Exhibit 10.2(b)
FIDELITY FEDERAL BANK &
TRUST
CHANGE IN CONTROL
AGREEMENT
FOR
RICHARD D. ALDRED
This CHANGE IN CONTROL AGREEMENT
(“Agreement”) is made effective as of December 20,
2005 by and between a Fidelity Federal Bank & Trust, a
federally chartered stock savings bank (the “Bank”),
and Richard D. Aldred (the “Executive”). Any reference
to “Company” herein shall mean Fidelity Bankshares,
Inc., or any successor thereto.
WHEREAS, the Bank and the Executive
had previously entered into a Change in Control Agreement effective
as of January 1, 2004; and
WHEREAS, the Bank recognizes the
substantial contribution the Executive has made to the Bank and
wishes to protect his position therewith for the period provided in
this Agreement; and
WHEREAS, the Executive has been
elected to, and has agreed to serve in the position of Executive
Vice President, Chief Financial Officer and Treasurer for the Bank,
a position of substantial responsibility; and
WHEREAS, the Executive is deemed a
“Specified Employee” for purposes of new
Section 409A of the Internal Revenue Code (“Code”)
and the payments under this Change in Control Agreement are deemed
to be “deferred compensation,” such that the Agreement
is required to be modified to conform to the requirements of Code
Section 409A.
NOW, THEREFORE, in consideration of
the contribution of the Executive, and upon the other terms and
conditions hereinafter provided, the parties hereto agree as
follows:
1. TERM OF
AGREEMENT
The term of 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. Commencing on the first anniversary date of this
Agreement (“Anniversary Date”) and continuing at each
Anniversary Date thereafter, the Board of Directors of the Bank
(the “Board”) may extend the Agreement for an
additional year. The Board will conduct a performance evaluation of
the Executive for purposes of determining whether to extend the
Agreement, and the results thereof shall be included in the minutes
of the Board’s meeting.
2. PAYMENTS TO EXECUTIVE UPON
CHANGE IN CONTROL
(a) Upon the occurrence of a Change
in Control of the Bank or the Company (as herein defined) the
provisions of Section 3 shall apply.
(b) A “Change in
Control” of the Bank or the Company shall mean (i) a
change in ownership of the Bank or the Company under paragraph
(a) below, or (ii) a change in effective control of the
Bank or the Company under paragraph (b) below, or (iii) a
change in the ownership of a substantial portion of the assets of
the Bank or the Company under paragraph (c) below:
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(a)
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Change in the
ownership of the Bank or the Company. A change in the ownership of
the Bank or the Company shall occur on the date that any one
person, or more than one person acting as a group (as defined in
Proposed Treasury Regulation Section 1.409A-3(g)(5)(v)(B)),
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.
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(b)
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Change in the
effective control of the Bank or the Company. A change in the
effective control of the Bank or the Company shall occur on the
date that either (i) any one person, or more than one person
acting as a group (as defined in Proposed Treasury Regulation
Section 1.409A-3(g)(5)(v)(B)), 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 this sub-section
(ii) is inapplicable where a majority shareholder of the Bank
or the Company is another corporation.
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(c)
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Change in the
ownership of a substantial portion of the Bank or the
Company’s assets. A change in the ownership of a substantial
portion of the Bank or the Company’s assets shall occur on
the date that any one person, or more than one person acting as a
group (as defined in Proposed Treasury Regulation
Section 1.409A-3(g)(5)(v)(B)), 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 (i) all of the assets
of the Bank or the Company, or (ii) the value of the assets
being disposed of, either of which is determined without regard to
any liabilities associated with such assets.
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(d)
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For all
purposes hereunder, the definition of Change in Control shall be
construed to be consistent with the requirements of Proposed
Treasury Regulation Section 1.409A-3(g), except to the extent
that such proposed regulations are superseded by subsequent
guidance.
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(c) The Executive shall not have the
right to receive benefits pursuant to Section 3 hereof in the
event of Termination for Cause prior to the Change in Control. The
term “Termination for Cause” shall mean termination
because of the Executive’s intentional failure to perform
stated duties, personal dishonesty, incompetence, willful
misconduct, any breach of fiduciary duty involving personal profit,
willful violation of any law, rule, regulation (other than traffic
violations or similar offenses) or final cease and desist order, or
any material breach of any material provision of this Agreement. In
determining incompetence, the acts or omissions shall be measured
against standards generally prevailing in the savings institution
industry. For purposes of this paragraph, no act or failure to act
on the part of the Executive shall be considered
“willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of
the Bank. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for Cause unless and until there
shall have been delivered to him a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths of
the members of the Board at a meeting of the Board called and held
for that purpose (after reasonable notice to the Executive and an
opportunity for him, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, the
Executive was guilty of conduct justifying Termination for Cause
and specifying the particulars thereof in detail. The Executive
shall not have the right to receive compensation or other benefits
for any period after Termination for Cause. Any stock options
granted to Executive under any stock option plan of the Bank, the
Company or any subsidiary or affiliate thereof, shall become null
and void effective upon Executive’s Termination for Cause,
and shall not be exercisable by Executive at any time subsequent to
such Termination for Cause.
3. CHANGE IN CONTROL
BENEFITS
Upon the occurrence of a Change in
Control, the Bank shall be obligated to pay the Executive, or in
the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, the
following:
(a) a payment equal to three times
the sum of (i) the highest rate of base salary, and
(ii) highest rate of bonus awarded to the Executive during the
prior three years, subject to applicable withholding taxes. The
payment shall be made in a lump sum on the effective date of the
Change in Control. Such payments shall not be reduced in the event
Executive obtains other employment following the Change in
Control;
(b) for so long as Executive is
employed by the Bank and/or Company, and continuing for a period of
thirty-six (36) months following termination of employment,
continued life insurance coverage for Executive and health care
coverage (including dental) for Executive and Executive’s
dependents at the Bank’s own expense (at the end of which,
Executive shall be entitled to elect the maximum continued health
care coverage available in accordance with the COBRA provisions of
Section 4980B of the Code) and such coverage shall be
substantially identical to the coverage maintained by the Bank or
the Company for the Executive prior to the Change in
Control;
(c) any outstanding unvested stock
options or shares of restricted stock of the Company that have been
awarded to Executive shall become fully vested as of the Change in
Control;
(d) at the time of or within sixty
(60) days (or within such shorter period to the extent that
information can be reasonably obtained) following the Change in
Control, a lump sum payment in an amount equal to the present value
of the Bank’s contributions that would be made on
Executive’s behalf under the Bank’s 401(k) Plan and
employee stock ownership plan (and any other defined contribution
plan maintained by the Bank) if he con
