Attached files
Exhibit 10.3
REPUBLIC
FIRST BANK DEFERRED COMPENSATION PLAN
Amended
and Restated Effective as of December 31, 2009 (the “Effective
Date”)
WHEREAS,
BSC Services Corp. (“BSC”) previously established a nonqualified deferred
compensation plan designated as the BSC Services Corp. Deferred Compensation
Plan (the “BSC Plan”) for certain employees, including employees who provided
services for Republic First Bancorp, Inc. (the “Company”) or its subsidiary,
Republic First Bank (collectively referred to as “Republic First”);
and
WHEREAS,
the operations of Republic First have been separated from the business
operations of other employers whose employees were covered by the BSC Plan;
and
WHEREAS,
the Company, acting as the successor to BSC with respect to the BSC Plan as
operated for the benefit of employees providing services to Republic First,
desires to assume the portion of the BSC Plan covering such employees and to
amend and restate that portion of the BSC Plan as the Republic First Bank
Deferred Compensation Plan (the “Plan”), effective as of the Effective date, as
hereinafter set forth.
ARTICLE
I
DEFINITIONS
Wherever
used herein the following terms shall have the meanings hereinafter set
forth:
1.1 “Account”
means, with respect to a Participant, the bookkeeping account maintained under
the Plan in the Participant’s name to which is credited Company Contributions,
if any, and Deferral Contributions, if any, as adjusted to reflect the income,
gains and losses credited with respect to such contributions and any
distributions to the Participant. The starting balance in a
Participant’s Account as of the Effective Date shall be the Participant’s
accrued benefit under the BSC Plan as in effect immediately prior to the
Effective Date.
1.2 “Base
Compensation” means, with respect to a Participant, the Participant’s regular
salary as adjusted on a quarterly basis.
1.3 “Board”
means the Board of Directors of the Company.
1.4 “Cause”
means (a) breach of a fiduciary duty to the Company involving personal profit or
which causes harm to the Company or any subsidiary, (b) conviction of a felony
or willful violation of any banking law or regulation or an indictment or return
of any information, or a conviction involving a crime of moral turpitude, (c)
negligent performance of the Participant’s duties that results in a material
impairment of the Company’s financial condition, (d) an order from any
regulatory authority to terminate the Participant for breach of any law or
regulations, or (e) a failure of the Participant to comply with a direct lawful
written order of the Board.
1.5 “Change
in Control” means, with respect to each Participant, any one of the following
events: (i) a change in the ownership of the entity that is the
principal service recipient with respect to a Participant (the “Participant’s
Service Recipient”), (ii) a change in the effective control of a Participant's
Service Recipient, or (iii) a change in the ownership of a substantial
portion
of the assets of a Participant's Service Recipient, each such event as hereafter
defined, where the occurrence of such event must be objectively determinable,
without discretionary authority by the Committee.
(a) A change
in the ownership of a corporation occurs on the date that any one person, or
more than one person acting as a group (as hereafter defined) acquires ownership
of stock of the corporation that, together with stock held by such person or
group, constitutes more than 50 percent of the total fair market value or total
voting power of the stock of such corporation. However, if any one
person or more than one person acting as a group, is considered to own more than
50 percent of the total fair market value or total voting power of the stock of
a corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of the corporation (or to
cause a change in the effective control of the corporation). An
increase in the percentage of stock owned by any one person, or persons acting
as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an
acquisition of stock for this purpose. This definition applies only
when there is a transfer of stock of a corporation (or issuance of stock of a
corporation) and stock in such corporation remains outstanding after the
transaction.
For
purposes of the foregoing, persons will not be considered to be "acting as a
group" solely because they purchase or own stock of the same corporation at the
same time, or as a result of the same public offering. However,
persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the corporation. If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a group with other shareholders
in a corporation prior to the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation.
A change
in the effective control of a corporation occurs on the date that
either: (i) any one person, or more than one person acting as a group
(as defined above), acquires (or has acquired during the 12-month period ending
on the date of the most recent acquisition by such person or persons) ownership
of stock of the corporation possessing 35 percent or more of the total voting
power of the stock of such corporation; or (ii) a majority of members of the
corporation's board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the corporation's board of directors prior to the date of the
appointment or election, provided that the term corporation refers solely to the
relevant corporation, for which no other corporation is a majority
shareholder.
(b) In the
absence of an event described above, a change in the effective control of a
corporation will not have occurred.
(c) A change
in effective control also may occur in any transaction in which either of the
two corporations involved in the transaction has a Change in Control
event.
(d) If any
one person, or more than one person acting as a group (as defined above) is
considered to effectively control a corporation, the acquisition of additional
control of the corporation by the same person or persons is not considered to
cause a change in the effective control of the corporation.
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(e) A change
in the ownership of a substantial portion of a corporation's assets occurs on
the date that any one person, or more than one person acting as a group (as
defined above) acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or persons) assets from
the corporation that have a total gross fair market value equal to or more than
40% of the total gross fair market value of all the assets of the corporation
immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the
corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
(f) There is
no Change in Control event when there is a transfer to an entity that is
controlled by the shareholders of the transferring corporation immediately after
the transfer, as provided in this paragraph. A transfer of assets by
a corporation is not treated as a change in the ownership of such assets if the
assets are transferred to: (i) a shareholder of the corporation
(immediately before the asset transfer) in exchange for or with respect to its
stock; (ii) an entity, 50 percent or more of the total value or
voting power of which is owned, directly or indirectly, by the
corporation; (iii) a person, or more than one person acting as a
group, that owns, directly or indirectly, 50 percent or more of the total value
or voting power of all the outstanding stock of the corporation; or (iv) an
entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in paragraph
(iii). For purposes of this paragraph, and except as otherwise
provided, a person's status is determined immediately after the transfer of the
assets. For example, a transfer to a corporation in which the
transferor corporation has no ownership interest before the transaction , but
which is a majority-owned subsidiary of the transferor corporation after the
transaction is not treated as a change in the ownership of the assets of the
transferor corporation.
1.6 “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any
regulations relating thereto.
1.7 “Committee”
means the Compensation Committee of the Board.
1.8 “Company” means
Republic First Bancorp, Inc., a Pennsylvania corporation, or any successor
corporation or other entity resulting from a merger or consolidation into or
with the Company.
1.9 “Company
Contribution” means the amounts credited to a Participant’s Account as
determined under Section 3.1.
1.10 “Deferral
Contribution” means the amounts credited to a Participant’s Account as
determined under Section 3.2.
1.11 "Disability"
means a Participant's total and permanent disability, as determined by the
Committee.
1.12 “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
1.13 “Non-Employee
Director” means a member of the Board.
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1.14 “Participant”
means each person who was a participant in the BSC Plan prior to the Effective
Date, who as an account balance under the BSC Plan, and who continues to be
employed by Republic First or who continues to be a Non-Employee
Director.
1.15 “Plan”
means the Republic First Bank Deferred Compensation Plan, as set forth herein
and as may be amended from time to time.
1.16 “Plan
Year” means each calendar year beginning on or after the Effective
Date.
1.17 “Termination
of Employment” means, with respect to a Participant, the date the Participant
ceases to be an employee of Republic First or, in the case of a Non-Employee
Director, the date the Non-Employee Director ceases to be a voting member of the
Board. Termination of employment hereunder includes termination on
account of Disability or death. All determinations regarding whether
or not there has been Termination of Employment for purposes of the Plan shall
be consistent with the requirements of Code Section 409A and applicable guidance
from the IRS or the U.S. Treasury, including the definition of “separation from
service” set forth in Treasury Regulation Section 1.409A-1(h).
1.18 "Unforeseeable
Emergency" means a severe financial hardship to the Participant resulting from
illness or an accident of the Participant, the Participant's spouse, or a
dependent of the Participant (as defined in Code Section 152(a)), loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
Participant's control. A situation shall be considered to constitute
an Unforeseeable Emergency for these purposes only if the circumstances would
constitute an “unforeseeable emergency” as that term is used for purposes of
Code Section 409A(a)(2)(B)(ii) and Treasury Regulation Section
1.409A-3(i)(3)(i).
Words in
the masculine gender shall include the feminine and the singular shall include
the plural, and vice versa, unless qualified by the context. Any
headings used herein are included for ease of reference only and are not to be
construed so as to alter the terms hereof.
ARTICLE
II
ADMINISTRATION
AND ELIGIBILITY FOR PARTICIPATION
2.1 Administration
by the Committee. The Committee shall be responsible for the general
operation and administration of the Plan and for carrying out the provisions of
the Plan.
2.2 Powers
and Duties of the Committee. The Committee shall administer the Plan
in accordance with its terms and shall have all powers necessary to carry out
the provisions of the Plan. The Committee shall interpret the Plan
and shall determine all questions arising in the administration, interpretation,
and application of the Plan, including but not limited to, questions of
eligibility, determinations of Cause and the status and rights of employees,
Non-Employee Directors, Participants and other persons. Any such
determination by the Committee shall presumptively be conclusive and binding on
all persons. The regularly kept records of the Company shall be
conclusive and binding upon all persons with respect to the amount of a
Participant’s Base Compensation for a Plan Year. All rules and
determinations of the Committee shall be uniformly and consistently applied with
respect to all Participants in similar circumstances.
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2.3 Eligibility
for Participation. Those individuals who were participants in the BSC Plan
immediately prior to the Effective Date and who are employed by Republic First
or who are Non-Employee Directors shall participate in the Plan. Each
Participant shall continue to be a Participant until his or her benefit
hereunder is distributed in full (or forfeited). No other individual
shall become a Participant on or after the Effective Date.
2.4 Applicability
of ERISA. The operation and interpretation of the Plan,
including but not limited to, the designation of senior executives, officers and
Non-Employee Directors as Participants, shall be consistent with the fact that
the Plan is primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, as provided in
Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.
ARTICLE
III
CONTRIBUTIONS
3.1 Company
Contribution. The Company may credit, from time to time, to a Company
Contribution Participant’s Account such amount, if any, that the Committee
determines to be appropriate, at its sole discretion. Company
Contributions shall be credited to a Company Contribution Participant’s Account
as soon as administratively practicable following the Committee’s determination
to make such a contribution.
3.2 Deferral
Contribution. For periods starting on or after the Effective Date, no
additional contributions by any Participant shall be permitted, except to the
extent an irrevocable election to make such contributions has been made
previously and must be given effect to comply with applicable provisions of Code
Section 409A.
3.3 Investment.
Each Participant’s Account shall be credited as of the Effective Date, with the
amount credited on the immediately preceding date under the terms of the BSC
Plan. For all periods on or after the Effective Date, each
Participant’s Account shall be credited with gains, losses and expenses as if
such Account had been invested, at the direction of the Participant, in such
investments as selected by the Participant. For these purposes,
Participants shall be permitted to elect investments in any investment available
generally as a publicly traded investment fund or security, subject to such
rules and regulations as may be established from time to time for these purposes
by the Committee.
ARTICLE
IV
VESTING
AND DISTRIBUTION
4.1 Vesting
of Company Contributions. Each Company Contribution credited to a
Participant’s Account under the BSC Plan shall become vested three (3) years
after the end of the plan year to which the contribution applies,
during which the Participant is continuously employed by Republic
First. Amounts credited to a Participant’s Account under Section 3.2
shall always be fully vested. Any nonvested amounts shall become
fully vested upon a Change in Control. Except as expressly provided
herein, upon a Participant’s Termination of Employment for any reason, all
nonvested deferral credit amounts under Section 3.1 shall be
forfeited. Notwithstanding the foregoing, all amounts credited to a
Participant’s Account under Section 3.1, whether vested or nonvested, shall be
forfeited upon the Participant’s Termination of Employment for
Cause.
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4.2 Distribution
of Account Upon Termination of Employment. Following a Participant’s
Termination of Employment for any reason, the Participant’s vested Account shall
be distributed in a single lump sum, as soon as practicable. Such distribution
hereunder shall be made in cash or as an in-kind distribution of an investment,
as determined at the discretion of the Committee.
Notwithstanding
the foregoing, the vested Account of any Participant who is a “specified
employee” (as defined below) shall not be distributed until the six month
anniversary of such Participant’s termination of employment. For
these purposes, a “specified employee” shall have the meaning as set forth in
Code Section 409A(a)(2)(B)(i) and Treasury Regulation Section
1.409A-1(i).
4.3 Distribution
on Account of Unforeseen Emergency. Upon notification by a
participant to the Committee of an Unforeseen Emergency, the Participant may
request a distribution of all or a portion of the Participant's vested Account,
in a single lump sum, as soon as practicable following such
notification. Such distribution hereunder shall be made in shares of
the common stock of the Public Companies, as determined by the Committee;
provided, however, that the amount that may be distributed to a Participant by
reason of an Unforeseeable Emergency may not exceed the amount reasonably
necessary to satisfy the emergency need, as provided in Treasury Regulation
Section 1.409A-3(i)(3)(ii).
ARTICLE
V
AMENDMENT
OR TERMINATION
5.1 Amendment
or Termination. The Company reserves the right to amend or terminate
the Plan at any time and for any reason by action of the Committee.
5.2 Effect of
Amendment or Termination. No amendment or termination of the Plan
shall divest any Participant or beneficiary of the amounts credited to the
Participant’s Account, or of any rights to which the Participant would have been
entitled if the Participant had a Termination of Employment immediately prior to
the effective date of such amendment. Upon termination of the Plan,
distribution of Participants’ Accounts shall be made to Participants or their
beneficiaries in the manner elected by such Participants, unless the Company
determines to distribute all Accounts in some other manner.
ARTICLE
VI
GENERAL
PROVISIONS
6.1 Participants’
Rights Unsecured. The Plan at all times shall be entirely unfunded
and no provision shall at any time be made with respect to segregating any
assets of the Company for payment of any benefits hereunder. The
right of a Participant or the Participant’s beneficiary to receive a
distribution of the Participant’s Account hereunder shall be an unsecured claim
against the general assets of the Company, and neither the Participant nor a
beneficiary shall have any rights in or against any specific assets of the
Company.
6.2 No
Guaranty of Benefits. Nothing contained in the Plan shall constitute
a guaranty by Republic First or any other person or entity that the assets of
Republic First will be sufficient to pay any benefit hereunder. No
Participant or other person shall have any right to
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receive a
benefit or a distribution of Accounts under the Plan except in accordance with
the terms of the Plan.
6.3 No
Enlargement of Employee Rights. Establishment of the Plan shall not
be construed to give any Participant the right to be retained in the service of
Republic First.
6.4 Spendthrift
Provision. No interest of any person or entity in, or right to
receive a distribution under, the Plan shall be subject in any manner to sale,
transfer, assignment, pledge, attachment, garnishment, or other alienation or
encumbrance of any kind; nor may such interest or right to receive a
distribution be taken, either voluntarily or involuntarily for the satisfaction
of the debts of, or other obligations or claims against, such person or entity,
including claims for alimony, support, separate maintenance and claims in
bankruptcy proceedings.
6.5 Applicable
Law. The Plan shall be construed and administered under the laws of
the Commonwealth of Pennsylvania except to the extent preempted by federal
law.
6.6 Designation
of Beneficiary. A Participant may designate, in the form and manner
approved by the Committee, a beneficiary or beneficiaries to receive the
benefits payable after the Participant’s death under Section 4.1. In
the absence of a designated beneficiary, benefits payable upon a Participant's
death shall be paid to his or her estate.
6.7 Incapacity
of Recipient. Subject to applicable state law, if any person entitled
to a payment under the Plan is deemed by the Committee to be incapable of
personally receiving and giving a valid receipt for such payment, then the
Committee may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a payment
for the account of such person and a complete discharge of any liability of the
Company and the Plan.
6.8 Limitations
on Liability. Notwithstanding any other provision of the Plan, none
of the Company, Republic First Bank, any member of the Committee, any individual
acting as an employee or agent of the Republic First, or the Committee, shall be
liable to any Participant, former Participant or any beneficiary or other person
for any claim, loss, liability or expense incurred in connection with the
Plan.
6.9 Claims
Procedure. In the event that a Participant’s claim for benefits under
the Plan is denied in whole or in part by the Committee, the Committee will
notify the Participant (or beneficiary) of the denial. Such
notification will be made in writing, within 90 days of the date the claim is
received by the Committee. The notification will comply with
applicable Department of Labor regulations.
The
Participant (or beneficiary) has 60 days from the date he or she receives notice
of a claim denial to file a written request for review of the denial with the
Committee. The Committee will review the claim denial and inform the
Participant (or beneficiary) in writing of its decision within 60 days of the
date the claim review request is received by the Committee. Such
notification will comply with applicable Department of Labor
regulations. This decision will be final.
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6.10 Tax
Liability. Republic First may withhold from any payment of benefits
hereunder any taxes required to be withheld and such sum as such employer may
reasonably estimate to be necessary to cover any taxes for which Republic First
may be liable and which may be assessed with regard to such
payment.
6.11 Compliance
with Securities Laws. The Committee shall have the power to make the
crediting of amounts and deferral of Compensation under the Plan subject to such
conditions as it deems necessary or appropriate to comply with the then-existing
requirements of the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and the Investment Company Act of 1940, as amended, or
any applicable laws governing the offering and sale of securities in any other
jurisdiction.
6.12 USERRA. Notwithstanding
any provision of the Plan to the contrary, contributions, benefits and service
credit with respect to “qualified military service” will be provided in
accordance with section 414(u) of the Code.
REPUBLIC
FIRST BANCORP, INC.
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By: /s/
Harry D. Madonna
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Date: 12/31/09
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