Exhibit 10.3
Employment Agreement Between Federal Trust Corporation
and Aubrey H. Wright, Jr.
EMPLOYMENT AGREEMENT
BY AND AMONG
FEDERAL TRUST BANK,
FEDERAL TRUST CORPORATION
AND
AUBREY H. WRIGHT
THIS EMPLOYMENT AGREEMENT ("Agreement") is being entered into by and
among Federal Trust Bank, a federally-chartered stock savings bank which has its
principal office in Winter Park, Florida ("Bank"), Federal Trust Corporation, a
Florida corporation ("Corporation") and Aubrey H. Wright ("Emplo yee").
WITNESSETH:
WHEREAS, the Employee is the Chief Financial Officer of the Bank and
the Corporation and has developed an intimate and thorough knowledge of the
business methods and operations of the Bank and the Corporation;
WHEREAS, the retention of the Employee's services for and on behalf of
the Bank and the Corporation is of material importance to the preservation and
enhancement of the value of the business of the Bank and the Corporation; and
WHEREAS, the Employee, the Bank, through its Board of Directors, and
the Corporation, through its Chief Executive Executive Officer and President,
have agreed to this Agreement in order to update and clarify their relationship
and to comply with current government regulations;
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Bank, the Corporation and the Employee do hereby agree as follows:
I. TERM OF EMPLOYMENT
Section 1.1 The Bank shall employ the Employee as its Chief Financial
Officer, as hereinafter provided, and the Employee hereby accepts said
employment and agrees to render such services to the Bank on the terms and
conditions set forth in this Agreement commencing on the "Effective Date" as
defined in Section 8.5 herein, and terminating September 30, 1996, unless
further extended or terminated in accordance with the terms and conditions
hereinafter set forth. During the term of this Agreement, the Employee agrees to
perform such duties as are customarily performed by one holding the position of
Chief Financial Officer of a financial institution. The Board of Directors of
the Bank and the Corporation shall review this Agreement and the Employee's
performance on or before September 15, 1996, and annually thereafter, in order
to determined whether to extend this Agreement. The de cision to extend the term
of this Agreement for an additional year is within the sole discretion of the
Board of Directors. References herein to the term of this Agreement shall refer
both to the initial term and successive terms.
Section 1.2 During the term of the Agreement, the Employee shall
perform such executive services for the Bank as may be consistent with his
titles and from time to time be assigned to him by the Bank's Board of
Directors. The Employee shall devote his best efforts, including such portion of
his time and effort to the affairs and business of the Bank and the Corporation
as is customarily provided by a Chief Financial Officer for such companies.
Section 1.3 The services of the Employee shall be rendered principally
in Winter Park, Florida, but he shall do such traveling on behalf of the Bank
and the Corporation as may be reasonably required.
II. COMPETITIVE ACTIVITIES
Section 2.1 Employee agrees that duirng the term of his employment
hereunder, except with the express consent of the Board of Directors of the Bank
or the Corporation, he will not, directly or indirectly, engage or participate
in, become a director of, or render advisory or other services fo r, or in
connection with, or become interested in, or make any financial investment in
any firm, corporation, or business enterprise competitive with or to any
business of the Bank; provided, however, that the Employee shall not thereby be
precluded or prohibited from owning passive investments, in cluding investments
in the securities of other financial institutions, so long as such ownership
does not require him to devote substantial time to management or control of the
business or activities in which he has invested.
Section 2.2 Employee agrees and acknowledges that by virtue of his
employment hereunder, he will maintain an intimate knowledge of the activities
and affairs of the Bank, including trade secrets and other confidential matters.
As a result, also because of the special, unique, and extrao rdinary services
that the Employee is capable of performing for the Bank or one of their
competitors, the Employee recognizes that the services to be rendered by him
hereunder are of a character giving them a peculiar value, the loss of which
cannot be adequately or reasonably compensated for by da mages. Employee,
therefore, agrees that during the term of this Agreement, and for a period of
six (6) months after either a voluntary termination by the Employee (except for
a termination effected pursuant to the provisions of Section 7.10 herein) or due
to a termination resulting from termination of the Employee for cause, the
Employee shall not:
(a) divulge any matter pertaining to the activities and affairs of the
Bank, including without limitation, trade secrets and other confidential matters
except as may be required by law; and
(b) become employed, directly or indirectly, whether as an employee,
independent contractor, consultant, or otherwise, in the financial services
industry with any business enterprise or business entity competitive with or to
any business of the Bank, and either maintains offices or does busi ness in
Orange County, Florida.
Employee agrees that breach of any of these covenants by the Employee
shall constitute irreparable harm to the Bank for which the Bank does not have
an adequate remedy by law, and that the Bank is, therefore, entitled to
immediate injunctive or other equitable relief to restrain the Employee from
violating the provisions of this Agreement. The right to such injunctive and
equitable relief shall survive the termination for cause of the Employee by the
Bank or the voluntary termination of this Agreement by the Employee except if
such termination is affected pursuant to the provisions of Section 7.10 herein.
Employee hereby agrees that the duration of the anticompetitive
covenant set forth herein is reasonable, and its geographic scope not unduly
restrictive.
III. COMPENSATION
Section 3.1 The Bank will compensate and pay the Employee for services
during the term of the Agreement at a minimum base salary of $75,000 per year
for the year ending December 31, 1995, with annual salary increases, if any,
thereafter in an amount determined by the Board of Directors.
Section 3.2 Employee will be considered for any annual performance
bonus or bonus program developed by the Board of Directors of the Bank or the
Corporation. The granting of an annual bonus shall be on a subjective basis,
considering the Employee's performance and the performance of the Bank and/or
the Corporation. Any performance bonuses awarded the Employee by the Bank or the
Corporation shall not be considered as nor constitute part of the Employee's
base salary for the purposes of this Agreement.
IV. PARTICIPATING IN RETIREMENT AND MEDICAL PLANS,
LIFE INSURANCE AND DISABILITY
Section 4.1 Except as otherwise stated herein, the Employee shall be
entitled to participate in and receive the benefits of any plans of the Bank
relating to pension, profit-sharing, or other retirement benefits. This
includes, but shall not be limited to, participation in the Federal Trust
Corporation's ESOP program.
Except as otherwise stated herein, the Employee shall also be entitled
to participate in and receive the benefits of any plans of the Bank relating to
medical coverage or reimbursements that the Bank may adopt for the benefit of
their employees. The Bank shall also provide hospitalization cove rage and
expenses for the Employee and his spouse.
Section 4.2 (a) If the Employee shall become disabled or incapacitated
to the extent that he is unable to perform his duties as Chief Financial Officer
of the Bank and the Corporation, he shall nevertheless continue to receive the
following percentages of his compensation, exclusive of any benefits which may
be in effect for employees of the Bank, under Section 4.1 herein, for the
following periods of his disability: 100% for the first six (6) months and 75%
hereafter for the remaining term of this Agreement. Upon returning to active
duties, the Employee's full compensation as set forth in this Agreement shall be
reinstated. In the event that the Employee returns to active employment on other
than a full-time basis, then his compensation (as set forth in Section 3.1
herein) shall be reduced in proportion to the time spent in said employment.
(b) There shall be deducted from the amounts paid to the Employee
hereunder during any period of disability, as described in Section 4.2(a)
herein, any amounts actually paid to the Employee pursuant to any disability
insurance or other similar such program which the Bank has instituted or may
institute on behalf of their employees for the purpose of compensating employees
in the event of disability.
For the purpose of this Agreement, the Employee shall be deemed
disabled or incapacitated if the Employee, due to physical or mental illness,
shall have been absent from his duties with the Bank, on a full-time basis for
three (3) consecutive months; provided that, if the Employee shall not agree
with a determination to terminate him because of disability or incapacity, the
question of the Employee's ability shall be submitted to an impartial and
reputable physician selected by the parties hereto and such physician's
determination on the question of disability or incapacity shall be b inding.
V. ADDITIONAL COMPENSATION AND BENEFITS
Section 5.1 During the term of this Agreement, the Employee will be
entitled to participate in and receive the benefits of any stock option, stock
ownership, profit-sharing, or other plans, benefits and privileges given to
employees and executives of the Bank which are currently in effect at the
execution of this Agreement or which may come into existence thereafter, to the
extent the Employee is otherwise eligible and qualifies to so participate in and
receive such benefits or privileges. The Bank and/or the Corporation shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Employee's rights or benefits thereunder, unless such change occurs
pursuant to a program applicable to all executive officers (Vice President or
above) of the Bank or the Corporation, whichever the case might be, and does not
result in a proportionately greater ad verse change in the rights of or benefits
to the Employee as compared with any other executive officer of the Bank or the
Corporation. Furthermore, that Bank shall not make any changes in plans,
benefits or privileges in effect at the execution of this Agreement which would
adversely affect the Emp loyee's Rights or benefits thereunder, except by the
mutual agreement of the parties. Nothing paid to the Employee under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Employee pursuant to Section 3.1
herein.
Section 5.2 Employee shall be entitled to three (3) weeks paid
vacation.
VI. EXPENSES
Section 6.1 The Bank and/or the Corporation shall reimburse the
Employee or otherwise provide for or pay for all reasonable expenses incurred by
the Employee in furtherance or in connection with the business of the Bank or
the Corporation including, but not by way of limitation, automobile and
traveling expenses, along with reasonable entertainment expenses (whether
incurred at the Employee's residence, while traveling, or otherwise), subject to
such reasonable limitations as may be established by the respective Boards of
Directors.
VII. TERMINATION
Section 7.1 The Bank shall have the right, at any time upon prior
written notice of termination satisfying the requirements of Section 7.10(c)
herein, to terminate the Employee's employment hereunder, including termiantion
for just cause. For the purpose of this Agreement, termination for "j ust cause"
shall mean termination for personal dishonesty, incompetence, willful
misconduct, material breach of fiduciary duty, intentional failure to perform
the duties stated in this Agreement, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses), w illful
violation of a final cease-and-desist order, willful or intentional breach or
negligence or misconduct in the performance of such duties or material breach of
any provision of this Agreement as determined by a court of competent
jurisdiction or in final agency action by a federal or state re gulatory agency
having jurisdiction over the Bank. For purposes of this Section, no act, or
failure to act, on the Employee's part shall be considered "willful" unless
done, or omitted to be done, by him not in good faith and without reasonable
belief that his actioin or omission was in the best in terest of the Bank or the
Corporation; provided that any act or omission to act by the Employee in
reasonable reliance upon an opinion of counsel to the Bank or the Corporation
shall not be deemed to be willful.
Section 7.2 In the event the Employee is terminated for just cause
pursuant to Section 7.1 herein, the Employee shall have no right to compensation
or other benefits for any period after such date of termination. If the Employee
is terminated by the Bank other than for just cause pursuant to Section 7.1
herein, and other than in connection with a change in control of the Bank, as
defined herein, the Employee's right to compensation and other benefits under
this Agreement shall be as set for th in Sections 7.10(e) and (f) herein. In the
event the Employee is terminated by the Bank othe r than for just cause pursuant
to Section 7.1 herein, but in connection with a change in control of the Bank as
defined herein, the Employee's right to compensation and other benefits under
this Agreement shall be as set forth in Sections 7.10(d)(e) and (f) herein.
Section 7.3 Employee shall have the right, upon prior written notice of
termination of not less than thirty (30) days satisfying the requirements of
Sections 7.10(c) herein, to terminate his employment hereunder, but in such
event, the Employee shall have no right after the date of terminat ion to
compensation or other benefits as provided in this Agreement, unless such
termination is for "good reason", as defined, pursuant to Section 7.10(a)
herein. If the Employee provides a notice of termination for good reason, the
date of termination shall be the date on which a notice of termina tion is
given.
Section 7.4 If the Employee is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's affairs pursuant to
notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act ("FDIA") (12 U.S.C. Section 1818[e][3] and Sectio n 1818[g][1]),
the Bank's obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Bank may, in its discretion: (I) pay the Employee all or part
of the compensation withheld while its obl igations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.
Section 7.5 If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections
1818[e][4] and [g][1], all obligations of the Bank under this A greement shall
terminate as of the effective date of the order, but vested rights of the
Employee and the Bank as of the date of termination shall not be affected.
Section 7.6 All obligations under this Agreement may be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent that it is
determined that continuation of the Agreement for the continued operation of the
Bank is necessary): (i) by the Director of the Office of Thrift Supe rvision
("OTS"), or his/her designee, at the time the Federal Deposit Insurance
Corporation ("FDIC") or Resolution Trust Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA (12 U.S.C. Section 1823[c]); or (ii) by the Director
of the OTS, or his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director of the OTS in final agency
action to be in an unsafe or unsound condi tion, but vested rights of the
Employee and the Bank as of the date of termination shall not be affected.
Section 7.7 If the Bank is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813[x][1]) to mean an adjudication or other
official determination by any court of competent jurisdiction, the appropriate
federal banking agency or other public authority pursuant to which a
conservator, receiver or other legal custodian is appointed for the Bank., all
obligations under this Agreement shall terminate as of the date of default, but
vested rights of the Employee and the Bank as of the date of termination shall
be not affected.
Section 7.8 In the event that the Employee is terminated in a manner
which violates any provisions of this Agreement, as determined by a court of
competent jurisdiction, the Employee shall be entitled to reimbursement for all
reasonable costs, including attorneys fees, in challenging such te rmination.
Further, because of economic disparity among the Bank, the Corporation and the
Employee, the Bank and/or the Corporation (jointly and severally) agree(s) to
pay for the Employee's reasonable attorneys' fees and costs up to $20,000 to
enforce the terms of this Agrement or recovered damage s for breach of this
agreement as follows; up to $10,000 at the commencement of litigation and up to
an additional $10,000 during the course of litigation. In the event the
Employeee is unsuccessful in his claim or defense, the Employee shall reimburse
the Bank for any attorneys' fees, expenses and costs that have been advanced by
the Bank. If the Employee is successful, any attorneys' fee award will be
reduced by the amount of attorney's fees and costs that have been advanced. Such
reimbursement shall be in addition to all rights to which the Employee is
otherwise entitled under this Agreem ent.
Section 7.9 This Agreement shall be terminated upon the death of the
Employee during the term of this Agreement; provided that, if the Employee has
heirs, the estate of the Employee shall be entitled to receive payment in an
amont equal to 75% of the Employee's total annual compensation, at the date of
death, as calculated in accordance with Section 3.1 herein, for the remainder of
the term of this Agreement. Unless alternative arrangements are made by the Bank
and/or the Corporation and the legal representative of the Employee's estate,
such payment shall be made in one installment d ue and payable within thirty
(30) days of the Employee's death.
Section 7.10(a) Employee may terminate his employment hereunder for
good reason. For purposes of this Agreement, "good reason" shall mean (i) a
failure by the Bank or the Corporation to comply with any material provision of
this Agreement, which failure has not been cured within ten (10) days after a
notice of such noncompliance has been given by the Employee to the Bank or the
Corporation; or (ii) subsequent to a change in control as defined in Section
7.10(b) and without the Employee's express written consent, any of the following
shall occur: the assignment to the Employee of any dut ies inconsistent with the
Employee's positions, duties, responsibilities and status with the Bank or the
Corporation immediately prior to a change in control; a change in the Employee's
reporting responsibilities, titles or offices as in effect immediately prior to
a change in control of the Bank o r the Corporation; any removal of the Employee
from, or any failure to re-elect the Employee to, any of such positions, except
in connection with a termination of employment for just cause, disability,
death, or removal pursuant to Section 7.1 or 7.5 herein; a reduction by the Bank
or the Corporati on in the Employee's annual salary as in effect immediately
prior to a change in control; the failure of the Bank or the Corporation to
contijue in effect any bonus, benefits or compensation plan, life insurance
plan, health and accident plan or disability plan in which the Employee is
participatin g at the time of a change in control of the Bank or the
Corporation, or the taking any action by the Bank or the Corporation which would
adversely affect the Employee's participation in or materially reduce the
Employee's benefits under any of such plans or the transfer of the Employee to
any locat ion outside of Orange County, Florida, or the assignment of
substantial duties to the Employee to be completed outside Orange County,
Florida, without the prior consent of the Employee.
(b) For purposes of this Agreement, a "change in control" shall mean a
change in control with respect to either the Bank or the Corporation as defined
in 12 C.F.R. Sections 574.4 (a) or (b) of the OTS regulations.
(c) Any termination of the Employee's employment by the Bank or by the
Employee shall be communicated by written notice of termination to the other
party hereton. For purposes of this Agreement, a "notice of termination" shall
mean a dated notice which shall (i) indicate the specif ic termination provision
in the Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty ( 30) days nor more than
forty-five (45) days after such notice of termination is given, except in the
case of the Bank's termination of the Employee's employment for just cause
pursuant to Section 7.1 herein, in which case the notice of termination may
specify a date of termination as of the date of such notice of termination is
given; and (iv) be given in the manner specified in Section 8.3 herein.
(d) In the event of a change in control as provided in Section 7.10(b)
above, the Corporation agrees to pay the Employee a special incentive bonus
equal to two times the Employee's annual salary then in effect, times the
price/book value ratio at which the Bank or the Corporation is acquired . If the
Employee accepts employment with either the acquiror or the Bank after the
acquisition, the Employee shall be entitled to a special incentive bonus equal
to two times 50% of the Employee's annual salary then in effect, times the
price/book value ratio at which the Bank or the Corporation w as acquired.
(e) If the Employee shall terminate his employment for good reason as
defined in Section 7.10(a)(i) herein, or if the Employee is terminated by the
Bank for other than just cause pursuant to Section 7.1 herein, then in lieu of
any further salary payments to the Employee for periods subsequen t to the date
of termination, the Employee shall be paid, as severance, an amount which would
equal the Employee's total annual compensation for the remainder of the term of
the Agreement, plus any special incentive bonus which the Employee would have
been entitled to under Section 7.10(b) herein , should a change in control of
the Bank or the Corporation occur within twelve (12) months equal semi-monthly
installments on the fifteenth and last days of each month until paid in full. .
(f) Unless the Employee is terminated for just cause pursuant to
Section 7.1 herein, pursuant to Section 7.5 herein, or pursuant to a termination
of employment by the Employee for other than good reason, the Bank shall
maintain in full force and effect, for the continued benefit of the Empl oyee
for the remaining term of this Agreement, or twelve (12) months (whichever is
longer), all employee benefit plans and programs in which the Employee was
entitled to participate immediately prior to the date of termination, provided
that the Employee's continued participation is possible under the general terms
and provisions of such plans and programs. Further, the Bank shall pay for the
same or similar benefits if such benefits are available to the employee on an
individual or group basis as a result of contractual or statutory provisions
requiring or permitting such availability incl uding, but not limited to, health
insurance covered under COBRA.
(g) Employee shall not be required to mitigate the amount of any
payment provided for in Sections 7.10(d) and (e) of this Agreement by seeking
other employment or otherwise.
VIII. MISCELLANEOUS
Section 8.1 Notwithstanding anything to the contrary herein contained,
the payment or obligation to pay any monies, or granting of any rights or
privileges to the Employees as provided in this Agreement shall not be in lieu
or derogation of the rights and privileges that the Employee now has under any
plan or benefit presently outstanding.
Section 8.2 This Agreement may not be modified, changed, amended, or
altered except in writing signed by the Employee or by his duly authorized
representative, and by a duly authorized representative of the Bank.
Section 8.3 All notices given or required to be given herein shall be
in writing, sent by United States first-class certified or registered mail,
postage prepaid, by way of overnight carrier or by hand delivery. If to the
Employee (or to the Employee's spouse or estate upon the Employee's de ath)
notice shall be sent to the Employee's last-known address, and if to the Bank
and/or the Corporation, notice shall be sent to the respective corporate
headquarters. All such notices shall be effective when deposited in the mail if
sent via registered mail, or upon delivery if by hand delivery or sent via
overnight letter. Either party, by notice in writing, may change or designate
the place for receipt of all such notices.
Section 8.4 No course of conduct by the Bank, the Corporation or the
Employee and no delay or omission of the Bank, the Corporation or the Employee
to exercise any right or power given under this Agreement shall: (I) impair the
subsequent exercise of any right or power, or (ii) be construed to be a waiver
of any default or any acquiescence in or consent to the curing of any default
while any other default shall continue to exist, or be construed to be a waiver
of such continuing default or of any other right or power that shall theretofore
have arisen. Any power and/or remedy granted by law and by this Agreement to any
party hereto may be exercised from time to time, and as often as may be deemed
expedient. All such rights and powers shall be cumulative to the fullest extent
permitted by law.
Section 8.5 The "Effective Date" of this Agreement shall be retroactive
to September 1, 1995.
Section 8.6 All references herein to particular sections of a statute,
rule or regulation or to a particular disclosure item or schedule shall also be
deemed to be a reference to any successor section, statute, rule, regulation,
disclosure item or schedule.
Section 8.7 The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
Section 8.8 This Agreement supersedes and replaces all previous
employment agreements or amendments thereto among the Bank, the Corporation and
the Employee.
IX. SUCCESSORS, ETC.
Section 9.1 This Agreement shall inure to the benefit of and be binding
upon the Employee, and to the extent applicable, his heirs, assigns, executors,
and personal representatives, and the Bank and the Corporation, their
successors, and assigns, including, without limitation, any person, pa
rtnerhsip, or corporation which may acquire all or substantially all of the
Bank's or the Corporation's assets and business, or with or into which the Bank
or the Corporation may be consolidated or merged, and this provision shall apply
in the event of any subsequent merger, consolidation, or trans fer, unless such
merger or consolidation or subsequent merger or consolidation is a transaction
of the type which would result in termination under Sections 7.6 and 7.7 herein.
Section 9.2 This Agreement is personal to each of the p arties and
neither party may assign or delegate any of their rights or obligations under
this Agreement without the prior written consent of the other party.
X. APPLICABLE LAW AND VENUE
Section 10.1 This Agreement shall be governed in all respects and be
interpreted by and under the laws of Florida, except to the extent that such law
may be preempted by applicable federal law, including regulations, opinions or
orders duly issued by the OTS and FDIC ("Federal Law"), in which event this
Agreement shall be governed and be interpreted by and under Federal Law.
Section 10.2 The venue for any litigation concerning the enforcement of
this Agreement or a breach of this Agreement shall be Orange County, Florida.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on this 26th day of January, 1996.
FEDERAL TRUST BANK
By: /s/George W. Foster
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Witness George W. Foster
Chairman of the Board
FEDERAL TRUST CORPORATION
By: /s/James T. Bell
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Witness James T. Bell
Chief Executive Officer and President
/s/Aubrey H. Wright
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Aubrey H. Wright
(Employee)