDEMNIFICATION AND INSURANCE
(a) During the term of this Agreement and for a period of six (6) years
thereafter, the Association shall cause 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 Association or service
in other capacities at the request of the Association. The coverage provided to
Executive pursuant to this section 21 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 Association.
(b) To the maximum extent permitted under applicable law, during the
term of this Agreement and for a period of six (6) years thereafter, the
Association shall indemnify, and shall cause its subsidiaries and affiliates to
indemnify 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 Association or any subsidiary or affiliate thereof.
This section 21(b) shall not be applicable where section 20 is applicable.
22. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Association and its successors and assigns, including any successor by
merger or consolidation or any other per son or firm or corporation to which all
or substantially all of the assets and business of the Association may be sold
or otherwise transferred. Failure of the Association to obtain from any
successor its express written assumption of the Association's obligations
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hereunder at least sixty (60) days in advance of the scheduled effective date of
any such succession shall be deemed a material breach of this Agreement unless
cured within ten (10) days after notice thereof by Executive to the Association.
SIGNATURES
IN WITNESS WHEREOF, First Bank of Florida and First Palm Beach Bancorp, Inc.
have caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, as of the day and year first above written.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ------------------------------ -------------------------------
Secretary Duly Authorized Officer
SEAL
ATTEST: FIRST PALM BEACH BANCORP, INC.
(Guarantor)
/s/ Carol A. Patton By: /s/ Louis O. Davis, Jr.
- ------------------------------ -------------------------------
SEAL
WITNESS:
/s/ Elaine P. Gerboc By: /s/ R. Randy Guemple
- ------------------------------ -------------------------------
Executive
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EXHIBIT 10.5
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and John Trammel, an individual residing at
6405 Indian Wells Blvd., Boynton Beach, Florida 33437 ("Executive"). The term
"Association" refers to First Bank of Florida, the wholly-owned subsidiary of
the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. On May 20, 1998 and on each May
20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall be
extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding Company
and/or the Association, Executive shall perform such executive services for the
Holding Company and/or the Association as may be consistent with Executive's
title and may from time-to-time be assigned to Executive by the Holding
Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding Company
and/or the Association, the Executive shall devote such time and effort to the
affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding Company
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for Cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in a
Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Holding Company, plus
(B) the higher of the highest annual bonus or incentive payment earned by or
accrued in respect of Executive in respect of any of the one year immediately
preceding that in which the Date of Termination occurs or the highest annual
bonus or incentive payment so earned in respect of any of the three years
immediately preceding that in which the Change of Control of the Holding Company
occurs. Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding Company
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary termination of employment, other than a
Termination for Cause, the Holding Company shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such three year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's
termination of employment, a lump sum payment in an amount equal to the
excess, if any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Holding Company or the
Association, if Executive were 100% vested thereunder and had
continued working for the Holding Company or the Association
during the remaining term of this Agreement, 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 term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Holding Company or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Holding Company or the Association, any person whose actions
result in a Change of Control of the Holding Company or any
person affiliated with the Holding Company or the Association
or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Holding Company, an affiliate or a person making such payment
or providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that -------- ------- Executive
may elect (at any time prior to the delivery of a Notice of
Termination hereunder) to have the noncash Severance Payments
reduced (or eliminated) prior to any reduction of the cash
Severance Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall
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be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and
selected by the accounting firm which was, immediately prior
to the Change of Control of the Holding Company, the Holding
Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or
(ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section
280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions by reason of Section 280G of the
Code, in the opinion of Tax Counsel, and (iv) the value of any
noncash benefit or any deferred payment or benefit included in
the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Holding Company in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of section 280G of the Code, then Executive shall have
an obligation to pay the Holding Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under section 3 (b) hereof which
remain payable after the application of section 3 (e) hereof
are thereafter reduced pursuant thereto because of the receipt
by Executive of substantially similar benefits, the Holding
Company shall, at the time of such reduction, pay to Executive
the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the
amount of the subsequent reduction in such benefits, or (c)
the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the
Notice of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ],1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the
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Holding Company any obligation to employ or retain Executive in its employ for
any period, but any termination following a Change of Control shall be subject
to the terms and conditions hereof.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
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15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of his employment, in seeking to enforce
any of her rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this section shall be in addition to
all rights to which Executive is otherwise entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 30th day of June, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ Elizabeth Cook By: /s/ Louis O. Davis, Jr.
- ------------------------------- --------------------------------
Assistant Secretary
WITNESS:
/s/ Carol A. Patton /s/ John C. Trammel
- ------------------------------- --------------------------------
Executive
SEAL
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EXHIBIT 10.6
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and John Trammel, an individual residing at 6405 Indian
Wells Blvd., Boynton Beach, Florida 33437 ("Executive"). The term "Holding
Company" refers to First Palm Beach Bancorp, Inc., the Association's parent, a
corporation organized under the laws of the State of Delaware, or any successor
thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on May 20, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. Prior to the first anniversary
date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during the
term of this Agreement and following a Change of Control of the Association (as
hereinafter defined), Executive shall: (a) devote his full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use his best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association (as
hereinafter defined) followed at any time during the term of this Agreement by
the involuntary termination of Executive's employment, other than a Termination
for Cause as defined in Section 2 (c) hereof, or by the voluntary termination of
Executive's employment for Good Reason (as hereinafter defined), the provisions
of section 3 shall apply. For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the Association to comply with any material provision of
this Agreement, which failure has not been cured within ten (10) days after
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notice of such noncompliance has been given by Executive to the Association; (B)
the assignment to Executive of any duties inconsistent with Executive's
positions, duties, responsibilities and status with the Association immediately
prior to the Change of Control of the Association, any removal of Executive
from, or any failure to re-elect Executive to, any of the positions previously
held by Executive, or a change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control of the
Association, a reduction by the Association in the Executive's annual salary as
in effect immediately prior to Change of Control of the Association, or as the
same may be increased from time-to-time, or the requirement that Executive be
relocated to an office which is more than 25 miles from the current principal
executive office of the Association, or the failure of the Association to
continue in effect any bonus, benefit or compensation plan, life insurance plan,
health or accident plan or disability plan in which Executive is participating
at the time of Change of Control of the Association, or the taking of any action
by the Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach
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of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
PROVIDED, HOWEVER, that Executive shall not be deemed to have been discharged
for cause unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five
(5) days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity
to make oral and written presentations to the members of the Board, on
his own behalf, or through a representative, who may be his legal
counsel, to refute the grounds set forth in the Proposed Termination
Resolution at one or more meetings of the Board to be held no sooner
than fifteen (15) days and no later than thirty (30) days after
Executive's receipt of the Proposed Termination Notice ("Termination
Hearings"); and
(iv) within ten (10) days following the end of the
Termination Hearings, the Board shall adopt a resolution duly approved
by affirmative vote of a majority of the entire Board at a meeting
called and held for such purpose (A) finding that in the good faith
opinion of the Board the grounds for termination set forth in the
Proposed Termination Resolution exist and (B) terminating Executive's
employment ("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the
part of Executive shall be considered "willful" unless it is done, or omitted to
be done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Association, plus (B)
the higher of the highest annual bonus or incentive payment earned by or accrued
in respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the one year immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for three years or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's beneficiaries by testate or intestate succession in the event of
Executive's death during the period during which such payments and benefits are
being provided.
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Executive's "qualifying event" for purposes of continuation coverage under the
Consolidated Budget Reconciliation Act ("COBRA") shall occur at the expiration
of such one year period.
(c) Upon the involuntary termination of Executive's employment with
the Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled
as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actually entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables prescribed under section 415(b)(2)(E)(v) of the Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits Guaranty Corporation for the valuation of immediate
annuities payable under terminating single-employer defined benefit
plans for the month in which Executive's termination of employment
occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(b) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
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(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding
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Company and Executive dated as of June 30, 1997), except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to his termination of employment with the
Association (or for his entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if
the Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective
obligations of the Association under this Agreement shall terminate as of the
effective date of the order, but vested rights and obligations of the
Association and Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if
the Association is in default (within the meaning of section 3(x)(i) of the FDI
Act, 12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association
under this Agreement shall terminate as of the date of default, but vested
rights and obligations of the Association and Executive shall not be affected.
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(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or his designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred by Executive in
connection with or arising out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
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16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to be
executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ Elizabeth Cook By: /s/ Louis O. Davis, Jr.
- ------------------------------- --------------------------------
Assistant Secretary
WITNESS:
/s/ Elaine P. Gerboc /s/ John C. Trammel
- ------------------------------- --------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
--------------------------------
ATTEST:
/s/ Carol A. Patton
--------------------------------
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EXHIBIT 10.7
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and Rita Groton, an individual residing at 6252
Floridian Circle, Lake Worth, Florida 33463 ("Executive"). The term
"Association" refers to First Bank of Florida, the wholly-owned subsidiary of
the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30,
1997 and shall terminate on May 19, 2000, unless further extended in accordance
with the terms and conditions hereinafter set forth. On May 20, 1998 and on each
May 20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall
be extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding
Company and/or the Association, Executive shall perform such executive services
for the Holding Company and/or the Association as may be consistent with
Executive's title and may from time-to-time be assigned to Executive by the
Holding Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding
Company and/or the Association, the Executive shall devote such time and effort
to the affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding
Company (as hereinafter defined) followed at any time during the term of this
Agreement by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for
Cause and setting forth the purported grounds for such termination
("Proposed Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied
by a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on
her own behalf, or through a representative, who may be her legal
counsel, to refute the grounds set forth in the Proposed Termination
Resolution at one or more meetings of the Board to be held no sooner
than fifteen (15) days and no later than thirty (30) days after the
Executive's receipt of the Proposed Termination Notice ("Termination
Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion
of the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's
employment ("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the
part of Executive shall be considered "willful" unless it is done, or omitted to
be done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in
a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Holding Company, plus
(B) the higher of the highest annual bonus or incentive payment earned by or
accrued in respect of Executive in respect of any of the one year immediately
preceding that in which the Date of Termination occurs or the highest annual
bonus or incentive payment so earned in respect of any of the three years
immediately preceding that in which the Change of Control of the Holding Company
occurs. Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding
Company followed at any time during the term of this Agreement by Executive's
voluntary (for Good Reason) or involuntary termination of employment, other than
a Termination for Cause, the Holding Company shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such three year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined),
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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's termination
of employment, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to which
Executive would be entitled under any and all qualified and
non-qualified defined benefit pension plans maintained by, or
covering employees of, the Holding Company or the Association, if
Executive were 100% vested thereunder and had continued working
for the Holding Company or the Association during the remaining
term of this Agreement, 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 term of this Agreement and by adding to the
compensation recognized under such plans for the year in which
termination of employment occurs all amounts payable under
sections 3(a), 3(b) and 3(c)(i); over
(B) the present value of the benefits to which Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this Agreement, in
the event that any payment or benefit received or to be received by Executive in
connection with a Change of Control of the Holding Company or the termination of
the Executive's employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Holding Company or the
Association, any person whose actions result in a Change of Control of the
Holding Company or any person affiliated with the Holding Company or the
Association or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the "Severance Payments"),
being hereinafter called "Total Payments") would not be deductible (in whole or
part), by the Holding Company, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the Code, then, to the
extent necessary to make such portion of the Total Payments deductible (and
after taking into account any reduction in the Total Payments provided in such
other plan, arrangement or agreement), the cash Severance Payments shall first
be reduced (if necessary, to zero), and all other Severance Payments shall
thereafter be reduced (if necessary, to zero); PROVIDED, HOWEVER, that Executive
may elect (at any time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or eliminated) prior
to any reduction of the cash Severance Payments.
(B) For purposes of the limitation contained in Subsection (A) of
this section 3(e), (i) no portion of the Total Payments the receipt or
enjoyment of which Executive shall have effectively waived in writing
prior to the delivery of a Notice of Termination shall be taken into
account, (ii) no portion of the Total Payments shall be taken into
account which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the accounting firm
which was, immediately prior to the Change of Control of the Holding
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Company, the Holding Company's independent auditor (the "Auditor"),
does not constitute a "parachute payment" within the meaning of
Section 280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments shall be
reduced only to the extent necessary so that the Total Payments (other
than those referred to in clauses (i) or (ii)) in their entirety
constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b) (4) (B) of the Code or are
otherwise not subject to disallowance as deductions by reason of
Section 280G of the Code, in the opinion of Tax Counsel, and (iv) the
value of any noncash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4) of the
Code.
(C) If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding that, notwithstanding
the good faith of Executive and the Holding Company in applying the
terms of this section 3(e), the aggregate "parachute payments" paid to
or for Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by reason of
section 280G of the Code, then Executive shall have an obligation to
pay the Holding Company upon demand an amount equal to the sum of (i)
the excess of the aggregate "parachute payments" paid to or for
Executive's benefit over the aggregate "parachute payments" that could
have been paid to or for Executive's benefit without any portion of
such "parachute payments" not being deductible by reason of section
280G of the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section 1274 (b)
(2) (B) of the Code from the date of Executive's receipt of such
excess until the date of such payment. If the Severance Payments shall
be decreased pursuant to section 3(e) (A) hereof, and the benefits
under section 3 (b) hereof which remain payable after the application
of section 3 (e) hereof are thereafter reduced pursuant thereto
because of the receipt by Executive of substantially similar benefits,
the Holding Company shall, at the time of such reduction, pay to
Executive the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the amount of
the subsequent reduction in such benefits, or (c) the maximum amount
which can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the
Notice of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ],1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the Holding Company any
obligation to employ or retain Executive in its employ for any period, but any
termination following a Change of Control shall be subject to the terms and
conditions hereof.
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7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of her employment, in seeking to enforce
any of her rights hereunder,
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or in connection with any tax audit or proceeding to the extent attributable to
the application of Section 4999 of the Code to any payment or benefit provided
hereunder, provided that Executive shall not be entitled to such reimbursement
if the Holding Company proves, by clear and convincing evidence, that Executive
proceeded in such action in bad faith. Executive shall also be entitled to
post-judgment interest at the then-current prime rate charged by Citibank, NA or
any successor thereto, on any money judgment obtained. Amounts paid pursuant to
this section shall be in addition to all rights to which Executive is otherwise
entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including her heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and her heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of her having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ------------------------------ --------------------------
Secretary
WITNESS:
/s/ Marcia R. Sund By: /s/ Rita Groton
- ------------------------------ ---------------------------
Executive
SEAL
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EXHIBIT 10.8
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and Rita Groton, an individual residing at 6252 Floridian
Circle, Lake Worth, Florida 33463 ("Executive"). The term "Holding Company"
refers to First Palm Beach Bancorp, Inc., the Association's parent, a
corporation organized under the laws of the State of Delaware, or any successor
thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on May 20,
1997 and shall terminate on May 19, 2000, unless further extended in accordance
with the terms and conditions hereinafter set forth. Prior to the first
anniversary date of this Agreement and on each anniversary date thereafter (each
an "Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during
the term of this Agreement and following a Change of Control of the Association
(as hereinafter defined), Executive shall: (a) devote her full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use her best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment, other than a
Termination for Cause as defined in Section 2 (c) hereof, or by the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Association to comply with any material
provision of this Agreement, which failure has not been cured within ten (10)
days after
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notice of such noncompliance has been given by Executive to the Association; (B)
the assignment to Executive of any duties inconsistent with Executive's
positions, duties, responsibilities and status with the Association immediately
prior to the Change of Control of the Association, any removal of Executive
from, or any failure to re-elect Executive to, any of the positions previously
held by Executive, or a change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control of the
Association, a reduction by the Association in the Executive's annual salary as
in effect immediately prior to Change of Control of the Association, or as the
same may be increased from time-to-time, or the requirement that Executive be
relocated to an office which is more than 25 miles from the current principal
executive office of the Association, or the failure of the Association to
continue in effect any bonus, benefit or compensation plan, life insurance plan,
health or accident plan or disability plan in which Executive is participating
at the time of Change of Control of the Association, or the taking of any action
by the Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach
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of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
PROVIDED, HOWEVER, that Executive shall not be deemed to have been discharged
for cause unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five
(5) days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity
to make oral and written presentations to the members of the Board, on
her own behalf, or through a representative, who may be her legal
counsel, to refute the grounds set forth in the Proposed Termination
Resolution at one or more meetings of the Board to be held no sooner
than fifteen (15) days and no later than thirty (30) days after
Executive's receipt of the Proposed Termination Notice ("Termination
Hearings"); and
(iv) within ten (10) days following the end of the
Termination Hearings, the Board shall adopt a resolution duly approved
by affirmative vote of a majority of the entire Board at a meeting
called and held for such purpose (A) finding that in the good faith
opinion of the Board the grounds for termination set forth in the
Proposed Termination Resolution exist and (B) terminating Executive's
employment ("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the
part of Executive shall be considered "willful" unless it is done, or omitted to
be done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to three (3) time the sum of (A) the higher of Executive's base salary in effect
immediately prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based and Executive's annual base salary in effect
immediately prior to the Change of Control of the Association, plus (B) the
higher of the highest annual bonus or incentive payment earned by or accrued in
respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the three years immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for three years or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's beneficiaries by testate or intestate succession in the event of
Executive's death during the period during which such payments and benefits are
being provided.
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Executive's "qualifying event" for purposes of continuation coverage under the
Consolidated Budget Reconciliation Act ("COBRA") shall occur at the expiration
of such one year period.
(c) Upon the involuntary termination of Executive's employment with
the Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled
as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actually entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables prescribed under section 415(b)(2)(E)(v) of the Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits Guaranty Corporation for the valuation of immediate
annuities payable under terminating single-employer defined benefit
plans for the month in which Executive's termination of employment
occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
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(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the
Notice of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding
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Company and Executive dated as of June 30, 1997), except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
(b) The termination of Executive's employment during the term of
this Agreement or thereafter, whether by the Association or by Executive, shall
have no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to her termination of employment with the
Association (or for her entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if
the Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective
obligations of the Association under this Agreement shall terminate as of the
effective date of the order, but vested rights and obligations of the
Association and Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if
the Association is in default (within the meaning of section 3(x)(i) of the FDI
Act, 12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association
under this Agreement shall terminate as of the date of default, but vested
rights and obligations of the Association and Executive shall not be affected.
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(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or her designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or her designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred by Executive in
connection with or arising out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including her heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and her heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of her having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
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16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to be
executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ------------------------------- --------------------------------
Secretary
WITNESS:
/s/ Marcia R. Sund /s/ Rita Groton
- ------------------------------- --------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
--------------------------------
ATTEST:
/s/ Carol A. Patton
--------------------------------
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EXHIBIT 10.9
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and John Rudy, an individual residing at 1975
Parkside Circle South, Boca Raton, Florida 33486 ("Executive"). The term
"Association" refers to First Bank of Florida, the wholly-owned subsidiary of
the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. On May 20, 1998 and on each May
20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall be
extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding Company
and/or the Association, Executive shall perform such executive services for the
Holding Company and/or the Association as may be consistent with Executive's
title and may from time-to-time be assigned to Executive by the Holding
Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding Company
and/or the Association, the Executive shall devote such time and effort to the
affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding Company
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for Cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in a
Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Holding Company, plus
(B) the higher of the highest annual bonus or incentive payment earned by or
accrued in respect of Executive in respect of any of the one year immediately
preceding that in which the Date of Termination occurs or the highest annual
bonus or incentive payment so earned in respect of any of the three years
immediately preceding that in which the Change of Control of the Holding Company
occurs. Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding Company
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary termination of employment, other than a
Termination for Cause, the Holding Company shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such three year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's
termination of employment, a lump sum payment in an amount equal to the
excess, if any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Holding Company or the
Association, if Executive were 100% vested thereunder and had
continued working for the Holding Company or the Association
during the remaining term of this Agreement, 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 term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Holding Company or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Holding Company or the Association, any person whose actions
result in a Change of Control of the Holding Company or any
person affiliated with the Holding Company or the Association
or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Holding Company, an affiliate or a person making such payment
or providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall
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be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and
selected by the accounting firm which was, immediately prior
to the Change of Control of the Holding Company, the Holding
Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or
(ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section
280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions by reason of Section 280G of the
Code, in the opinion of Tax Counsel, and (iv) the value of any
noncash benefit or any deferred payment or benefit included in
the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Holding Company in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of section 280G of the Code, then Executive shall have
an obligation to pay the Holding Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under section 3 (b) hereof which
remain payable after the application of section 3 (e) hereof
are thereafter reduced pursuant thereto because of the receipt
by Executive of substantially similar benefits, the Holding
Company shall, at the time of such reduction, pay to Executive
the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the
amount of the subsequent reduction in such benefits, or (c)
the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ], 1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the
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Holding Company any obligation to employ or retain Executive in its employ for
any period, but any termination following a Change of Control shall be subject
to the terms and conditions hereof.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
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15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of his employment, in seeking to enforce
any of her rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this section shall be in addition to
all rights to which Executive is otherwise entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 30th day of June, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ------------------------- --------------------------------
Secretary
WITNESS:
/s/ Elaine P. Gerboc /s/ John Rudy
- ------------------------- --------------------------------
Executive
SEAL
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EXHIBIT 10.10
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and John Rudy, an individual residing at 1975 Parkside
Circle South, Boca Raton, Florida 33486 ("Executive"). The term "Holding
Company" refers to First Palm Beach Bancorp, Inc., the Association's parent, a
corporation organized under the laws of the State of Delaware, or any successor
thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on May 20, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. Prior to the first anniversary
date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during the
term of this Agreement and following a Change of Control of the Association (as
hereinafter defined), Executive shall: (a) devote his full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use his best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association (as
hereinafter defined) followed at any time during the term of this Agreement by
the involuntary termination of Executive's employment, other than a Termination
for Cause as defined in Section 2 (c) hereof, or by the voluntary termination of
Executive's employment for Good Reason (as hereinafter defined), the provisions
of section 3 shall apply. For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the Association to comply with any material provision of
this Agreement, which failure has not been cured within ten (10) days after
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notice of such noncompliance has been given by Executive to the Association; (B)
the assignment to Executive of any duties inconsistent with Executive's
positions, duties, responsibilities and status with the Association immediately
prior to the Change of Control of the Association, any removal of Executive
from, or any failure to re-elect Executive to, any of the positions previously
held by Executive, or a change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control of the
Association, a reduction by the Association in the Executive's annual salary as
in effect immediately prior to Change of Control of the Association, or as the
same may be increased from time-to-time, or the requirement that Executive be
relocated to an office which is more than 25 miles from the current principal
executive office of the Association, or the failure of the Association to
continue in effect any bonus, benefit or compensation plan, life insurance plan,
health or accident plan or disability plan in which Executive is participating
at the time of Change of Control of the Association, or the taking of any action
by the Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach
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of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
discharged for cause unless and until the following procedures shall have been
followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after Executive's receipt
of the Proposed Termination Notice ("Termination Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Association, plus (B)
the higher of the highest annual bonus or incentive payment earned by or accrued
in respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the one year immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for three years or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's beneficiaries by testate or intestate succession in the event of
Executive's death during the period during which such payments and benefits are
being provided.
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Executive's "qualifying event" for purposes of continuation coverage under the
Consolidated Budget Reconciliation Act ("COBRA") shall occur at the expiration
of such one year period.
(c) Upon the involuntary termination of Executive's employment with the
Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actu ally entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables pre scribed under section 415(b)(2)(E)(v) of the Internal
Revenue Code of 1986, as amended (the "Code") and a discount rate,
compounded monthly, equal to the annualized rate of interest prescribed
by the Pension Benefits Guaranty Corporation for the valuation of
immediate annuities payable under terminating single-employer defined
benefit plans for the month in which Executive's termination of
employment occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
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(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding
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Company and Executive dated as of June 30, 1997), except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to his termination of employment with the
Association (or for his entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective
obligations of the Association under this Agreement shall terminate as of the
effective date of the order, but vested rights and obligations of the
Association and Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if the
Association is in default (within the meaning of section 3(x)(i) of the FDI Act,
12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association under
this Agreement shall terminate as of the date of default, but vested rights and
obligations of the Association and Executive shall not be affected.
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(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or his designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, incurred by Executive in
connection with or aris ing out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
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16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to be
executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ---------------------------- --------------------------------
Secretary
WITNESS:
/s/ Elaine P. Gerboc /s/ John Rudy
- ---------------------------- --------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
--------------------------------
ATTEST:
/s/ Carol A. Patton
--------------------------------
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EXHIBIT 10.11
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and Linda Terrell, an individual residing at
824 Briarwood Drive, West Palm Beach, Florida 33415 ("Executive"). The term
"Association" refers to First Bank of Florida, the wholly-owned subsidiary of
the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. On May 20, 1998 and on each May
20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall be
extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding Company
and/or the Association, Executive shall perform such executive services for the
Holding Company and/or the Association as may be consistent with Executive's
title and may from time-to-time be assigned to Executive by the Holding
Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding Company
and/or the Association, the Executive shall devote such time and effort to the
affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding Company
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for Cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on her
own behalf, or through a representative, who may be her legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in a
Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to three (3) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Holding Company, plus
(B) the higher of the highest annual bonus or incentive payment earned by or
accrued in respect of Executive in respect of any of the one year immediately
preceding that in which the Date of Termination occurs or the highest annual
bonus or incentive payment so earned in respect of any of the three years
immediately preceding that in which the Change of Control of the Holding Company
occurs. Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding Company
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary termination of employment, other than a
Termination for Cause, the Holding Company shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such three year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's
termination of employment, a lump sum payment in an amount equal to the
excess, if any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Holding Company or the
Association, if Executive were 100% vested thereunder and had
continued working for the Holding Company or the Association
during the remaining term of this Agreement, 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 term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Holding Company or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Holding Company or the Association, any person whose actions
result in a Change of Control of the Holding Company or any
person affiliated with the Holding Company or the Association
or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Holding Company, an affiliate or a person making such payment
or providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall
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be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and
selected by the accounting firm which was, immediately prior
to the Change of Control of the Holding Company, the Holding
Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or
(ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section
280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions by reason of Section 280G of the
Code, in the opinion of Tax Counsel, and (iv) the value of any
noncash benefit or any deferred payment or benefit included in
the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Holding Company in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of section 280G of the Code, then Executive shall have
an obligation to pay the Holding Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under section 3 (b) hereof which
remain payable after the application of section 3 (e) hereof
are thereafter reduced pursuant thereto because of the receipt
by Executive of substantially similar benefits, the Holding
Company shall, at the time of such reduction, pay to Executive
the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the
amount of the subsequent reduction in such benefits, or (c)
the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ],1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the
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Holding Company any obligation to employ or retain Executive in its employ for
any period, but any termination following a Change of Control shall be subject
to the terms and conditions hereof.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
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15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of her employment, in seeking to enforce
any of her rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this section shall be in addition to
all rights to which Executive is otherwise entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including her heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and her heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of her having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ---------------------------- ----------------------------------
Secretary
WITNESS:
/s/ Barbara A. Todd /s/ Linda O. Terrell
- ---------------------------- ----------------------------------
Executive
SEAL
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EXHIBIT 10.12
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and Linda Terrell, an individual residing at 824 Briarwood
Drive, West Palm Beach, Florida 33415 ("Executive"). The term "Holding Company"
refers to First Palm Beach Bancorp, Inc., the Association's parent, a
corporation organized under the laws of the State of Delaware, or any successor
thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on May 20, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. Prior to the first anniversary
date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during the
term of this Agreement and following a Change of Control of the Association (as
hereinafter defined), Executive shall: (a) devote her full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use her best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association (as
hereinafter defined) followed at any time during the term of this Agreement by
the involuntary termination of Executive's employment, other than a Termination
for Cause as defined in Section 2 (c) hereof, or by the voluntary termination of
Executive's employment for Good Reason (as hereinafter defined), the provisions
of section 3 shall apply. For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the Association to comply with any material provision of
this Agreement, which failure has not been cured within ten (10) days after
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notice of such noncompliance has been given by Executive to the Association; (B)
the assignment to Executive of any duties inconsistent with Executive's
positions, duties, responsibilities and status with the Association immediately
prior to the Change of Control of the Association, any removal of Executive
from, or any failure to re-elect Executive to, any of the positions previously
held by Executive, or a change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control of the
Association, a reduction by the Association in the Executive's annual salary as
in effect immediately prior to Change of Control of the Association, or as the
same may be increased from time-to-time, or the requirement that Executive be
relocated to an office which is more than 25 miles from the current principal
executive office of the Association, or the failure of the Association to
continue in effect any bonus, benefit or compensation plan, life insurance plan,
health or accident plan or disability plan in which Executive is participating
at the time of Change of Control of the Association, or the taking of any action
by the Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach
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of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
PROVIDED, HOWEVER, that Executive shall not be deemed to have been discharged
for cause unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on her
own behalf, or through a representative, who may be her legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after Executive's receipt
of the Proposed Termination Notice ("Termination Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to three (3) time the sum of (A) the higher of Executive's base salary in effect
immediately prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based and Executive's annual base salary in effect
immediately prior to the Change of Control of the Association, plus (B) the
higher of the highest annual bonus or incentive payment earned by or accrued in
respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the three years immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for three years or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's beneficiaries by testate or intestate succession in the event of
Executive's death during the period during which such payments and benefits are
being provided.
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Executive's "qualifying event" for purposes of continuation coverage under the
Consolidated Budget Reconciliation Act ("COBRA") shall occur at the expiration
of such one year period.
(c) Upon the involuntary termination of Executive's employment with the
Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actually entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables prescribed under section 415(b)(2)(E)(v) of the Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits Guaranty Corporation for the valuation of immediate
annuities payable under terminating single-employer defined benefit
plans for the month in which Executive's termination of employment
occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
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(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding
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Company and Executive dated as of June 30, 1997), except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to her termination of employment with the
Association (or for her entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective
obligations of the Association under this Agreement shall terminate as of the
effective date of the order, but vested rights and obligations of the
Association and Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if the
Association is in default (within the meaning of section 3(x)(i) of the FDI Act,
12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association under
this Agreement shall terminate as of the date of default, but vested rights and
obligations of the Association and Executive shall not be affected.
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(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or her designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or her designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred by Executive in
connection with or arising out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including her heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and her heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of her having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
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16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to be
executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ----------------------------- -------------------------------
Secretary
WITNESS:
/s/ Barbara A. Todd /s/ Linda O. Terrell
- ----------------------------- -------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
-------------------------------
ATTEST:
/s/ Carol A. Patton
-------------------------------
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EXHIBIT 10.13
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of June 30, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and Calvin L. Cearley, an individual residing
at 1384 Northampton Terrace, West Palm Beach, Florida 33414 ("Executive"). The
term "Association" refers to First Bank of Florida, the wholly-owned subsidiary
of the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. On May 20, 1998 and on each May
20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall be
extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding Company
and/or the Association, Executive shall perform such executive services for the
Holding Company and/or the Association as may be consistent with Executive's
title and may from time-to-time be assigned to Executive by the Holding
Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding Company
and/or the Association, the Executive shall devote such time and effort to the
affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding Company
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for Cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in a
Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to one time the sum of (A) the higher of Executive's base salary in effect
immediately prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based and Executive's annual base salary in effect
immediately prior to the Change of Control of the Holding Company, plus (B) the
higher of the highest annual bonus or incentive payment earned by or accrued in
respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the one year immediately
preceding that in which the Change of Control of the Holding Company occurs.
Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding Company
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary termination of employment, other than a
Termination for Cause, the Holding Company shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such one year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's
termination of employment, a lump sum payment in an amount equal to the
excess, if any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Holding Company or the
Association, if Executive were 100% vested thereunder and had
continued working for the Holding Company or the Association
during the remaining term of this Agreement, 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 term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Holding Company or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Holding Company or the Association, any person whose actions
result in a Change of Control of the Holding Company or any
person affiliated with the Holding Company or the Association
or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Holding Company, an affiliate or a person making such payment
or providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall
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be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and
selected by the accounting firm which was, immediately prior
to the Change of Control of the Holding Company, the Holding
Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or
(ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section
280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions by reason of Section 280G of the
Code, in the opinion of Tax Counsel, and (iv) the value of any
noncash benefit or any deferred payment or benefit included in
the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Holding Company in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of section 280G of the Code, then Executive shall have
an obligation to pay the Holding Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under section 3 (b) hereof which
remain payable after the application of section 3 (e) hereof
are thereafter reduced pursuant thereto because of the receipt
by Executive of substantially similar benefits, the Holding
Company shall, at the time of such reduction, pay to Executive
the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the
amount of the subsequent reduction in such benefits, or (c)
the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ],1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the
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Holding Company any obligation to employ or retain Executive in its employ for
any period, but any termination following a Change of Control shall be subject
to the terms and conditions hereof.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
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15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of his employment, in seeking to enforce
any of her rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this section shall be in addition to
all rights to which Executive is otherwise entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 30th day of June, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ Elizabeth Cook By: /s/ Louis O. Davis, Jr.
- ----------------------------- -----------------------------
Assistant Secretary
WITNESS:
/s/ Karen Good /s/ Calvin Cearley
- ----------------------------- -----------------------------
Executive
SEAL
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RIDER TO FIRST PALM BEACH BANCORP, INC.
CHANGE IN CONTROL AGREEMENT
This Rider, effective as of June 30, 1997, amends that certain First Palm Beach
Bancorp, Inc. Change in Control Agreement dated as of June 30, 1997 (the "Change
in Control Agreement") by and between First Palm Beach Bancorp, Inc. (the
"Holding Company") and Calvin L. Cearley ("Executive").
In consideration of the covenants and agreements herein set forth, the parties
hereto agree as follows:
1. The term of this Rider shall commence on June 30, 1997 and shall terminate on
January 1, 1998, provided that Executive's employment shall not therefore have
been terminated for good reason or other than in a Termination for Cause
following a Change in Control (as defined in the Change in Control Agreement),
in which event this Rider shall remain in effect until all obligations have been
performed.
2. During the term of this Rider, paragraph 3(d) of the Change in Control
Agreement shall be of no force and effect, and the following shall be
substituted therefor:
"To the extent that the Termination Benefits to be made or afforded to
Executive constitute "excess parachute payments" subject to the excise
tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, Executive shall be entitled to an additional payment
sufficient to restore Executive to the same after-tax position
Executive would have had if the excise tax had not been imposed."
3. This Rider shall terminate and be of no further force and effect on January
1, 1998. At such time as this Rider terminates, paragraph 3(d) of the Change in
Control Agreement shall become and shall be effective for the remainder of the
term (including the initial and successive terms) of the Change in Control
Agreement.
4. All other terms and conditions of the Change in Control Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has executed this
Agreement, as of the day and year first above written.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ Elizabeth Cook By: /s/ Louis O. Davis, Jr.
- --------------------------- ----------------------------
Assistant Secretary
WITNESS
/s/ Karen Good /s/ Calvin Cearley
- --------------------------- ---------------------------
Executive
SEAL
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<PAGE> 1
EXHIBIT 10.14
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of June 30, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and Calvin L. Cearley, an individual residing at 1381
Northampton Terrace, West Palm Beach, Florida 33414 ("Executive"). The term
"Holding Company" refers to First Palm Beach Bancorp, Inc., the Association's
parent, a corporation organized under the laws of the State of Delaware, or any
successor thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. Prior to the first anniversary
date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during the
term of this Agreement and following a Change of Control of the Association (as
hereinafter defined), Executive shall: (a) devote his full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use his best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association (as
hereinafter defined) followed at any time during the term of this Agreement by
the involuntary termination of Executive's employment, other than a Termination
for Cause as defined in Section 2 (c) hereof, or by the voluntary termination of
Executive's employment for Good Reason (as hereinafter defined), the provisions
of section 3 shall apply. For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the Association to comply with any material provision of
this Agreement, which failure has not been cured within ten (10) days after
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notice of such noncompliance has been given by Executive to the Association; (B)
the assignment to Executive of any duties inconsistent with Executive's
positions, duties, responsibilities and status with the Association immediately
prior to the Change of Control of the Association, any removal of Executive
from, or any failure to re-elect Executive to, any of the positions previously
held by Executive, or a change in the Executive's reporting responsibilities,
titles or offices as in effect immediately prior to the Change of Control of the
Association, a reduction by the Association in the Executive's annual salary as
in effect immediately prior to Change of Control of the Association, or as the
same may be increased from time-to-time, or the requirement that Executive be
relocated to an office which is more than 25 miles from the current principal
executive office of the Association, or the failure of the Association to
continue in effect any bonus, benefit or compensation plan, life insurance plan,
health or accident plan or disability plan in which Executive is participating
at the time of Change of Control of the Association, or the taking of any action
by the Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach
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of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
PROVIDED, HOWEVER, that Executive shall not be deemed to have been discharged
for cause unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on his
own behalf, or through a representative, who may be his legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after Executive's receipt
of the Proposed Termination Notice ("Termination Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to one (1) time the sum of (A) the higher of Executive's base salary in effect
immediately prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based and Executive's annual base salary in effect
immediately prior to the Change of Control of the Association, plus (B) the
higher of the highest annual bonus or incentive payment earned by or accrued in
respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the one year immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for one year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's beneficiaries by testate or intestate succession in the event of
Executive's death during the period during which such payments and benefits are
being provided.
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Executive's "qualifying event" for purposes of continuation coverage under the
Consolidated Budget Reconciliation Act ("COBRA") shall occur at the expiration
of such one year period.
(c) Upon the involuntary termination of Executive's employment with the
Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actu ally entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables pre scribed under section 415(b)(2)(E)(v) of the Internal
Revenue Code of 1986, as amended (the "Code") and a discount rate,
compounded monthly, equal to the annualized rate of interest prescribed
by the Pension Benefits Guaranty Corporation for the valuation of
immediate annuities payable under terminating single-employer defined
benefit plans for the month in which Executive's termination of
employment occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
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(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
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6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of June 30, 1997), except
that this Agreement shall not affect or operate to reduce any benefit or
compensation inuring to Executive of a kind elsewhere provided. No provision of
this Agreement shall be interpreted to mean that Executive is subject to
receiving fewer benefits than those available to him without reference to this
Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to his termination of employment with the
Association (or for his entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI
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Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective obligations of the
Association under this Agreement shall terminate as of the effective date of the
order, but vested rights and obligations of the Association and Executive shall
not be affected.
(e) Notwithstanding anything herein contained to the contrary, if the
Association is in default (within the meaning of section 3(x)(i) of the FDI Act,
12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association under
this Agreement shall terminate as of the date of default, but vested rights and
obligations of the Association and Executive shall not be affected.
(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or his designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, incurred by Executive in
connection with or aris ing out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including his heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
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15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, his legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 30th day of June, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ Elizabeth Cook By: /s/ Louis O. Davis, Jr.
- ------------------------------- --------------------------------
Assistant Secretary
WITNESS:
/s/ Karen Good /s/ Calvin Cearley
- ------------------------------- --------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
--------------------------------
ATTEST:
/s/ John C. Trammel
--------------------------------
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EXHIBIT 10.15
FIRST PALM BEACH BANCORP, INC.
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation organized
under the laws of the State of Delaware, with its office at 450 S. Australian
Avenue, West Palm Beach, Florida and Alissa Ballot, an individual residing at
8813 Thames River Drive, Boca Raton, Florida 33433 ("Executive"). The term
"Association" refers to First Bank of Florida, the wholly-owned subsidiary of
the Holding Company.
WHEREAS, the Holding Company considers it essential to the best
interest of its stockholders to foster the continued employment of both its key
management personnel and the key management personnel of the Association; and
WHEREAS, the Board of Directors of the Holding Company recognizes that,
as is the case with many publicly-held corporations, the possibility of a Change
of Control of the Holding Company exists and that such possibility, and the
uncertainty and questions which it may raise among management of both the
Holding Company and the Association, may result in the departure or distraction
of management personnel to the detriment of the Holding Company and its
stockholders; and
WHEREAS, the Board of Directors of the Holding Company has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Holding Company's and the
Association's management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Holding Company;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on June 30, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. On May 20, 1998 and on each May
20 thereafter ("Annual Anniversary Date"), the term of this Agreement shall be
extended automatically for an additional year, unless either the Board of
Directors of the Holding Company or Executive gives contrary written notice to
the other not less than 60 days in advance of such anniversary date. References
herein to the term of this Agreement shall refer both to the initial term and to
successive terms.
(b) During the term of Executive's employment with the Holding Company
and/or the Association, Executive shall perform such executive services for the
Holding Company and/or the Association as may be consistent with Executive's
title and may from time-to-time be assigned to Executive by the Holding
Company's or the Association's Board of Directors.
(c) During the term of Executive's employment with the Holding Company
and/or the Association, the Executive shall devote such time and effort to the
affairs and business of the Holding Company and/or the Association as the
Executive has customarily provided prior to the date hereof.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Holding Company
(as hereinafter defined) followed at any time during the term of this Agreement
by the involuntary termination of Executive's employment other than a
Termination for Cause as defined in section 2 (c) hereof, or the voluntary
termination of Executive's employment for Good Reason (as hereinafter defined),
the provisions of section 3 shall apply. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Holding Company to comply with any
material provision of this Agreement, which failure has not been cured within
ten (10) days after notice of such noncompliance has been given by Executive to
the Holding Company; (B) the assignment to Executive of any duties inconsistent
with Executive's positions, duties, responsibilities and status with the Holding
Company and/or the Association immediately prior to the Change of Control of the
Holding Company, any removal of Executive from, or any failure to re-elect
Executive to, any of the positions previously held by Executive, or a change in
the Executive's reporting responsibilities, titles or offices as in effect
immediately prior to the Change of Control of the Holding Company, a reduction
by the Holding Company in the Executive's annual salary as in effect immediately
prior to Change of Control of the Holding Company, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current
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principal executive office of the Holding Company, or the failure of the Holding
Company and/or the Association to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health or accident plan or disability
plan in which Executive is participating at the time of Change of Control of the
Holding Company, or the taking of any action by the Holding Company which would
adversely affect Executive's participation in or materially reduce Executive's
benefits under any of such plans; or (c) any purported termination of
Executive's employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 4 hereof (and for purposes of this
Agreement, no such purported termination shall be effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Holding Company shall be (i) an event of a nature that results in a Change of
Control of the Association or the Holding Company within the meaning of the Home
Owners' Loan Act of 1933 and the Rules and Regulations promulgated by the Office
of Thrift Supervision (or its predecessor agency), as in effect on the date
hereof (provided that in applying the definition of a Change of Control as set
forth under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Holding Company or any person who on the date
hereof is a director or officer of the Holding Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Holding Company (not including any securities
acquired directly from the Holding Company or its affiliates other than in
connection with the acquisition by the Holding Company or its affiliates of a
business) representing 20% or more of the combined voting power in the election
of directors of the Holding Company's then outstanding securities, (B) during
any period of not more than two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Holding
Company together with any new director (other than a director whose initial
assumption of office is in connection with any actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Holding Company) whose appointment or election by
the Board of Directors of the Holding Company or nomination for election by the
Holding Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended, cease for any reason to constitute at
least a majority thereof, (c) the stockholders of the Holding Company approve a
merger or consolidation of the Holding Company or the Association with any other
corporation, other than (i) a merger or consolidation which would result in the
voting securities of the Holding Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or any
parent thereof) at least 60% of the combined voting power in the election of
directors of the securities of the Holding Company or such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (ii) a merger or consolidation effected to implement a recapitalization of
the Holding Company (or similar transaction) in which no "person" is or becomes
the "beneficial owner," directly or indirectly, of securities of the Holding
Company (not including in the securities "beneficially owned" by such "person"
any securities acquired directly from the Holding Company or its affiliates
other than in connection with the acquisition by the Holding Company or its
affiliates of a business) representing 20% or more of the combined voting power
in the election of directors of the Holding Company's then outstanding
securities; or (i) the stockholders of the Holding Company approve a plan of
complete liquidation or dissolution of the Holding Company or an agreement for
the sale or disposition by the Holding Company of all or substantially all of
the Holding Company's assets, other than a sale or disposition by the Holding
Company of all or substantially all of the Holding Company's assets to an entity
which assumes the obligations set forth in this Agreement, and at least 60% of
the combined voting power in the election of directors of the voting securities
of which are owned by stockholders of the Holding Company in substantially the
same proportions as their ownership of the Holding Company immediately prior to
such sale.
A Change of Control of the Holding Company shall also include any event
described in this section 2 (b) if the term "Association" were substituted for
the term "Holding Company" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to Section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order, or any
material breach of this Agreement, in each case as measured against standards
generally prevailing at the relevant time in the savings and community banking
industry; PROVIDED, HOWEVER, that Executive shall not be deemed to have been
Terminated for Cause unless and until the following procedures shall have been
followed:
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(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's Termination for Cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days, after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on her
own behalf, or through a representative, who may be her legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after the Executive's
receipt of the Proposed Termination Notice ("Termination Hearings");
and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to the Executive written notice of termination,
which notice shall include a copy of the Termination Resolution and
specify an effective date of termination that is not later than the
date on which such notice is given.
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Holding Company. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Holding Company
shall be conclusively presumed to be done, or omitted to be done, by Executive
in good faith and in the best interests of the Holding Company.
3. TERMINATION BENEFITS
(a) If Executive is terminated by the Holding Company other than in a
Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Holding Company as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Holding Company shall pay as severance to Executive an amount
equal to two (2) times the sum of (A) the higher of Executive's base salary in
effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based and Executive's annual base salary in
effect immediately prior to the Change of Control of the Holding Company, plus
(B) the higher of the highest annual bonus or incentive payment earned by or
accrued in respect of Executive in respect of any of the one year immediately
preceding that in which the Date of Termination occurs or the highest annual
bonus or incentive payment so earned in respect of any of the two years
immediately preceding that in which the Change of Control of the Holding Company
occurs. Such payment shall be made in a lump sum within five days of the date of
termination of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Holding Company
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary termination of employment, other than a
Termination for Cause, the Holding Company shall, for two year or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Holding Company or Association for
which executive officers are eligible, to the same extent as if Executive had
continued to be an employee of the Holding Company or Association during such
period and such benefits shall, to the extent not paid under any such plan or
program, be paid by the Holding Company. The payments and benefits described in
the preceding sentence shall be paid to Executive's beneficiaries by testate or
intestate succession in the event of Executive's death during the period during
which such payments and benefits are being provided. Executive's "qualifying
event" for purposes of continuation coverage under the Consolidated Budget
Reconciliation Act ("COBRA") shall occur at the expiration of such two year
period.
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(c) Upon the termination of Executive's employment other than a
Termination for Cause, or if Executive terminates employment for Good Reason, in
either case after a Change of Control of the Holding Company occurs, the Holding
Company shall pay and provide to Executive (or, in the event of the Executive's
death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Holding Company's or Association's officers and employees;
(iii) within thirty (30) days following Executive's
termination of employment, a lump sum payment in an amount equal to the
excess, if any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Holding Company or the
Association, if Executive were 100% vested thereunder and had
continued working for the Holding Company or the Association
during the remaining term of this Agreement, 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 term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive 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 Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits 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");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Holding Company, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Holding Company or the termination of the
Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Holding Company or the Association, any person whose actions
result in a Change of Control of the Holding Company or any
person affiliated with the Holding Company or the Association
or such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Holding Company, an affiliate or a person making such payment
or providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall
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be taken into account which, in the opinion of tax counsel
("Tax Counsel") reasonably acceptable to Executive and
selected by the accounting firm which was, immediately prior
to the Change of Control of the Holding Company, the Holding
Company's independent auditor (the "Auditor"), does not
constitute a "parachute payment" within the meaning of Section
280G(b) (2) of the Code, including by reason of Section
280G(b) (4) (A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the
Total Payments (other than those referred to in clauses (i) or
(ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of Section
280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions by reason of Section 280G of the
Code, in the opinion of Tax Counsel, and (iv) the value of any
noncash benefit or any deferred payment or benefit included in
the Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Holding Company in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of section 280G of the Code, then Executive shall have
an obligation to pay the Holding Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under section 3 (b) hereof which
remain payable after the application of section 3 (e) hereof
are thereafter reduced pursuant thereto because of the receipt
by Executive of substantially similar benefits, the Holding
Company shall, at the time of such reduction, pay to Executive
the lowest of (a) the amount of the decrease made in the
Severance Payments pursuant to section 3 (e) hereof, (b) the
amount of the subsequent reduction in such benefits, or (c)
the maximum amount which can be paid to Executive without
being, or causing any other payment to be, nondeductible by
reason of section 280G of the Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Holding Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto. Said Notice of Termination shall be provided to Executive not less than
thirty (30) days prior to Executive's Date of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated written notice which
shall (i) indicate the specific termination provision in this Agreement relied
upon; (ii) set forth in detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) specify a date of termination, which shall be not less than
thirty (30) days nor more than ninety (90) days after such Notice of Termination
is given, except in the case of a Termination for Cause, in which case the
Notice of Termination may specify a date of termination as of the date of such
Notice of Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. GUARANTEE
The Holding Company hereby irrevocably and unconditionally guarantees
to Executive the payment of all amounts, and the performance of all other
obligations, due from the Association pursuant to that certain Change of Control
Agreement of even date herewith between the Association and Executive as and
when due without any requirement of presentment, demand of payment, protest or
notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive (including without limitation that certain Change of Control Agreement
between the Holding Company and Executive dated as of [ ],1997), except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
Nothing in this Agreement shall confer upon the Executive the right to continue
in the employ of the Holding Company or shall impose on the
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Holding Company any obligation to employ or retain Executive in its employ for
any period, but any termination following a Change of Control shall be subject
to the terms and conditions hereof.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT
In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in section 9 of that certain Change of Control Agreement between Executive and
the Association dated May 20, 1997 (the "Association Agreement") during the term
of this Agreement and a Change of Control, as defined herein, occurs, the
Holding Company will assume the obligation to pay and Executive will be entitled
to receive all of the termination benefits provided for under section 3 of the
Association Agreement upon the notification of the Holding Company of the
Association's receipt of a dismissal of charges in such notice.
10. REQUIRED REGULATORY PROVISION
Notwithstanding anything herein contained to the contrary, any payments
made to Executive by the Holding Company pursuant to this Agreement, or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C.
ss.1828(k).
11. NON-DUPLICATION
Any compensation or benefits provided to Executive pursuant to the
Association Agreement shall be applied to offset the obligations of the Holding
Company hereunder, it being intended that this Agreement set forth the aggregate
compensation and benefits payable to Executive for all services to the Holding
Company and all of its direct or indirect subsidiaries.
12. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
13. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
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14. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
15. PAYMENT OF COSTS AND LEGAL FEES
Following a Change of Control of the Holding Company, Executive shall
be entitled to reimbursement for all reasonable costs, including attorney's
fees, in challenging any termination of her employment, in seeking to enforce
any of her rights hereunder, or in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder, provided that Executive shall not be
entitled to such reimbursement if the Holding Company proves, by clear and
convincing evidence, that Executive proceeded in such action in bad faith.
Executive shall also be entitled to post-judgment interest at the then-current
prime rate charged by Citibank, NA or any successor thereto, on any money
judgment obtained. Amounts paid pursuant to this section shall be in addition to
all rights to which Executive is otherwise entitled under this Agreement.
16. INDEMNIFICATION
The Holding Company shall provide Executive (including her heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, or in lieu thereof, shall
indemnify Executive (and her heirs, executors and administrators) to the fullest
extent permitted under Delaware law and as provided in the Holding Company's
Certificate of Incorporation against all expenses and liabilities reasonably
incurred by Executive in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of her having been a director
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include, but not be limited to, judgments, court costs and
attorneys' fees and the cost of reasonable settlements.
17. SUCCESSOR AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees and
the Holding Company and its 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
Holding Company may be sold or otherwise transferred.
18. SUCCESSOR TO THE HOLDING COMPANY
The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ----------------------------- -----------------------------------
Secretary
WITNESS:
/s/ Rita Groton /s/ Alissa Ballot
- ----------------------------- ------------------------------------
Executive
SEAL
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RIDER TO FIRST PALM BEACH BANCORP, INC.
CHANGE IN CONTROL AGREEMENT
This Rider, effective as of May 20, 1997, amends that certain First Palm Beach
Bancorp, Inc. Change in Control Agreement dated as of May 20, 1997 (the "Change
in Control Agreement") by and between First Palm Beach Bancorp, Inc. (the
"Holding Company") and Alissa E. Ballot ("Executive").
In consideration of the covenants and agreements herein set forth, the parties
hereto agree as follows:
1. The term of this Rider shall commence on May 20, 1997 and shall terminate on
January 1, 1998, provided that Executive's employment shall not therefore have
been terminated for good reason or other than in a Termination for Cause
following a Change in Control (as defined in the Change in Control Agreement),
in which event this Rider shall remain in effect until all obligations have been
performed.
2. During the term of this Rider, paragraph 3(d) of the Change in Control
Agreement shall be of no force and effect, and the following shall be
substituted therefor:
"To the extent that the Termination Benefits to be made or afforded to
Executive constitute "excess parachute payments" subject to the excise
tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, Executive shall be entitled to an additional payment
sufficient to restore Executive to the same after-tax position
Executive would have had if the excise tax had not been imposed."
3. This Rider shall terminate and be of no further force and effect on January
1, 1998. At such time as this Rider terminates, paragraph 3(d) of the Change in
Control Agreement shall become and shall be effective for the remainder of the
term (including the initial and successive terms) of the Change in Control
Agreement.
4. All other terms and conditions of the Change in Control Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this Agreement to
be executed by its duly authorized officer, and Executive has executed this
Agreement, as of the day and year first above written.
ATTEST: FIRST PALM BEACH BANCORP, INC.
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- --------------------------- -------------------------------------
Secretary
WITNESS
/s/ Rita Groton /s/ Alissa Ballot
- --------------------------- -------------------------------------
Executive
SEAL
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EXHIBIT 10.16
FIRST BANK OF FLORIDA
CHANGE OF CONTROL AGREEMENT
This AGREEMENT is made effective as of May 20, 1997, by and between
First Bank of Florida (the "Association"), a federally chartered savings
institution, with its administrative office at 450 S. Australian Avenue, West
Palm Beach, Florida and Alissa Ballot, an individual residing at 8813 Tames
River Drive, Boca Raton, Florida 33433 (Executive"). The term "Holding Company"
refers to First Palm Beach Bancorp, Inc., the Association's parent, a
corporation organized under the laws of the State of Delaware, or any successor
thereto.
WHEREAS, the Association considers it essential to the best interest of
its stockholder to foster the continued employment of its key management
personnel; and
WHEREAS, the Board of Directors of the Association recognizes that, as
is the case with subsidiaries of many publicly-held corporations, the
possibility of a Change of Control of the Holding Company or the Association
exists and that such possibility, and the uncertainty and questions which it may
raise among management of both the Holding Company and the Association, may
result in the departure or distraction of management personnel to the detriment
of the Association and its stockholder; and
WHEREAS, the Board of Directors of the Association has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Association's management, including
Executive, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control of the Holding Company or the Association;
NOW THEREFORE, in consideration of the mutual covenants, terms and
conditions herein set forth, the parties hereto agree as follows:
1. TERM OF AGREEMENT
(a) The initial term of this Agreement shall commence on May 20, 1997
and shall terminate on May 19, 2000, unless further extended in accordance with
the terms and conditions hereinafter set forth. Prior to the first anniversary
date of this Agreement and on each anniversary date thereafter (each an
"Anniversary Date"), the Board of Directors of the Association (the "Board")
shall review the terms of this Agreement and Executive's performance of services
hereunder and may, in the absence of objection from Executive, approve an
extension of this Agreement. In such event, this Agreement shall be extended to
the third anniversary of the relevant Anniversary Date.
(b) Notwithstanding anything herein contained to the contrary, the
Executive's employment with the Association may be terminated at any time;
provided, however, that the relative rights and obligations of the Association
and Executive in the event of any such termination shall be determined under
this Agreement.
(c) During the period of Executive's employment that falls during the
term of this Agreement and following a Change of Control of the Association (as
hereinafter defined), Executive shall: (a) devote her full business time and
attention (other than during holidays, vacation periods, and periods of illness,
disability or approved leave of absence) to the business and affairs of the
Association and use her best efforts to advance the Association's interests; (b)
serve in the position to which Executive is appointed by the Association, which
shall be the position that Executive held on the day before the Change of
Control of the Association occurred or any higher office at the Association to
which she may subsequently be appointed; and (c) subject to the direction of the
Board and the By-laws of the Association, have such functions, duties,
responsibilities and authority commonly associated with such position.
2. PAYMENTS TO EXECUTIVE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control of the Association (as
hereinafter defined) followed at any time during the term of this Agreement by
the involuntary termination of Executive's employment, other than a Termination
for Cause as defined in Section 2 (c) hereof, or by the voluntary termination of
Executive's employment for Good Reason (as hereinafter defined), the provisions
of section 3 shall apply. For purposes of this Agreement, "Good Reason" shall
mean (A) a failure by the
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Association to comply with any material provision of this Agreement, which
failure has not been cured within ten (10) days after notice of such
noncompliance has been given by Executive to the Association; (B) the assignment
to Executive of any duties inconsistent with Executive's positions, duties,
responsibilities and status with the Association immediately prior to the Change
of Control of the Association, any removal of Executive from, or any failure to
re-elect Executive to, any of the positions previously held by Executive, or a
change in the Executive's reporting responsibilities, titles or offices as in
effect immediately prior to the Change of Control of the Association, a
reduction by the Association in the Executive's annual salary as in effect
immediately prior to Change of Control of the Association, or as the same may be
increased from time-to-time, or the requirement that Executive be relocated to
an office which is more than 25 miles from the current principal executive
office of the Association, or the failure of the Association to continue in
effect any bonus, benefit or compensation plan, life insurance plan, health or
accident plan or disability plan in which Executive is participating at the time
of Change of Control of the Association, or the taking of any action by the
Association which would adversely affect Executive's participation in or
materially reduce Executive's benefits under any of such plans; or (C) any
purported termination of Executive's employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph 4 hereof
(and for purposes of this Agreement, no such purported termination shall be
effective).
(b) For the purposes of this Agreement, a "Change of Control" of the
Association shall be (i) an event of a nature that results in a Change of
Control of the Association within the meaning of the Home Owners' Loan Act of
1933 and the Rules and Regulations promulgated by the Office of Thrift
Supervision (or its predecessor agency), as in effect on the date hereof
(provided that in applying the definition of a Change of Control as set forth
under the Rules and Regulations of the OTS, the Board of Directors shall
substitute its judgment for that of the OTS), or (ii) a Change of Control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), without regard to whether or not such
regulation actually applies; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act in effect on the date first
above written), other than the Association or any person who on the date hereof
is a director or officer of the Association, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Association (not including any securities acquired directly
from the Association or its affiliates other than in connection with the
acquisition by the Association or its affiliates of a business) representing 20%
or more of the combined voting power in the election of directors of the
Association's then outstanding securities, (B) during any period of not more
than two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Association together with any new
director (other than a director whose initial assumption of office is in
connection with any actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Association) whose appointment or election by the Board of Directors of the
Association or nomination for election by the Association's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof, (C)
the stockholders of the Holding Company or the Association approve a merger or
consolidation of the Association with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Association outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power in the election of directors of the securities
of the Association or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Association (or
similar transaction) in which no "person" is or becomes the "beneficial owner,"
directly or indirectly, of securities of the Association (not including in the
securities "beneficially owned" by such "person" any securities acquired
directly from the Association or its affiliates other than in connection with
the acquisition by the Association or its affiliates of a business) representing
20% or more of the combined voting power in the election of directors of the
Association's then outstanding securities; or (D) the stockholders of the
Association approve a plan of complete liquidation or dissolution of the
Association or an agreement for the sale or disposition by the Association of
all or substantially all of the Association's assets, other than a sale or
disposition by the Holding Company of all or substantially all of the
Association's assets to an entity which assumes the obligations set forth in
this Agreement, and at least 60% of the combined voting power in the election of
directors of the voting securities of which are owned by stockholders of the
Association in substantially the same proportions as their ownership of the
Association immediately prior to such sale.
A Change of Control of the Association shall also include any event described in
this section 2 (b) if the term "Holding Company" were substituted for the term
"Association" each time it appears herein.
(c) The Executive shall not have the right to receive termination
benefits pursuant to section 3 hereof upon Termination for Cause. "Termination
for Cause" for purposes of this Agreement shall mean personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation
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of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order, or any material breach of this
Agreement, in each case as measured against standards generally prevailing at
the relevant time in the savings and community banking industry; PROVIDED,
HOWEVER, that Executive shall not be deemed to have been discharged for cause
unless and until the following procedures shall have been followed:
(i) the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose calling for Executive's termination for cause
and setting forth the purported grounds for such termination ("Proposed
Termination Resolution");
(ii) as soon as practicable, and in any event within five (5)
days after adoption of such resolution, the Board shall furnish to
Executive a written notice of termination which shall be accompanied by
a certified copy of the Proposed Termination Resolution ("Notice of
Proposed Termination");
(iii) Executive shall be afforded a reasonable opportunity to
make oral and written presentations to the members of the Board, on her
own behalf, or through a representative, who may be her legal counsel,
to refute the grounds set forth in the Proposed Termination Resolution
at one or more meetings of the Board to be held no sooner than fifteen
(15) days and no later than thirty (30) days after Executive's receipt
of the Proposed Termination Notice ("Termination Hearings"); and
(iv) within ten (10) days following the end of the Termination
Hearings, the Board shall adopt a resolution duly approved by
affirmative vote of a majority of the entire Board at a meeting called
and held for such purpose (A) finding that in the good faith opinion of
the Board the grounds for termination set forth in the Proposed
Termination Resolution exist and (B) terminating Executive's employment
("Termination Resolution"); and
(v) as promptly as practicable, and in any event within one
(1) business day after adoption of the Termination Resolution, the
Board shall furnish to Executive written notice of termination, which
notice shall include a copy of the Termination Resolution and specify
an effective date of termination that is not later than the date on
which such notice is given;
(d) For purposes of section 2(c), no act or failure to act on the part
of Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Association. Any act, or
failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or based upon the written advice of counsel for the Association
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Association.
3. TERMINATION BENEFITS
(a) If Executive's employment is terminated by the Association other
than in a Termination for Cause pursuant to paragraph 2 (c) hereof, or Executive
terminates employment for Good Reason, in either case after a Change of Control
of the Association as defined in paragraph 2(b) hereof, then in lieu of any
further salary payments to Executive for periods subsequent to the date of
termination, the Association shall pay as severance to Executive an amount equal
to two (2) time the sum of (A) the higher of Executive's base salary in effect
immediately prior to the occurrence of the event or circumstance upon which the
Notice of Termination is based and Executive's annual base salary in effect
immediately prior to the Change of Control of the Association, plus (B) the
higher of the highest annual bonus or incentive payment earned by or accrued in
respect of Executive in respect of any of the one year immediately preceding
that in which the Date of Termination occurs or the highest annual bonus or
incentive payment so earned in respect of any of the two years immediately
preceding that in which the Change of Control of the Association occurs. Such
payment shall be made in a lump sum within five days of the date of termination
of Executive's employment.
(b) Upon the occurrence of a Change of Control of the Association
followed at any time during the term of this Agreement by Executive's voluntary
(for Good Reason) or involuntary (other than a Termination for Cause)
termination of employment, the Association shall, for two years or until
Executive obtains employment which provides substantially similar benefits,
provide Executive and anyone entitled to claim under or through Executive all
benefits under any life or other insurance or death benefit plan, medical, group
hospitalization, dental, disability insurance or other future or present similar
group employee benefit plan or program of the Association for which executive
officers are eligible, to the same extent as if Executive had continued to be an
employee of the Association during such period and such benefits shall, to the
extent not paid under any such plan or program, be paid by the Association. The
payments and benefits described in the preceding sentence shall be paid to
Executive's
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beneficiaries by testate or intestate succession in the event of Executive's
death during the period during which such payments and benefits are being
provided. Executive's "qualifying event" for purposes of continuation coverage
under the Consolidated Budget Reconciliation Act ("COBRA") shall occur at the
expiration of such one year period.
(c) Upon the involuntary termination of Executive's employment with the
Association other than a Termination for Cause, or if Executive terminates
employment for Good Reason, in either case after a Change of Control of the
Association occurs, the Association shall pay and provide to Executive (or, in
the event of Executive's death, to Executive's estate):
(i) Executive's earned but unpaid compensation (including,
without limitation, all items which constitute wages under applicable
law and the payment of which is not otherwise provided for under this
section 3) as of the Date of Termination (as hereinafter defined), 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 the Date of Termination;
(ii) the benefits, if any, to which Executive is entitled as a
former employee under the employee benefit plans and programs and
compensation plans and programs maintained for the benefit of the
Association's officers and employees;
(iii) within thirty (30) days following the Date of
Termination, a lump sum payment in an amount equal to the excess, if
any, of:
(A) the present value of the aggregate benefits to
which Executive would be entitled under any and all qualified
and non-qualified defined benefit pension plans maintained by,
or covering employees of, the Association, if Executive were
100% vested thereunder and had continued working for the
Association during the remaining term of this Agreement, such
benefits to be determined as of the Date of Termination by
adding to the service actually recognized under such plans an
additional period equal to the remaining term of this
Agreement and by adding to the compensation recognized under
such plans for the year in which termination of employment
occurs all amounts payable under sections 3(a), 3(b) and
3(c)(i); over
(B) the present value of the benefits to which
Executive is actually entitled under such defined benefit
pension plans as of the Date of Termination;
where such present values are to be determined using the mortality
tables prescribed under section 415(b)(2)(E)(v) of the Internal Revenue
Code of 1986, as amended (the "Code") and a discount rate, compounded
monthly, equal to the annualized rate of interest prescribed by the
Pension Benefits Guaranty Corporation for the valuation of immediate
annuities payable under terminating single-employer defined benefit
plans for the month in which Executive's termination of employment
occurs ("Applicable PBGC Rate");
(d) Executive shall not be required to mitigate the amount of any
payment provided for in section 3 of this Agreement by seeking other employment
or otherwise. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned or benefits received
by Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by Executive to the
Association, or otherwise.
(e) (A) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received
or to be received by Executive in connection with a Change of
Control of the Association or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Association,
any person whose actions result in a Change of Control of the
Association or any person affiliated with the Association or
such person) (all such payments and benefits, including the
payments and benefits provided under this Agreement (the
"Severance Payments"), being hereinafter called "Total
Payments") would not be deductible (in whole or part), by the
Association, an affiliate or a person making such payment or
providing such benefit as a result of Section 280G of the
Code, then, to the extent necessary to make such portion of
the Total Payments deductible (and after taking into account
any reduction in the Total Payments provided in such other
plan, arrangement or agreement), the cash Severance Payments
shall first be reduced (if necessary, to zero), and all other
Severance Payments shall thereafter be reduced (if necessary,
to zero); PROVIDED, HOWEVER, that Executive may elect (at any
time prior to the delivery of a Notice of Termination
hereunder) to have the noncash Severance Payments reduced (or
eliminated) prior to any reduction of the cash Severance
Payments.
155
<PAGE> 5
(B) For purposes of the limitation contained in
Subsection (A) of this section 3(e), (i) no portion of the
Total Payments the receipt or enjoyment of which Executive
shall have effectively waived in writing prior to the delivery
of a Notice of Termination shall be taken into account, (ii)
no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Executive and selected by the
accounting firm which was, immediately prior to the Change of
Control of the Association, the Association's independent
auditor (the "Auditor"), does not constitute a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Code, including by reason of Section 280G(b) (4) (A) of the
Code, (iii) the Severance Payments shall be reduced only to
the extent necessary so that the Total Payments (other than
those referred to in clauses (i) or (ii)), in their entirety
constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b) (4) (B) of the
Code or are otherwise not subject to disallowance as
deductions by reason of Section 280G of the Code, in the
opinion of Tax Counsel, and (iv) the value of any noncash
benefit or any deferred payment or benefit included in the
Total Payments shall be determined by the Auditor in
accordance with the principles of Sections 280G(d) (3) and (4)
of the Code.
(C) If it is established pursuant to a final
determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive
and the Association in applying the terms of this section
3(e), the aggregate "parachute payments" paid to or for
Executive's benefit are in an amount that would result in any
portion of such "parachute payments" not being deductible by
reason of Section 280G of the Code, then Executive shall have
an obligation to pay the Association upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute
payments" paid to or for Executive's benefit over the
aggregate "parachute payments" that could have been paid to or
for Executive's benefit without any portion of such "parachute
payments" not being deductible by reason of section 280G of
the Code; and (ii) interest on the amount set forth in clause
(i) of this sentence at 120% of the rate provided in section
1274 (b) (2) (B) of the Code from the date of Executive's
receipt of such excess until the date of such payment. If the
Severance Payments shall be decreased pursuant to section 3(e)
(A) hereof, and the benefits under clause (i) of the third
sentence of section 3 (b) hereof which remain payable after
the application of section 3 (e) hereof are thereafter reduced
pursuant thereto because of the receipt by Executive of
substantially similar benefits, the Association shall, at the
time of such reduction, pay to Executive the lowest of (a) the
amount of the decrease made in the Severance Payments pursuant
to section 3 (e) hereof, (b) the amount of the subsequent
reduction in such benefits, or (c) the maximum amount which
can be paid to Executive without being, or causing any other
payment to be, nondeductible by reason of section 280G of the
Code.
4. NOTICE OF TERMINATION
(a) Any purported termination by the Association or by the Executive
shall be communicated by Notice of Termination to the other party hereto. Said
Notice of Termination shall be provided to Executive not less than thirty (30)
days prior to Executive's Date of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated written notice which shall (i)
indicate the specific termination provision in this Agreement relied upon; (ii)
set forth in detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify a date of termination, which shall be not less than thirty (30)
days nor more than ninety (90) days after such Notice of Termination is given,
except in the case of a Termination for Cause, in which case the Notice of
Termination may specify a date of termination as of the date of such Notice of
Termination.
(b) "Date of Termination" shall mean the date specified in the Notice
of Termination.
5. SOURCE OF PAYMENTS; GUARANTEE
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the
Association. The Holding Company, however, hereby irrevocably and
unconditionally guarantees to Executive payment of all amounts, and the
performance of all other obligations, due from the Association in accordance
with the terms of this Agreement as and when due without any requirement of
presentment, demand of payment, protest or notice of dishonor or nonpayment.
6. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS
(a) This Agreement contains the entire understanding between the
parties hereto and supersedes any prior agreement between the Association and
Executive (including without limitation that certain Change of Control Agreement
between the Holding
156
<PAGE> 6
Company and Executive dated as of June 30, 1997), except that this Agreement
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.
(b) The termination of Executive's employment during the term of this
Agreement or thereafter, whether by the Association or by Executive, shall have
no effect on the rights and obligations of the parties hereto under the
Association's qualified or non-qualified retirement, pension, savings, ESOP,
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 Association from time to time.
7. 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 affect any such action shall be null,
void, and of no effect.
8. MODIFICATION AND WAIVER
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
9. REQUIRED REGULATORY PROVISIONS
The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Association:
(a) Notwithstanding anything herein contained to the contrary, in no
event shall the aggregate amount of compensation payable to Executive hereunder
(exclusive of amounts described in section 3(c) (i) and (ii)) exceed one time
Executive's average annual total compensation for the last five consecutive
calendar years to end prior to her termination of employment with the
Association (or for her entire period of employment with the Association if less
than five calendar years).
(b) Notwithstanding anything herein contained to the contrary, any
payments to Executive by the Association, 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 ("FDI Act"), 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.
(c) Notwithstanding anything herein contained to the contrary, if
Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the affairs of the Association pursuant to a
notice served under section 8(e)(3) or 8(g)(i) of the FDI Act, 12 U.S.C.
ss.1818(e)(3) or 1818(g)(i), the Association's obligations under this Agreement
shall be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in such notice are dismissed, the
Association, in its discretion, may (i) pay to Executive all or part of the
compensation withheld while the Association's obligations hereunder were
suspended and (ii) reinstate, in whole or in part, any of the obligations which
were suspended.
(d) Notwithstanding anything herein contained to the contrary, if the
Executive is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under section 8(e)(4) or
8(g)(i) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(i), all prospective
obligations of the Association under this Agreement shall terminate as of the
effective date of the order, but vested rights and obligations of the
Association and Executive shall not be affected.
(e) Notwithstanding anything herein contained to the contrary, if the
Association is in default (within the meaning of section 3(x)(i) of the FDI Act,
12 U.S.C. ss.1813(x)(i), all prospective obligations of the Association under
this Agreement shall terminate as of the date of default, but vested rights and
obligations of the Association and Executive shall not be affected.
157
<PAGE> 7
(f) Notwithstanding anything herein contained to the contrary, all
prospective obligations of the Association hereunder shall be terminated, except
to the extent that a continuation of this Agreement is necessary for the
continued operation of the Association: (I) by the Director of the Office of
Thrift Supervision ("OTS") or her designee or the Federal Deposit Insurance
Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Association under the authority contained in
section 13 (c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by the Director of the
OTS or her designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Association or when
the Association is determined by such Director to be in an unsafe or unsound
condition. The vested rights and obligations of the parties shall not be
affected.
If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.
10. SEVERABILITY
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
11. HEADINGS FOR REFERENCE ONLY
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
12. GOVERNING LAW
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Florida (without regard
to the conflict of laws principles thereof), except to the extent preempted by
Federal law.
13. PAYMENT OF COSTS AND LEGAL FEES
The Association shall indemnify, hold harmless and defend Executive
against reasonable costs, including legal fees, in curred by Executive in
connection with or arising out of any action, suit or proceeding in which
Executive may be involved, as a re sult of Executive's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that
Executive shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Association's obligations hereunder shall be
conclusive evidence of Executive's entitlement to indemnification hereunder, and
any such indemnification payments shall be in addition to amounts payable
pursuant to such settlement agreement, unless such settlement agreement
expressly provides otherwise. This provision shall be inoperative if and to the
extent that, but only if and to the extent that, it shall be determined that
compliance herewith would violate any applicable law or regulation.
14. INDEMNIFICATION
The Association shall provide Executive (including her heirs, executors
and administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, shall indemnify
Executive (and her heirs, executors and administrators) to the fullest extent
permitted under applicable law and as provided in the Association's Charter
against all expenses and liabilities reasonably incurred by Executive in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of her having been a director or officer of the
Association (whether or not he continues to be a director or officer at the time
of incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.
15. SUCCESSORS AND ASSIGNS
This Agreement will inure to the benefit of and be binding upon
Executive, her legal representatives and testate or intestate distributees, and
the Association and its 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
Association may be sold or otherwise transferred.
158
<PAGE> 8
16. SUCCESSOR TO THE ASSOCIATION
The Association shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association, expressly and
unconditionally to assume and agree to perform the Association's obligations
under this Agreement, in the same manner and to the same extent that the
Association would be required to perform if no such succession or assignment had
taken place.
IN WITNESS WHEREOF, First Bank of Florida has caused this Agreement to
be executed by its duly authorized officer, and Executive has signed this
Agreement, as of the 20th day of May, 1997.
ATTEST: FIRST BANK OF FLORIDA
/s/ John C. Trammel By: /s/ Louis O. Davis, Jr.
- ------------------------- ------------------------------
Secretary
WITNESS:
/s/ Rita Groton /s/ Alissa Ballot
- ------------------------- ------------------------------
Executive
SEAL
As to the Guarantee:
FIRST PALM BEACH BANCORP, INC.
By: /s/ Louis O. Davis, Jr.
------------------------------
ATTEST:
/s/ Carol A. Patton
------------------------------
159
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
----------------------------- -----------------------------
JUNE 30, 1996 JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
1. Net income $ 2,690,000 $ 2,352,000 $ 7,889,000 $ 6,901,000
=========== ============= =========== =============
2. Weighted average common shares outstanding 4,966,071 4,886,886 4,966,532 4,878,050
3. Common stock equivalents due to dilutive effect of
stock options 130,886 124,244 132,569 124,244
----------- ------------- ----------- -------------
4. Total weighted average common shares and
equivalents outstanding for primary earnings per
share computation 5,096,957 5,011,130 5,099,101 5,002,294
=========== ============= =========== =============
5. Primary earnings per share $ 0.53 $ 0.47 $ 1.55 $ 1.38
=========== ============= =========== =============
6. Weighted average common shares outstanding 5,096,957 5,011,130 5,099,101 5,002,294
7. Additional dilutive shares using the higher of the
end of period market value versus average market
value for the period utilizing the treasury stock
method regarding stock options -- 59,671 -- 59,671
----------- ------------- ----------- -------------
8. Total weighted average common shares and
equivalents outstanding for fully diluted earnings
per share computation 5,096,957 5,070,801 5,099,101 5,061,965
=========== ============= =========== =============
9. Fully diluted earnings per share $ 0.53 $ 0.46 $ 1.55 $ 1.36
=========== ============= =========== =============
</TABLE>
160
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION FOR THE PERIOD ENDED JUNE 30, 1997
AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY THE REFERENCE TO SUCH FINANCIAL STATEMENTS
FILED WITH FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 20,069
<INT-BEARING-DEPOSITS> 44,749
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 182,834
<INVESTMENTS-CARRYING> 236,139
<INVESTMENTS-MARKET> 238,480
<LOANS> 1,126,314
<ALLOWANCE> 6,755
<TOTAL-ASSETS> 1,666,396
<DEPOSITS> 1,227,277
<SHORT-TERM> 185,000
<LIABILITIES-OTHER> 27,680
<LONG-TERM> 109,825
0
0
<COMMON> 55
<OTHER-SE> 109,440
<TOTAL-LIABILITIES-AND-EQUITY> 1,666,396
<INTEREST-LOAN> 65,006
<INTEREST-INVEST> 19,292
<INTEREST-OTHER> 639
<INTEREST-TOTAL> 84,937
<INTEREST-DEPOSIT> 42,506
<INTEREST-EXPENSE> 51,841
<INTEREST-INCOME-NET> 33,096
<LOAN-LOSSES> 2,200
<SECURITIES-GAINS> 1,246
<EXPENSE-OTHER> 25,351
<INCOME-PRETAX> 11,538
<INCOME-PRE-EXTRAORDINARY> 6,901
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,901
<EPS-PRIMARY> 1.38
<EPS-DILUTED> 1.36
<YIELD-ACTUAL> 3.03
<LOANS-NON> 10,637
<LOANS-PAST> 380
<LOANS-TROUBLED> 7,943
<LOANS-PROBLEM> 3,643
<ALLOWANCE-OPEN> 11,855
<CHARGE-OFFS> 8,804
<RECOVERIES> 1,504
<ALLOWANCE-CLOSE> 6,755
<ALLOWANCE-DOMESTIC> 6,755
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
