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 (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 and
Chief Operating Officer of the Bank, 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 him. Executive shall report
from time to time or routinely, upon request, to the Chief
Executive Officer or her 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 Company Board 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 Eighteen Thousand and 00/100
Dollars ($218,000.00) 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. In addition to
Executive’s base salary, Executive will also be entitled to a
Twenty-Five Thousand and 00/100 Dollar ($25,000) signing bonus to
be paid in the first full payroll following Executive’s date
of hire and 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 the following: 25% on the
grant date and an additional 25% on each of the first through third
anniversaries of the grant date, 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 the Commencement Date (as defined in
Section 1.9 hereof).
1.5
Vacation . Executive shall be entitled to five weeks
of vacation during each year of employment (with vacation to be
prorated for 2005 based on the Commencement Date ), 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 and 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 service 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:
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(a)
making passive investments or serving as a fiduciary with respect
to direct family investments;
(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, in connection with his duties as
Executive Vice President and Chief Lending Officer, 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 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
(the “Commencement Date”) 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.
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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;
(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, 4.6, 4.8, 4.9 and 4.10 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 nine (9) month period
commencing on the date of termination (the “Severance
Period”), and (b) provide Executive with the medical and life
insurance coverage generally available to full-time employees
during the Severance Period or as required by law, whichever is
longer. 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
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Company and the Bank of his intent to terminate
for Good Reason stating the basis of the Good Reason sufficient to
permit the Company and the Bank to alleviate the basis of such Good
Reason 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 Bank or the Company 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 E
