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Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is between Bank
Rhode Island, a financial institution organized under the laws of
the State of Rhode Island with its executive offices located at One
Turks Head Place, Providence, Rhode Island 02903 (the "Bank"),
Bancorp Rhode Island, Inc., a corporation organized under the laws
of the State of Rhode Island and sole shareholder of the Bank (the
"Company"), and Jeffrey W. Angus of 1 Hines Farm Drive, Cumberland,
Rhode Island 02864 (the "Executive").
IT IS MUTUALLY AGREED by the parties as follows:
1.
Employment; Duties
1.1
Responsibilities and Authority . (a) The Bank
hereby employs Executive to serve as Executive Vice President of
the Bank in charge of operations and technology, and Executive
hereby accepts such employment. Executive shall have
the duties, responsibilities, authorities and powers normally
incident to such office. At all times, however,
Executive’s activities and authority with respect to such
offices will be subject to supervision, control and direction by
the Board of Directors of the Bank (the "Board"), by the Executive
Committee of the Board, and by the President and Chief Executive
Officer of the Bank (the "Chief Executive Officer") and Executive
agrees to carry out such duties and responsibilities as any of them
may from time to time reasonably assign to Executive.
Executive shall report from time to time or routinely, upon
request, to the Chief Executive Officer or the Chief Executive
Officer’s designee as to the current status of any of
Executive’s assigned duties and responsibilities.
(b)
The Company hereby employs Executive to serve as Vice President of
the Company and such other offices and positions as the Company may
determine, and Executive hereby accepts such employment.
Executive shall have the duties, responsibilities,
authorities and powers normally incident to such offices. At
all times, however, Executive’s activities and authority with
respect to such offices will be subject to supervision, control and
direction by the Board of Directors of the Company (the "Company
Board") or by the Executive Committee of the Company Board, and
Executive hereby agrees to carry out such duties and
responsibilities as either of them may from time to time reasonably
assign to Executive. Executive shall report from time to time
or routinely, upon request, to the Chief Executive Officer of the
Company or such Chief Executive Officer’s designee as to the
current status of any of Executive’s assigned duties and
responsibilities.
1.2
Compensation . The Bank shall pay Executive a base
salary at the rate of Two Hundred Twenty-Six Thousand Seven Hundred
Dollars ($226,700) per year commencing on the date hereof payable
on a bi-weekly basis, or at such higher rate as shall be determined
from time to time by the Board or the Compensation Committee of the
Board. In addition to Executive’s base salary,
Executive shall be entitled to receive payments under any incentive
compensation or bonus program (as in effect from time to time),
which the Bank may establish for its employees and/or senior
executives, in such amounts as are provided by such programs.
1.3
Employee Benefits . As a full-time employee of the
Bank, Executive shall be eligible to participate in any and all
employee benefit plans generally available to full-time employees
of the Bank, including non-contributory plans and, at
Executive’s option, contributory plans.
1.4
Certain Specified Employee Benefits .
(a)
Grant of Stock Options . Executive shall receive stock
options to purchase shares of the Company’s common stock in
such number, at an exercise price and on such other terms as may be
approved by the Compensation Committee of the Company Board, in its
sole discretion. Any such options will become exercisable on
a schedule no less favorable than generally provided with respect
to options granted to executives of the Bank (other than the Chief
Executive Officer), with such vesting to accelerate on a Change in
Control (as defined in Section 3.2).
(b)
Supplemental Executive Retirement Plan . Subject to
Executive’s insurability, Executive shall be entitled to
receive an annual benefit of Fifty Thousand and 00/100 Dollars
($50,000) under the Bank’s Supplemental Executive Retirement
Plan which benefit will vest at the rate of 20% per year commencing
on the fifth anniversary of May 1, 2005.
1.5
Vacation . Executive shall be entitled to five weeks
of vacation during each year of employment, such vacation to be
taken in accordance with the Bank’s customary vacation
policies and at such times and intervals as are mutually agreed
upon by Executive and the Bank. Executive shall be entitled
to holiday time and sick leave in accordance with the then existing
policies of the Bank, as in effect from time to time.
1.6
Reimbursement of Expenses . (a) Executive shall
be reimbursed by the Bank for reasonable business expenses incurred
by him incident to his employment upon presentation of appropriate
vouchers, receipts, and other supporting documents required by the
Bank.
(b)
Executive shall be reimbursed by the Company for reasonable
business expenses incurred by him incident to his employment by the
Company upon presentation of appropriate vouchers, receipts, and
other supporting documents required by the Company.
1.7
Duty to Perform Services . So long as Executive is
employed by the Company or the Bank, Executive agrees to devote his
full business and productive time, skill, and energy diligently,
loyally, effectively, and to the best of his ability to the
rendering of services to the Company and the Bank, and will exert
his best efforts in the rendering of such services. This provision
will not prohibit Executive from:
(a)
making passive investments or serving as a fiduciary with respect
to direct family investments;
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(b)
serving on the board of directors of any company, provided
that Executive shall not render any material services with
respect to the operations or affairs of any such company and
provided further that serving on such board of directors
does not otherwise violate the terms of this Agreement, including,
but not limited to, the provisions of Section 4.2 herein;
or
(c)
engaging in religious, charitable or other community or non-profit
activities which do not impair Executive’s ability to fulfill
his duties and responsibilities to the Company and Bank.
Executive agrees that in the rendering of all services to the
Company and the Bank and in all aspects of his employment, he will
comply with all directives, policies, standards, and regulations
from time to time established by the Company or the Bank or by
applicable law.
1.8
Death or Disability .
(a)
Death . In the event of Executive’s death during
the term of his employment under this Agreement, the Bank shall
immediately pay to Executive’s designated beneficiary any
salary accrued but unpaid as of the date of death. Upon
payment of the aforementioned sums, the Bank’s obligations to
make further salary payments shall terminate. This provision
shall not be construed to negate any rights Executive may have to
death benefits under any employee benefit or welfare plan of the
Company or the Bank in which he may from time to time be a
participant or under any other written agreement with the Company
or Bank which specifically provides for such benefits.
(b)
Disability . In the event of Executive’s
"disability" (as defined below) during the term of his employment
under this Agreement, the Bank shall continue to pay Executive his
base salary (reduced by any benefits Executive is entitled to
receive under any state or federal disability insurance program,
such as Rhode Island temporary disability insurance or federal
social security) for a period of six months from the date of
"disability". For purposes of this Agreement, "disability"
shall mean a good faith determination by the Board that Executive
is unable for any reason, either physical or mental, to perform the
duties required of him hereunder.
1.9
Term of Employment . The term of Executive’s
employment under this Agreement shall commence on the date hereof
and shall continue, unless sooner terminated pursuant to the
provisions of this Agreement, for a period of two years (the
"Term"), which Term shall automatically renew on each successive
one year anniversary hereafter commencing with the first
anniversary hereof unless any party shall have given written notice
to the other parties of such party’s election not to extend
the Term within ninety (90) calendar days prior to any anniversary
date.
1.10
Termination . This Agreement and the rights of the
parties hereunder will terminate (subject to the provisions of
Section 1.11 below) upon the occurrence of one of the
following:
(a)
Upon the Executive’s death or disability as provided in
Section 1.8 above;
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(b)
For Cause as provided in Section 3.5, immediately upon the giving
of notice by the Company or the Bank or at such later time as such
notice may specify or as may be required by Section 3.5;
(c)
At the election of the Executive for Good Reason (as hereinafter
defined) as provided in Section 2.2; or
(d) Upon
expiration of the Term, following notice by any party not to renew
the Term as provided in Section 1.9.
1.11
Termination and Survival . The provisions of Section
1.8, Sections 2 and 3 and Sections 4.1, 4.2, 4.4, 4.5, 4.6, 4.7,
4.8, 4.9, 4.10, 4.11 and 4.12 hereof shall remain in full force and
effect and shall continue to be enforceable in accordance with
their terms beyond termination of employment and beyond expiration
of this Agreement, except as otherwise agreed in writing by
Executive and the Company and the Bank.
2.
Severance .
2.1
Severance Benefit . In the event of a termination of
Executive’s employment by the Company or the Bank without
Cause (as such term is defined in Section 3.5) at any time, or in
the event of termination of Executive’s employment by him for
Good Reason (as defined in Section 2.2), the Bank will (a) continue
to pay Executive his base salary (the "Severance Benefit") then in
effect for a twelve (12) month period commencing on the date of
termination (the "Severance Period"), and (b) provide Executive (at
the Bank’s cost) with the medical, dental and life insurance
coverage generally available to full-time employees during the
Severance Period or as required by law, whichever is longer.
The Bank shall also provide Executive with outplacement assistance
for a period of six months at no charge. Notwithstanding
anything herein to the contrary, the Bank shall have no obligation
to pay the Severance Benefit to Executive in the event his
employment is terminated with Cause by the Company or the Bank or
voluntarily by him without Good Reason. Any Severance Benefit
paid under this Section 2.1 shall be credited against any amounts
due Executive under Section 3 as a result of a Change in
Control.
2.2
"Good Reason" Defined. For purposes of this Agreement "Good
Reason" shall mean the Company or the Bank giving written notice of
its election not to renew this Agreement on any anniversary date as
permitted under Section 1.9 and its failure to offer and
enter into a new employment agreement with Executive on terms which
are substantially similar to those of his employment existing
immediately prior to such notice of non-renewal (other than a
reduction of fringe benefits required by law or applicable to all
employees generally) provided, however, that Good Reason
shall not be deemed to have occurred unless prior to
Executive’s termination of employment for Good Reason, he
shall give not less than 30 days written notice to the Company and
the Bank of his intent to terminate for Good Reason stating the
basis of the Good Reason sufficient to permit the Company or the
Bank to alleviate the basis of such Good Reason
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prior to termination, and the Company and the
Bank have not done so within such 30 day period, and further
provided, that Executive’s continuing to work following
notice of non-renewal by the Company or the Bank and in the absence
of entering into a new employment agreement shall be without
prejudice to his right to claim termination for Good Reason, absent
written agreement between Executive and the Company or the Bank to
the contrary.
3.
Change in Control .
3.1
Purpose . In order to allow Executive to
consider the prospect of a Change in Control (as defined in Section
3.2) in an objective manner and in consideration of the services
rendered and to be rendered by him to the Company and the Bank, the
Bank is willing to provide, subject to the terms of this Agreement,
certain severance benefits to protect Executive from the
consequences of a Terminating Event (as defined in Section 3.4)
occurring subsequent to a Change in Control.
3.2
Change in Control . A "Change in Control" will
be deemed to have occurred if: (i) a Takeover Transaction is
effectuated; or (ii) the Company commences substantive negotiations
with a third party with respect to a Takeover Transaction if
within twelve (12) months of the commencement of such negotiations,
the Company enters into a definitive agreement with respect to a
Takeover Transaction with any party with which negotiations were
originally commenced; or (iii) any election of directors of the
Company occurs (whether by the directors then in office or by the
shareholders at a meeting or by written consent) where a majority
of the directors in office following such election are individuals
who were not nominated by a vote of two-thirds of the members of
the board of directors immediately preceding such election; or (iv)
either the Company or the Bank effectuates a complete
liquidation.
3.3
Takeover Transaction . A "Takeover
Transaction" shall mean:
(a) The
acquisition of voting securities of the Company by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than by the Company or its subsidiaries or any
employee benefit plan (or related trust) of the Company or its
subsidiaries, which theretofore did not beneficially own (within
the meaning of Rule 13d-3 promulgated under the Exchange Act),
securities representing 30
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