Exhibit 10.7
 

AGREEMENT

REPUBLIC FIRST BANCORP, INC.

AND

VERNON W. HILL, II

EFFECTIVE DATE:  MARCH 9, 2017

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AGREEMENT
TABLE OF CONTENTS

BACKGROUND
1
1.
Term of Service
1
1.1
Five-Year Term
1
1.2
Conditions to Term
1
1.3
"Term" Definition. 
2
1.4
"Anniversary Date" Definition
2
2.
Services and Duties
2
2.1
Offices
2
2.2
Duties
2
3.
Compensation
2
3.1
Compensation Definition
2
3.2
Base Compensation
2
3.3
Plans and Programs
3
3.4
Year
3
3.5
Compensation Pro-Ration
3
4.
Fringe and Other Benefits
3
4.1
Other Benefits
3
4.2
Expenses
3
4.3
Indemnity
3
5.
Disability and Death Compensation
3
5.1
Permanent Disability
3
5.2
Disability Compensation
3
5.3
Death Compensation
4
6.
Termination "For Cause" by the Company
4
6.1
"For Cause" Termination
4
6.2
"For Cause" Definition
5
6.3
Compensation on Termination "For Cause"
5
7.
Termination "Without Cause" by the Company
5
7.1
"Without Cause" Termination
5
7.2
"Without Cause" Definition
5
7.3
Compensation for Termination "Without Cause"
5
8.
Termination "For Good Reason" by Hill
6
8.1
"Good Reason" Termination
6
8.2
Compensation for "Good Reason" Termination
6
9.
"Change in Control" and "Good Reason"
6
9.1
Change in Control Definition
6
9.2
Good Reason Definition
7
10.
Additional Payments/Excise Taxes
8
10.1
Gross-Up Payment
8
10.2
Gross-Up Payment Determination
8
10.3
Notice of IRS Claim
9
10.4
Refund
11

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11.
Other Rights for Termination "Without Cause" or "For Good Reason"
11
11.1
Other Benefits
11
11.2
Plans and Program Rights
11
11.3
No Mitigation by Hill
11
12.
Source of Payment and Timing
11
12.1
Source
12
12.2
Time
12
13.
Interest
12
14.
Reimbursement of Enforcement Expenses
12
14.1
Failure to Pay
12
14.2
Failure to Provide
12
14.3
Further Conditions for Reimbursement
12
15.
Confidential Information and Non-Competition
13
15.1
Confidentiality
13
15.2
The Company's Interests
13
15.3
Non-Competition and Time of Restrictions
13
15.4
Remedies
14
15.5
Enforceability
15
15.6
The Company Definition
15
16.
Successions
15
16.1
Successors/Assigns/Heirs
15
16.2
Death
15
16.3
Combinations
15
17.
Notices
15
17.1
Form of Notice
15
17.2
Place of Notice
16
18.
General Provisions
16
18.1
Entire Agreement
16
18.2
Amendments, Waivers and Termination
16
18.3
Alternate Payments
16
18.4
Benefits and Insurance
16
18.5
"Person" Definition
17
18.6
Counterparts
17
18.7
No Waiver
17
18.8
Assignment
17
18.9
Pennsylvania Jurisdiction
17
18.10
Headings
17
18.11
Notice of Dispute and Cure
17
18.12
Pennsylvania Law
17

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AGREEMENT

This Agreement ("Agreement") is dated effective as of March 9, 2017, by and
between:

Ø
REPUBLIC FIRST BANCORP, INC. (the "Company"), a Pennsylvania corporation,

 
and
 

Ø
VERNON W. HILL, II ("Hill").

 
BACKGROUND
 
A. Hill is the Chairman ("Chairman") of Republic First Bancorp, Inc., a
Pennsylvania corporation.
 
B. The Board of Directors of the Company (the "Board") has determined that the
services of Hill will be of value to the Company and the Company's other present
and future subsidiaries, and has authorized this Agreement.
 
C. Accordingly, the Board wishes to have Hill's services available to the
Company for at least five (5) years and to provide supplemental benefits to Hill
should his services with the Company terminate under certain circumstances or
should he die or become disabled before the termination of this Agreement.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained here, and intending to be legally bound, the Company and Hill agree as
follows:

1.
Term of Service.

 
1.1 Five-Year Term.  The Company offers, and Hill accepts engagement on all the
terms and conditions of this Agreement, for a term of five (5) years beginning
on the date stated above.
 
1.2 Conditions to Term.  This five-year term is subject to:
 
(a)  Automatic Renewal and Extension.  On each Anniversary Date, this Agreement
and Hill's engagement shall automatically be renewed and extended (on the same
terms and conditions) for a new five-year term unless written notice of
Termination at Anniversary is given pursuant to Section 1.2(b) below.
 
(b) Termination at Anniversary.  Either the Company or Hill may terminate this
Agreement on any Anniversary Date by giving to the other party written notice of
termination no later than November 1 before any such Anniversary Date.  If such
prior notice is given to either party, then the Term will have four (4) years
remaining after the applicable Anniversary Date, subject to the terms and
conditions of this Agreement.
 
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(c) Termination for Other Reasons.  This Agreement may be terminated on Death,
"For Cause", "Without Cause", or for "Good Reason" as described in Sections 5-8
below.
 
1.3 "Term" Definition.  "Term" means the original five-year services period, as
well as any renewed or extended periods as provided for in this Agreement.
 
1.4 "Anniversary Date" Definition.  "Anniversary Date" means March 9, 2017, as
well as each annual March 9 thereafter if this Agreement is automatically
renewed or extended.
 

2.
Services and Duties.

 
2.1 Offices.  During the Term, Hill shall serve as Chairman of the Board of
Directors of the Company.
 
2.2 Duties.  As the Chairman of the Board of the Company, Hill shall preside
over all Board and shareholder meetings and perform such other functions as
required of a public company Chairman and such other duties as the Board may
require.
 
(a) Required Time and Best Efforts.  Hill accepts such duties, will devote such
time as shall be reasonably necessary to perform his duties and best efforts to
the business and affairs of the Company and its subsidiaries, and will use his
best efforts to promote the interests of the Company and its subsidiaries.
 
(b) Outside Activities.  Hill also has participated in and shall have discretion
to participate in other outside activities.  Such outside activities are
expressly permitted, and shall be in addition to and notwithstanding Hill's
obligations and best efforts as described in Section 2.2(a).
 

3.
Compensation.

 
3.1 Compensation Definition.  "Compensation" means the sum of the highest annual
rate of compensation (described in Section 3.2) and highest cash bonus
(described in Section 3.3) paid to Hill during the most recent twenty-four (24)
months of the Term.
 
3.2 Base Compensation.  The Company shall pay Hill "base compensation" at the
rate of not less than $360,000 per year for all services to be rendered by him
under this Agreement and for all positions held by him during the Term.
 
(a) Payment.  Compensation is payable on the first day of each month in advance.
 
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(b) Adjustment.  Base compensation is subject to an annual review and such
upward adjustments as may be deemed appropriate by the Board or a
Board-designated Committee.  The Board or such Committee may recommend an
increase in base compensation for Hill, but shall have no obligation to do so. 
Base compensation may not be decreased without Hill's written consent.
 
3.3 Plans and Programs.  During the Term, Hill shall be entitled to participate
in any cash or other bonus programs, incentive compensation plans, stock option
plans or similar benefit or compensation programs now or later in effect that
are generally made available to Board members and executive officers of the
Company.
 
(a) Pro-Ration.  For any period less than a full year during the Term, Hill
shall receive an amount equal to the prorated portion of any payment pursuant to
such plan or program.
 
3.4 Year.  A "year" commences on March 9, 2017 and on March 9 of each subsequent
calendar year.
 
3.5 Compensation Pro-Ration.  Compensation for a portion of a year shall be
pro-rated.
 

4.
Fringe and Other Benefits.  During the Term, Hill shall also be entitled to:

 
4.1 Other Benefits.  Such other fringe benefits as the Company shall deem
appropriate.

4.2 Expenses.  Reimbursement by the Company for all expenses incurred by Hill
which the Company determines to be reasonable and necessary (in accord with its
normal reimbursement practices now or later in effect) for Hill to carry out his
duties under this Agreement; and
 
4.3 Indemnity.  Indemnification by the Company to the fullest extent permitted
by governing law and in accord with the Company's bylaws and policies, against
all claims concerning Hill's status as Chairman of the Company.
 

5.
Disability and Death Compensation.

 
5.1 Permanent Disability.  Hill shall be deemed to have become "permanently
disabled" upon his failure to render services of the character contemplated by
this Agreement, because of his physical or mental illness or other incapacity
beyond his control, other than his death, for a continuous period of 6 months,
or for shorter periods aggregating more than 9 months in any 18 consecutive
months.
 
5.2 Disability Compensation.  The Company shall compensate Hill for the balance
of the Term at a rate equal to 70% of his Compensation at the time Hill becomes
permanently disabled while employed during the Term.
 
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(a) Monthly Disability Payments.  The Company shall make the payments due under
this Section 5.2 on the first day of each month, starting with the first day of
the month following the month in which Hill is deemed to be permanently
disabled, in an amount equal to 1/12 of 70% of Hill's Compensation at the time
he is deemed to be permanently disabled.
 
(i) Insurance Reductions.  Monthly Disability Payments shall be reduced each
month, however, by the amount of any disability payments made to Hill under any
Company-sponsored disability insurance plan.  The amount of the reduction under
the preceding sentence shall be computed as if Hill had elected to receive
monthly payments of disability benefits (regardless of the actual payment
frequency).
 
(b) Disability Benefits.  After becoming permanently disabled as provided in
this Section 5, Hill shall nonetheless continue until the end of the Term to be
entitled to receive at the Company's expense such group hospitalization
coverage, life insurance coverage and disability coverage as is generally made
available from time to time to executive officers of the Company, if and to the
extent permitted by the respective insurers of such coverage.
 
(c) Partial Disability Compensation.  Hill shall continue to receive his full
Compensation if he is partially disabled and until such time as Hill is deemed
to be permanently disabled.
 
5.3 Death Compensation.  If Hill dies during the Term, then:
 
(a) Termination of Services and Regular Compensation.  Hill's rights to
Compensation described above shall automatically terminate at the close of the
calendar week in which death occurs; and
 
(b) Death Benefit.  The Company shall pay to such person as Hill shall designate
in a notice filed with the Company or, if no such person shall be designated, to
his estate, in addition to his full Compensation due under Section 5.3(a), a
lump sum "Death Benefit" in an amount equal to the product of three (3) times
Hill's Compensation at the time of his death.
 

6.
Termination "For Cause" by the Company.

 
6.1 "For Cause" Termination.  The Company shall have the right at any time to
terminate Hill's services "For Cause" only if:
 
(a) Prior Written Notice.  The Company shall give Hill not less than thirty (30)
days prior written notice of its intention to terminate his services specifying
in detail the reason(s) for such termination and the date of termination; and
 
(b) Failure to Cure.  After receipt of such notice, Hill fails to cure, cease or
remedy the reason(s) for such termination before the date of termination stated
in such notice.
 
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6.2 "For Cause" Definition.  "For Cause" means only the following at any time
during the Term:
 
(a) Conviction or Plea.  If Hill is convicted of or enters a plea of guilty or
nolo contender to, a felony, a crime of falsehood or a crime involving fraud,
moral turpitude or dishonesty; or
 
(b) Willful Violation.  If Hill willfully violates any of the terms or
provisions of this Agreement, including, without limitation:
 
(i) Hill's willful failure to perform his duties in Section 2.2 above and this
Agreement or the Board's instructions after written notice of such instructions
(other than any such failure resulting from Hill's incapacity due to illness or
disability); or
 
(ii) Hill engages in any conduct materially harmful to the Company's business.
 
6.3 Compensation on Termination "For Cause".  The Company shall pay Hill any
prorated portion of his full Compensation that is then owed through the date of
termination if Hill's services shall terminate "For Cause" and the Company shall
have no further obligations to Hill under this Agreement other than to pay Hill
such other plan, program, or other benefits as may be due Hill pursuant to
Sections 3.3 and 4 above.
 

7.
Termination "Without Cause" by the Company.

 
7.1 "Without Cause" Termination.  The Company shall have the right to terminate
Hill's services "Without Cause" by giving not less than thirty (30) days prior
written notice of its intention to terminate his services "Without Cause"
pursuant to this Section 7.
 
7.2 "Without Cause" Definition.  Termination "Without Cause" means any reason
other than by either Termination "For Cause" (Section 6 above), or Termination
at Anniversary (Section 1.2(b) above).
 
7.3 Compensation for Termination "Without Cause".  The Company shall pay Hill
the following if the Company terminates Hill's services "Without Cause":
 
(a) Compensation through Termination Date.  Any pro-rated portion of his full
Compensation through the date of termination; and
 
(b) "Without Cause Severance Payment".  A lump sum severance payment (the
"Without Cause Severance Payment") in lieu of any further Compensation payments
to Hill after the date of termination.
 
(i) "Without Cause Severance Payment" means the sum of Hill's full Compensation
that would still be remaining until the end of the then Term had Hill continued
to be employed by the Company to the end of the then Term.
 
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8.
Termination "For Good Reason" by Hill.

 
8.1 "Good Reason" Termination.  Hill shall have the right to terminate his
services "For Good Reason" (as defined in Section 9.2 below) if:
 
(a) Prior Written Notice.  Hill shall first give the Company not less than
thirty (30) days prior written notice of his intention to terminate his services
specifying the reason(s) for such termination and the date of termination;
 
(b) Failure to Cure.  After receipt of such notice, if the Company fails to
cure, cease or remedy the reason(s) for such termination before the date of
termination stated in such notice; and
 

8.2 Compensation for "Good Reason" Termination.  The Company shall pay to Hill
the following if Hill terminates his services "For Good Reason" (defined in
Section 9.2):
 
(a) Compensation through Termination Date.  Hill's full Compensation through the
termination date; and
 
(b) "Good Reason Severance Payment".  A lump sum "Good Reason Severance Payment"
in lieu of any further Compensation payments to Hill after the date of
termination.
 
(i) "Good Reason Severance Payment" means a lump sum equal to four (4) times
Hill's Compensation immediately preceding such termination.
 

9.
"Change in Control" and "Good Reason".

 
9.1 Change in Control Definition.  "Change in Control" or "Change of Control"
means a change in control of the Company of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor provisions under the Exchange Act, whether or not the
Company is subject to such reporting requirement; provided that, without
limitation, such a change in control shall have been deemed to occur
conclusively when any of the following events shall have occurred without Hill's
prior written consent:
 
(a) Board Change.  Within any period of two (2) consecutive years during the
Term, there is a change in at least a majority of the members of the Board or
the addition of four or more new members to the Board, unless such change or
addition occurs with the affirmative vote in writing of Hill in his capacity as
a director or a shareholder; or
 
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(b) Beneficial Ownership Change.  A Person or group acting in concert as
described in Section 13(d)(2) of the Exchange Act holds or acquires beneficial
ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of
a number of common shares of the Company which constitutes either:
 
(i) more than fifty (50%) percent of the shares which voted in the election of
directors of the Company at the shareholders' meeting immediately preceding such
determination; or
 
(ii) more than thirty (30%) percent of the Company's outstanding common shares. 
For this Section 9.1(b)(ii), unexercised warrants or options or unconverted
nonvoting securities shall count as constituting beneficial ownership of the
Company's common shares into which the warrants or options are exercisable or
the nonvoting convertible securities are convertible, notwithstanding anything
to the contrary contained in Rule 13d-3 of the Exchange Act.
 
9.2 Good Reason Definition.  "Good Reason" means:
 
(a) Both a Change in Control and Other Reductions.  Both a "change in control"
of the Company (as defined in Section 9.1 above); and if any of the following
"Other Reductions" occur within three (3) years after such change in control
without Hill's prior written consent:
 
(i) Reduction of Authority.  The nature and scope of Hill's authority with the
Company or a surviving or acquiring Person are materially reduced to a level
below that which he enjoys when the change in control occurs;
 
(ii) Materially Inconsistent Duties.  The duties and responsibilities assigned
to Hill are materially inconsistent with that which he enjoys when the change in
control occurs;
 
(iii) Materially Reduced Benefits.  The fringe benefits which the Company
provides Hill are materially reduced to a level below that which he enjoys when
the change in control occurs;
 
(iv) Reduction of Position or Title.  Hill's position or title with the Company
or the surviving or acquiring Person is reduced from his current position or
title with the Company when the change in control occurs; or
 
(v) Transfer or Offices and Relocation.  Any relocation or transfer of the
Company's principal executive offices to a location more than fifty (50) miles
from Hill's principal residence on the date when the change in control occurs;
or, if Hill is required, without his prior written consent, to relocate more
than fifty (50) miles from his principal residence when the change in control
occurs.
 
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(b) Material Breaches.  The Company materially breaches this Agreement; or
 
(c) Non-Assumption.  There is a failure or refusal of any successor to the
Company to assume all duties and obligations of the Company under this
Agreement.
 
(d) Failure to be Elected to Board.  In the event Hill is not nominated or
elected to serve on the Board of Directors of the Company.
 

10.
Additional Payments/Excise Taxes.

 
10.1 Gross-Up Payment.  Notwithstanding anything in this Agreement to the
contrary or any termination of this Agreement, Hill shall be entitled to receive
an additional payment (a "Gross-Up Payment") if:
 
(a) Tax is Determined Due.  It shall be determined that any payment or
distribution or benefit made or provided by the Company or its affiliates to or
for the benefit of Hill, whether pursuant to this Agreement or some other plan
or otherwise, including income recognized by the exercise of options to buy the
Company stock, and determined without regard to any additional payments required
under this Section 10 (a "Payment"), would be an excess Parachute Payment that
is not deductible by the Company for federal income tax purposes and subject to
an excise tax; or
 
(b) Interest or Penalties are Incurred.  Any interest or penalties are incurred
by Hill concerning such excise tax.
 
(i) Excise Tax Definition.  "Excise Tax" means both:  any excise tax imposed on
any Compensation payments due to Hill – including Death Benefit, Compensation
for Termination "Without Cause" or "For Good Reason" under Sections 5.3(b), 7.3
or 8.2 above – because of Section 280G and Section 4999 of the Internal Revenue
Code of 1986 as amended (the "Code") or any successor Code provision, or any
state or local law; and interest or penalties incurred concerning such excise
tax.
 
(ii) Gross-Up Payment Definition.  "Gross-Up Payment" means any amount of
additional payments to Hill that are needed so that Hill incurs no out-of-pocket
expense for Excise Taxes, and to place Hill in the same position after all
federal and state taxes – including all income tax, Excise Tax, services or
other tax or any penalties and interest – that Hill would have been in if:
(a) Hill did not have to pay the Excise Tax; (b) the Excise Tax did not apply
for reasons other than Sections 280G and 4999 of the Code; and (c) Hill did not
have to pay any interest or penalty charge for the imposition of any portion of
the Excise Tax.
 
10.2 Gross-Up Payment Determination.  All determinations required to be made
under this Section 10, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment, the calculations under Section
280G and 4999 of the Code, and the assumptions to be used in arriving at such
determination, shall be made by the Company's independent auditor or another
nationally recognized accounting firm chosen by the auditor with the consent of
the Company and Hill (the "Accounting Firm").
 
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(a) Cooperation.  The Company and Hill shall cooperate with Accounting Firm and
provide information needed for the determination.
 
(b) Calculations.  Accounting Firm shall provide detailed supporting
calculations both to the Company and Hill within fifteen (15) business days of
the receipt of notice from Hill that there has been a Payment or receipt of
Notice of IRS claim under Section 10.3, or such earlier time as is requested by
the Company.
 
(c) Fees and Expenses.  The Company shall pay all fees and expenses of the
Accounting Firm for services for this determination.
 
(d) Payment Timing.  The Company shall pay any Gross-Up Payment, as determined
pursuant to this Section 10, to Hill within five (5) days of the receipt of the
Accounting Firm's determination.
 
(e) Binding Effect.  Any determination by the Accounting Firm shall be binding
upon the Company and Hill.
 
(f) Possible Underpayment.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm, it is possible that the Company may not make Gross-Up Payments
that should be made ("Underpayment").
 
(i) Determination.  If the Company exhausts its remedies pursuant to Section
10.3 and Hill is later required directly or indirectly, to make a payment of any
Excise Tax, then the Accounting Firm shall determine the amount of the
Underpayment that has occurred.  Such amount shall be sufficient to put Hill in
the same position after all federal and state taxes – including all income tax,
Excise Taxes, employment, or other taxes, and all penalties and interest on such
taxes – as Hill would have been in if there had been no Underpayment and the
Company had made appropriate Gross-Up Payment in the first instance.
 
(ii) Payment.  The Company shall promptly pay to Hill or for the benefit of Hill
any amounts determined by Accounting Firm to be needed to satisfy any
Underpayment.
 
10.3 Notice of IRS Claim.  Hill shall notify the Company in writing of any claim
by the Internal Revenue Service ("IRS") that, if successful, would require the
payment by the Company of the Gross-Up Payment.
 
(a) Time and Content of Notice.  Such notification shall be given as soon as
practicable but not later than ten (10) business days after Hill is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid.
 
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(b) Payment Timing.  Hill shall not pay such IRS claim until thirty (30) days
after the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes on such claim is due).
 
(c) Contest Notice.  If the Company notifies Hill in writing before the
expiration of such thirty (30) day period that it desires to contest such IRS
claim, then Hill shall:
 
(i) Give the Company any information reasonably requested by the Company
relating to such IRS claim;
 
(ii) Take such action in connection with contesting such IRS claim as the
Company shall reasonably request in writing, including, without limitation,
accepting legal representation for such IRS claim by any attorney reasonably
selected by the Company.
 
(iii) Cooperate with the Company in good faith in order to effectively contest
such IRS claim; and
 
(iv) Permit the Company to participate in any proceedings on such IRS claim.
 
(d) Other Contest Terms.  Without limitation on the foregoing provisions of this
Section 10.3:
 
(i) The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Hill harmless, on and after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
 
(ii) The Company shall control all proceedings taken in connection with such
contest and, at its option, may pursue or forgo any and all administrative
appeals, proceedings, hearing and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Hill to pay the
tax claimed and sue for a refund or contest the IRS claim in any permissible
manner;
 
(iii) Hill agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine;
 
(iv) If the Company directs Hill to pay such IRS claim and sue for a refund,
then the Company shall advance the amount of such payment to Hill on an
interest-free basis and shall indemnify and hold Hill harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest penalties) imposed
regarding such advance or regarding any imputed income with respect to such
advance;
 
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(v) Any extension of the statute of limitations relating to payment of taxes for
the taxable year of Hill with respect to which such contested amount is claimed
to be due is limited solely to such contested amount.
 
(vi) The Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable under this Section 10 and
Hill shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
 
10.4 Refund.  Hill shall [subject to the Company's complying with the
requirements of Section 10.3, promptly pay to the Company the amount of any
refund actually received, including any interest paid or credited after
applicable taxes if, after the receipt by Hill of an amount advanced by the
Company pursuant to Section 10.3, Hill becomes entitled to receive any refund
for such IRS claim.
 
(a) Denial of Refund.  If, after the receipt by Hill of an amount advanced by
the Company pursuant to Section 10.3, a determination is made that Hill shall
not be entitled to any refund for such IRS claim and the Company does not notify
Hill in writing of its intent to contest such denial of refund before the
expiration of thirty (30) days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset the amount of Gross-Up Payment required to be paid.
 

11.
Other Rights for Termination "Without Cause" or "For Good Reason".

 
11.1 Other Benefits.  Hill shall be entitled to the following from the Company,
in addition to the other Compensation stated in either Section 7.3 or 8.2 above,
if Hill's services are terminated for "Without Cause" or "For Good Reason" or by
Death as set forth in either Section 5.3, 7.1 or 8.1 above.
 
(a) Options Vest.  Any outstanding options held by Hill to purchase the Company
stock shall vest as of the date of termination of Hill's services.
 
11.2 Plans and Program Rights.  Nothing in this Agreement shall affect or have
any bearing on Hill's entitlement to other benefits under any plan or program
providing benefits by reason of termination of services.
 
11.3 No Mitigation by Hill.  Hill shall not be required, under any circumstance
including provision in this Agreement, to mitigate the amount of any
Compensation or payment provided for in this Agreement by seeking other
services.
 
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12.
Source of Payment and Timing.

 
12.1 Source.  All payments under this Agreement shall be paid in cash from the
general funds of the Company.
 
(a) No special or separate fund shall be required to be established and Hill
shall have no right, title or interest whatsoever in or to any investment which
the Company may make to aid the Company in meeting its obligations here, except
to the extent that the Company shall, in its sole and absolute discretion,
choose to designate any of its rights it may have under one or more life
insurance policies it may obtain to cover any of its obligations under this
Agreement.
 
(b) Nothing in this Agreement, and no action taken pursuant to it, shall create
or be construed to create a trust of any kind or fiduciary relationship between
the Company and Hill or any other Person.
 
12.2 Time.  All payments due Hill under Sections 5.2, 5.3, 6.3, 7.3 or 8.2 above
shall be made not later than the thirtieth (30th) day following the date of
termination of services.
 
13. Interest.  Hill shall be entitled (in addition to his other rights and
remedies) to interest on past due amounts at a rate equal to two percentage
points (2%) above the prime rate charged from time to time by Republic Bank if
any benefits due to Hill are not paid when due with such interest to commence on
the date a benefit was due.

14. Reimbursement of Enforcement Expenses.  Hill shall be entitled to full
reimbursement from the Company for all costs and expenses (including reasonable
attorneys' fees, costs, and interest as stated in Section 13) incurred by Hill
in enforcing his rights under this Agreement if the following exist:
 
14.1 Failure to Pay.  The Company fails to pay or provide Hill any of the
amounts due him under this Agreement; or
 
14.2 Failure to Provide.  The Company fails to provide Hill with any of the
other benefits due him under this Agreement; and
 
14.3 Further Conditions for Reimbursement.  Provided that:
 
(a) the Company does not cure any such failure within thirty (30) days after
having received written notice from Hill of such failure; and
 
(b) there is an adjudication that Hill's action in enforcing his rights are not
frivolous.
 
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15.
Confidential Information and Non-Competition.

 
15.1 Confidentiality.
 
(a) Company Information Definition.  "Company Information" means all data
relating to the Company's business that is not generally published or available
to the public, including writings, equipment, processes, drawings, strategic
plans, reports, manuals, inventions, records, financial information, business
plans, customer lists, the identity of and other facts concerning prospective
customers, inventory lists, arrangements with suppliers and customers, computer
programs, or other materials embodying trade secrets, customer product
information, or technical or business information of the Company and any of its
subsidiaries.
 
(b) Non-Disclosure and Non-Use.  During the Term or any later time, except with
the prior written consent of the Company's Board, Hill shall not, directly or
indirectly:
 

(i)
Non-Disclosure.  Disclose, communicate or divulge Company Information to any
Person other than authorized Company personnel;

 

(ii)
Non-Use.  Use Company Information for the benefit of himself or any other
Person, other than authorized Company personnel.

 
15.2 The Company's Interests.  Hill will not, during the Term, except with the
express prior written consent of the Company's Board, directly or indirectly, in
any capacity (including but not limited to employee, owner, partner, consultant,
agent, director, officer, shareholder or in any other capacity) engage in or
assist any Person to engage in any act or action which he, acting reasonably,
believes or should believe would be harmful or inimical to the interests of the
Company.
 
15.3 Non-Competition and Time of Restrictions.
 
(a) Non-Competition.  Hill will not, except with the express prior written
consent of the Company's Board, in any capacity (including, but not limited to,
owner, partner, shareholder, consultant, agent, employee, officer, director or
otherwise), directly or indirectly, for his own account or for the benefit of
any Person:
 

(i)
Business and Geographic Restriction.  Establish, engage or participate in or
otherwise be connected with any commercial banking business which conducts
business in any geographic area in which the Company and its subsidiaries is
then conducting such business.

 

(ii)
Exception.  The foregoing shall not prohibit Hill from owning as a shareholder
less than 10% of the outstanding voting stock of an issuer engaged in the
commercial banking business in the United States.

 
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(b) Time of Restrictions.  The non-competition restrictions in Section 15.3
shall start on the effective date of this Agreement and end as stated below for
the appropriate circumstance.
 

(i)
Hill's Termination at Anniversary or Voluntary.  If this Agreement is terminated
by Hill in accord with the Termination at Anniversary in Section 1.2(b) of this
Agreement or if Hill voluntarily terminates his services, then the
non-competition restriction ends one year following the effective date of
termination of Hill's services under this Agreement;

 

(ii)
The Company's Termination at Anniversary.  If this Agreement is terminated by
the Company in accord with the provisions of Section 1.2(b) of this Agreement,
then the non-competition restriction ends on the effective date of termination
of Hill's services under this Agreement;

 

(iii)
Termination "For Cause".  If the Company terminates this Agreement "For Cause"
in accord with Section 6 of this Agreement, then the non-competition restriction
ends on the effective date of termination of Hill's services under this
Agreement; or

 

(iv)
Termination "Without Cause" and "For Good Reason".  If this Agreement is
terminated "Without Cause" or "For Good Reason" in accord with either Section
7.1 or 8.1 above, then the non-competition restriction ends on the effective
date of termination of Hill's services under this Agreement.

 
15.4 Remedies.  Any breach by Hill of any of the terms in this Section 15 will
result in irreparable injury to the Company for which money damages could not
adequately compensate the Company; and, thus, in the event of any such breach,
the Company shall be entitled (in addition to an other rights and remedies which
it may have at law or in equity) to have an injunction issued by any competent
court enjoining and restraining Hill and/or any other Person involved from
continuing such breach.
 
(a) No Defense or Bar.  The existence of any claim or cause of action which Hill
may have against the Company or any other Person (other than a claim for the
Company's breach of this Agreement for failure to make payments) shall not
constitute a defense or bar to the enforcement of the terms in this section 15.
 
(b) Payments After Breach.  In the event of any alleged breach by Hill of any of
the terms in this Section 15, the Company shall continue any and all of the
payments due Hill under this Agreement until such time as a Court shall enter a
final and unappealable order finding such a breach.
 

(i)
Exception.  The foregoing shall not preclude a Court from ordering Hill to repay
such payments made to him for the period after the breach is determined to have
occurred or from ordering that payments under this Agreement be permanently
terminated in the event of a material and willful breach.

 
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15.5 Enforceability.  If any portion of the terms in this Section 15, or their
application, is construed to be invalid or unenforceable, then the other
portions of such terms or their application shall not be affected and shall be
given full force and effect without regard to the invalid or unenforceable
portions to the fullest extent possible.
 
(a) If any term in this Section 15 is held to be unenforceable because of the
area covered, duration, or scope, then Hill and the Company expressly and
intentionally authorize the court making such determination to reduce the area
and/or duration and/or limit the scope to an enforceable term, so that the term
shall then be enforceable in its reduced form.
 
15.6 The Company Definition.  For this Section 15, the term "the Company" means
the Company, any successor of the Company under Section 16 below, and all
present and future direct and indirect subsidiaries and affiliates of the
Company.
 

16.
Successions.

 
16.1 Successors/Assigns/Heirs.  This Agreement shall inure to the benefit of and
be binding on:
 
(a) The Company and Hill and their respective heirs, executors, administrators,
successors and assigns; and
 
(b) Any corporate or other successors of the Company that acquires, directly or
indirectly, by combination, merger, consolidation, purchase, or otherwise, all
or substantially all of the assets of the Company.
 
16.2 Death.  On Hill's death, except for the "Death Benefit" governed by payment
described in Section 5.3 above, any payments or benefits otherwise due Hill
shall be paid to or be for the benefit of Hill's legal representatives for his
estate.
 
16.3 Combinations.  Nothing in the Agreement shall preclude the Company from
combining, consolidating or merging into or with or transferring all or
substantially all of its assets to another Person ("Combination").
 
(a) In the event of a Combination, such other Person shall be deemed to assume
this Agreement and all obligations of the Company in this Agreement.
 
(b) Upon such a Combination, the term "the Company" shall mean such other Person
and this Agreement shall continue in full force and effect.
 

17.
Notices.

 
17.1 Form of Notice.  All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered by:  hand with delivery receipt; or certified or registered
mail, return receipt requested, with postage prepaid; or overnight or express
courier with a receipt-for-delivery tracking system.
 
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17.2 Place of Notice.  All notices are to be delivered to the following
addresses or to such other address as either party may designate in writing by
like notice:
 
A. If to Hill, to:
 
Vernon W. Hill, II
Villa Collina
262 East Main Street
Moorestown, NJ  08057-2906

B. If to the Company, to:
 
Republic First Bancorp, Inc.
Two Liberty Place
50 S. 16th Street, Suite 2400
Philadelphia, PA  19102

Attention: CEO, Compensation Committee

 

18.
General Provisions.

 
18.1 Entire Agreement.  This Agreement constitutes the entire agreement between
the Company and Hill concerning its subject matter.  It supersedes and replaces
all prior discussions, representations, promises or agreements, whether written
or oral, express or implied, between Hill and the Company or their
representatives, including the Prior Agreement.
 
18.2 Amendments, Waivers and Termination.  No amendment, waiver or termination
of any of the provisions of this Agreement shall be effective unless in writing
and signed by the party against whom it is sought to be enforced.  Any written
amendment, waiver or termination of this Agreement executed by the Company and
Hill (or his legal representatives) shall be binding upon them and upon all
other Persons, without the necessity of securing the consent of any other Person
including, but not limited to, Hill's wife, and no Person shall be deemed to be
a third party beneficiary under this Agreement except as provided under Section
16 above.
 
18.3 Alternate Payments.  Instead of the Company, any subsidiary of the Company
may make payments to Hill and, to the extent such payments are so made, the
Company shall be released of its obligations to make such payments.
 
18.4 Benefits and Insurance.  The benefits provided under this Agreement shall
be in addition to and shall not affect the proceeds payable to Hill's
beneficiaries under group life insurance policies which the Company may be
carrying on Hill's life for his benefits.
 
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18.5 "Person" Definition.  "Person" means a natural person, joint venture,
corporation, sole proprietorship, trust, estate, partnership, cooperative,
association, non-profit organization or any other legal entity.
 
18.6 Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same Agreement.
 
18.7 No Waiver.  Except as otherwise expressly stated in this Agreement, no
failure on the part of any party to this Agreement to exercise and no delay in
exercising any right, power or remedy under this Agreement shall operate as a
waiver; nor shall any single or partial exercise of any right, power or remedy
under this Agreement preclude any other or further exercise of any of or the
exercise of any other right, power or remedy.
 
18.8 Assignment.  Without the Company's prior written consent and approval,
neither this Agreement nor any of its rights to receive payments shall be
voluntarily or involuntarily:
 
(a) Assigned, transferred, alienated, encumbered or disposed of, in whole or in
part; or
 
(b) Subject to anticipation, levy, execution, garnishment, attachment by, or
interference or control of, any creditor.
 
18.9 Pennsylvania Jurisdiction.  The Company and Hill irrevocably, voluntarily,
knowingly and expressly consent to:
 
(a) Courts in Pennsylvania.  The exclusive jurisdiction of the Common Pleas
Court, Philadelphia, Pennsylvania or the United States District Court for the
Eastern District of Pennsylvania, to enforce this Agreement, or to resolve any
claim, controversy or dispute involving it; and
 
(b) Service of Process.  Service of process as set forth in the Notice stated in
Section 17 above.
 
18.10 Headings.  The headings of the sections of this Agreement have been
inserted for convenience and clarity.  They do not restrict or modify any of the
terms or provisions of this Agreement.
 
18.11 Notice of Dispute and Cure.  If the Company or Hill has a dispute or claim
under this Agreement, then that dispute or claim shall be described with
specificity in writing; and, the party receiving such written notice shall have
thirty (30) business days to cure the dispute or claim.
 
18.12 Pennsylvania Law.  This Agreement shall be governed and construed, and the
legal relationships of the parties determined, in accordance with the laws of
the Commonwealth of Pennsylvania applicable to contracts executed and to be
performed solely in the Commonwealth of Pennsylvania.
 

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REPUBLIC FIRST BANCORP, INC.
                 
(Corporate Seal)
By:
/s/ Harry D. Madonna                     
Attest:
/s/ Kemma Brown                            /s/ Vernon W. Hill, II  
(SEAL)
 
VERNON W. HILL, II

 
 
 
 
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