EXECUTIVE EMPLOYMENT
AGREEMENT
THIS AGREEMENT, made and entered
into as of January 20, 2005 (the “ Effective Date
”), by and among Royal Financial, Inc. (hereinafter referred
to as “ Royal Financial ”), Royal Savings Bank
(the “ Bank ” and together with Royal Financial,
hereinafter the “ Employer ”), and Kelly Wilson
(hereinafter called the “ Executive
”).
W I T N E S S E T H T
H A T :
WHEREAS , the Employer
desires to continue to employ the Executive as Vice President
– Operations/IT, and the Executive desires to continue in
such employment;
NOW, THEREFORE, in consideration of
the mutual promises herein contained and subject to the conditions
precedent set forth herein, the parties agree as
follows:
(a)
Employment . Royal Financial shall cause the Bank
to employ, and the Bank shall employ, the Executive as the Vice
President – Operations/IT of the Bank, and the Executive
shall so serve, for the term set forth in
Paragraph 1(b).
(b) Term
. The Executive’s employment under this Agreement
shall commence on the Effective Date and extend through
January 20, 2006, subject to the extension of such term as
hereinafter provided and subject to earlier termination as provided
in Paragraph 7. The term of this Agreement shall
automatically be extended for an additional year as
of January 20, 2006 and each anniversary date thereof unless,
no later than ninety (90) days prior to any such renewal date,
either the board of directors of Royal Financial (the “
Board ”), or a duly authorized committee thereof, on
behalf of the Employer, or the Executive gives written notice to
the other, in accordance with Paragraph 14, that the term of
this Agreement shall not be so extended.
2. Duties
and Responsibilities .
(a) The duties
and responsibilities of the Executive shall be of an executive
nature as shall be required by the Employer in the conduct of its
business. The Executive’s powers and authority
shall be as prescribed by the by-laws of the Employer, if
applicable, and shall include all those presently delegated to the
Executive, together with the performance of such other duties and
responsibilities as the Chief Executive Officer of the Employer may
from time to time assign to the Executive not inconsistent with the
Executive’s position(s) with the Employer. The
Executive recognizes, that during the period of the
Executive’s employment hereunder, the Executive owes an
undivided duty of loyalty to the Employer, and agrees to devote the
Executive’s entire business time and attention to the
performance of said duties and responsibilities and to use the
Executive’s best efforts to promote and develop the business
of the Employer. Recognizing and acknowledging that it
is essential for the protection and enhancement of the name and
business of the Employer and the goodwill pertaining thereto, the
Executive shall perform his duties under this Agreement
professionally, in accordance with the
applicable laws, rules and regulations and such
standards, policies and procedures established by the Employer and
the industry from time to time. The Executive will not
perform any duties for any other business without the prior written
consent of the Employer, but may engage in charitable, civic or
community activities, provided that such duties or activities do
not materially interfere with the proper performance of the
Executive’s duties under this Agreement.
(b)
Notwithstanding that this Agreement provides for the
employment of the Executive in the Executive’s capacity as
Vice President – Operations/IT of the Bank, nothing herein
contained shall assure the Executive of, nor in any manner shall be
construed to constitute an agreement by the Employer to the,
continued employment of the Executive after the expiration or
termination of this Agreement in such capacity or in any other
capacity.
3. Base
Salary . For services performed by the Executive for
the Employer pursuant to this Agreement during the period of
employment as provided in Paragraph 1(b) hereof, the Employer
shall pay the Executive a base salary at the rate of fifty-eight
thousand seven hundred ten dollars ($58,710) per year, payable in
substantially equal installments in accordance with the
Employer’s regular payroll practices. The
Executive’s base salary (with any increases under this
Paragraph 3) shall not be subject to reduction without the
Executive’s written consent. Any compensation
which may be paid to the Executive under any additional
compensation or incentive plan of the Employer or which may be
otherwise authorized from time to time by the Board (or an
appropriate committee thereof) shall be in addition to the base
salary to which the Executive shall be entitled under this
Agreement. Executive’s base salary shall be
subject to review from time to time, and the Employer may (but is
not required to) increase the base salary as the Board, in its
discretion, may determine.
4. Annual
Bonuses . For each fiscal year during the term of
employment, the Executive shall be eligible to receive a bonus in
the amount, if any, as may be determined from time to time by the
Board in its discretion.
5. Equity
Incentive Compensation . During the term of
employment hereunder, the Executive shall be eligible to
participate in any equity-based incentive compensation plan or
program adopted by the Employer.
6. Other
Benefits . In addition to the compensation described
in Paragraphs 3, 4 and 5, above, the Executive shall also be
entitled to the following:
(a)
Participation in Benefit Plans . The Executive
shall be entitled to participate in such life insurance,
disability, medical, dental, pension, profit sharing and retirement
plans and other programs as may be made generally available from
time to time by the Employer for the benefit of executives of the
Executive’s level or its employees generally.
(b)
Vacation . The Executive shall be entitled to
such number of days of vacation with pay during each calendar year
during the period of employment in accordance with the
Employer’s applicable personnel policy as in effect from time
to time.
(c)
Executive Perquisites . The Employer shall
furnish Executive with such perquisites as are provided from time
to time by the Employer to its officers generally and
are
suitable to the Executive’s position,
adequate for the performance of the Executive’s duties
hereunder, and reasonable in the circumstances.
(d) Expense
Reimbursement . The Employer shall reimburse the
Executive for all reasonable expenses incurred by the Executive in
performing services hereunder, which are incurred and accounted for
in accordance with the Employer’s policies and procedures
applicable thereto.
7.
Termination . Unless earlier terminated in
accordance with the following provisions of this Paragraph 7,
the Employer shall continue to employ the Executive and the
Executive shall remain employed by the Employer during the entire
term of this Agreement as set forth in
Paragraph 1(b). Paragraph 8 hereof sets forth
certain obligations of the Employer in the event that the
Executive’s employment hereunder is
terminated. Certain capitalized terms used in this
Paragraph 7 and in Paragraph 8 hereof are defined in
Paragraph 7(d), below. In the event of termination
of the Executive’s employment with the Employer for any
reason, or if the Executive is required by the Board, the Executive
agrees to resign, and shall automatically be deemed to have
resigned, from any offices (including any directorship) the
Executive holds with the Employer and/or any of its affiliates
effective as of the termination date of the Executive’s
employment hereunder, or, if applicable, effective as of a date
selected by the Board; provided, however, that the foregoing
resignation shall not prejudice or otherwise affect the
Executive’s rights and obligations, if any, under this
Agreement.
(a) Death or
Disability . Except to the extent otherwise provided
in Paragraphs 8, 11 and 12 with respect to death benefits and
certain post-Date of Termination obligations of the parties, this
Agreement shall terminate immediately as of the Date of Termination
in the event of the Executive’s death or in the event that
the Executive becomes Disabled (as hereinafter
defined). The Board shall promptly give the Executive
written notice of any such determination of the Executive’s
Disability and of any decision of the Board to terminate the
Executive’s employment by reason thereof. In the
event of Disability, until the Date of Termination, the base salary
payable to the Executive under Paragraph 3 hereof shall be
reduced dollar-for-dollar by the amount of disability benefits, if
any, paid to the Executive in accordance with any disability policy
or program of the Employer.
(b)
Discharge for Cause . In accordance with the
procedures hereinafter set forth, the Board may discharge the
Executive from the Executive’s employment hereunder for Cause
(as hereinafter defined). Except to the extent otherwise provided
in Paragraphs 8, 11 and 12 with respect to certain
post-Date of Termination obligations of the parties, this Agreement
shall terminate immediately as of the Date of Termination in the
event the Executive is discharged for Cause. Any
discharge of the Executive for Cause shall be communicated by a
Notice of Termination to the Executive given in accordance with
Paragraph 14 of this Agreement.
(c)
Termination for Other Reasons . The Employer may
discharge the Executive without Cause by giving written notice to
the Executive in accordance with Paragraph 14. The
Executive may resign from the Executive’s employment with or
without Good Reason, without liability to the Employer, by giving
written notice to the Employer in accordance with Paragraph 14
at least thirty (30) days prior to the Date of Termination;
provided,
however, that no resignation shall be treated as
a resignation for Good Reason unless the written notice thereof is
given within sixty (60) days after the occurrence which
constitutes “Good Reason” or during the ninety
(90) day period described in the final sentence of
Paragraph 7(d)(vi); provided, further, that the Employer
retains the right after proper notice of the Executive’s
voluntary termination to require the Executive to cease the
Executive’s employment immediately. Except to the
extent otherwise provided in Paragraphs 8, 11 and 12 with
respect to certain post-Date of Termination obligations of the
parties, this Agreement shall terminate immediately as of the Date
of Termination in the event the Executive is discharged without
Cause or resigns for any reason or no reason.
(d)
Definitions . For purposes of this Agreement, the
following capitalized terms shall have the meanings set forth
below:
(i) “
Accrued Obligations ” shall mean, as of the Date of
Termination, the sum of (A) the Executive’s base salary
under Paragraph 3 through the Date of Termination to the
extent not theretofore paid, (B) the amount of any deferred
compensation and other cash compensation accrued by the Executive
as of the Date of Termination to the extent not theretofore paid,
(C) any vacation pay, expense reimbursements and other cash
entitlements accrued by the Executive as of the Date of Termination
to the extent not theretofore paid, (D) any grants and awards
vested or accrued under any equity-based incentive compensation
plan or program and (E) all other benefits which have accrued
as of the Date of Termination. For the purpose of this
Paragraph 7(d)(i), except as provided in the applicable plan,
program or policy, amounts shall be deemed to accrue ratably over
the period during which they are earned, but no discretionary
compensation shall be deemed earned or accrued until it is
specifically approved by the Board in accordance with the
applicable plan, program or policy.
(ii) “
Cause ” shall mean (A) the Executive’s
willful and continued (for a period of not less than ten
(10) business days after written notice thereof) failure to
perform substantially the duties of his employment (other than as a
result of physical or mental incapacity, or while on vacation); or
(B) the Executive’s engaging in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Employer; or (C) the Executive’s conviction of a felony
involving moral turpitude; provided, however, that no act or
omission by the Executive shall constitute Cause hereunder unless
the Employer has given detailed written notice thereof to the
Executive, and the Executive has failed to remedy such act or
omission.
(iii) “
Change in Control ” shall mean the occurrence of any
one of the following events:
(A) Any
“person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended),
other than (i) a trustee or other fiduciary holding securities
under an employee benefit plan of Royal Financial or any of its
subsidiaries, or (ii) a corporation owned directly or
indirectly by the stockholders of Royal Financial in substantially
the same proportions as their ownership of stock of Royal
Financial, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of Royal Financial
representing 25% or more of the total voting power of the then
outstanding shares of capital stock of Royal Financial entitled to
vote generally in the election of directors (the “ Voting
Stock ”), provided, however, that the following shall not
constitute a change in control: (1) such person
becomes a beneficial owner of 25% or more of the Voting Stock as
the result of an acquisition of such Voting Stock directly from
Royal Financial, or (2) such person becomes a beneficial owner
of 25% or more of the Voting Stock as a result of the decrease in
the number of outstanding shares of Voting Stock caused by the
repurchase of shares by Royal Financial, or
(B) During any
period of two consecutive years, individuals (the “
Incumbent Board ”), who at the beginning of such
period constitute the Board, and any new director, whose election
by the Board or nomination for election by Royal Financial’s
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof, or
(C) Consummation
of a reorganization, merger or consolidation or the sale or other
disposition of all or substantially all of the assets of Royal
Financial (a “ Business Combination ”), in each
case, unless (1) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the
total voting power represented by the voting securities entitled to
vote generally in the election of directors of the corporation
resulting from the Business Combination (including, without
limitation, a corporation which as a result of the Business
Combination owns Royal Financial or all or substantially all of
Royal Financial’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to the Business Combination of the
Voting Stock of Royal Financial, and (2) at least a majority
of the members of the board of directors of the corporation
resulting from the Business Combination were members of the
Incumbent Board at the time of the execution of the initial
agreement, or action of the Incumbent Board, providing for such
Business Combination; or
(D) Approval by
the stockholders of Royal Financial of a plan of complete
liquidation or dissolution of Royal Financial.
The Board has final authority to construe and
interpret the provisions of the foregoing Paragraphs (A), (B),
(C) and (D) and to determine the exact date on which a Change in
Control has been deemed to have occurred thereunder.
(iv) “
Date of Termination ” shall mean (A) in the event
of a discharge of the Executive for or without Cause, the date the
Executive receives a Notice of Termination, or any later date
specified in such Notice of Termination, as the case may be,
(B) in the event of a resignation by the Executive, the date
specified in the written
notice to the Employer, which date shall be no
less than thirty (30) days from the date of such written
notice (or such earlier date as the Employer may elect in its sole
discretion), (C) in the event of the Executive’s death,
the date of the Executive’s death, and (D) in the event
of termination of the Executive’s employment by reason of
Disability pursuant to Paragraph 7(a), the date the Executive
receives written notice of such termination.
(v) “
Disabled ” and “ Disability ” shall
mean that the Executive will be deemed to be disabled upon the
earlier of (i) the end of a six (6) consecutive month period,
or an aggregate period of nine (9) months out of any
consecutive twelve (12) months, during which, by reason of
physical or mental injury or disease, the Executive has been unable
to perform substantially all of the Executive’s usual and
customary duties under this Agreement or (ii) the date that a
reputable physician selected by the Board, and as to whom the
Executive has no reasonable objection, determines in writing that
the Executive will, by reason of physical or mental injury or
disease, be unable to perform substantially all of the
Executive’s usual and customary duties under this Agreement
for a period of at least six (6) consecutive
months. If any question arises as to whether the
Executive is Disabled, upon reasonable request therefore by the
Board, the Executive shall submit to a reasonable medical
examination for the purpose of determining the existence, nature
and extent of any such disability.
(vi) “
Good Reason ” shall mean the occurrence, other than in
connection with a discharge, of any of the following without the
Executive’s consent: (A) the Executive is not
re-elected or is removed from the positions with the Employer set
forth in Paragraph 1(a), other than as a result of the
Executive’s election or appointment to positions of equal or
superior scope and responsibility; or (B) the Executive shall
fail to be vested by the Employer with the power and authority of
any of said positions, excluding for this purpose any isolated
action not taken in bad faith and which is remedied by the Employer
promptly after receipt of written notice thereof given by the
Executive in accordance with Paragraph 14; or (C) any
failure by the Employer to materially comply with any of the
provisions of this Agreement, other than any isolated,
insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Employer promptly after receipt of
written notice thereof given by the Executive in accordance with
Paragraph 14; or (D) the Employer requiring the Executive
to be based at an office or location which is more than twenty
(20) miles from any location of Royal Financial, the Bank or
any of their subsidiaries as of the Effective Date or any renewal
date of the extended term of this Agreement. In
addition, any termination by the Executive during the ninety
(90) day period beginning on the first anniversary of the date
of a Change in Control shall be deemed to be for “Good
Reason.”
(vii) “
Notice of Termination ” shall mean a written notice
which (A) indicates the specific termination provision in this
Agreement relied upon, (B) sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so
indicated and (C) if the Date of Termination is to be other
than the date of receipt of such notice or the date otherwise
specified under this Agreement, specifies the termination
date.
8.
Obligations of the Employer Upon Termination
. The following provisions describe the obligations of
the Employer to the Executive under this Agreement upon termination
of employment. However, except as explicitly provided in
this Agreement, nothing in
