EXHIBIT 10.3
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 Alan Bird
(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 Senior Vice President –
Investments, 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:
1. Employment and Term
.
(a) Employment . Royal
Financial shall, and shall cause the Bank to, employ the Executive
as the Senior Vice President – Investments of the Company and
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 Senior Vice President –
Investments of the Company and 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 twenty-eight thousand two hundred
fifty-one dollars ($28,251) 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.
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(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,
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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
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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
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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.
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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 this Agreement shall limit
or otherwise adversely affect any rights which the Executive may
have under applicable law, under any other agreement with the
Employer or any of its affiliates or subsidiaries, or under any
co
