Exhibit 10.3
 
 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the
21st day of September, 2016 (the “Effective Date”), between PBI Bank, Inc., a
Kentucky-chartered commercial bank (the “Bank” or the “Employer”), and Joseph C.
Seiler (the “Executive”).
 
WITNESSETH
 
WHEREAS, the Executive currently serves as the Executive Vice President—Head of
Commercial Banking—Senior Lending Officer of the Bank;
 
WHEREAS, the Employer desires to be ensured of the Executive’s continued active
participation in the business of the Employer and wishes to enter into this
Agreement in view of the impending expiration of the employment agreement dated
August 7, 2013 (the “Prior Agreement”) by and among the Executive, the Bank and
Porter Bancorp, Inc., the parent holding company of the Bank (the
“Corporation”), which will expire in August 2016; and
 
WHEREAS, the Executive is willing to continue to serve the Employer on the terms
and conditions hereinafter set forth.
 
NOW THEREFORE, in consideration of the mutual agreements herein contained, and
upon the other terms and conditions hereinafter provided, the Employer and the
Executive hereby agree as follows:
 
1.                   Definitions. The following words and terms shall have the
meanings set forth below for the purposes of this Agreement:
 
(a)                Base Salary. “Base Salary” shall have the meaning set forth
in Section 3(b) hereof.
 
(b)                Cause. Termination of the Executive’s employment for “Cause”
shall mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final consent
or cease-and-desist order or material breach of any provision of this Agreement.
 
(c)                Change in Control. “Change in Control” shall mean a change in
the ownership of the Corporation, or the Bank, a change in the effective control
of the Corporation or the Bank or a change in the ownership of a substantial
portion of the assets of the Corporation or the Bank, in each case as provided
under Section 409A of the Code and the regulations thereunder.
 
(d)                Code. “Code” shall mean the Internal Revenue Code of 1986, as
amended.
 
(e)                Date of Termination. “Date of Termination” shall mean (i) if
the Executive’s employment is terminated for Cause, the date on which the Notice
of Termination is given, and (ii) if the Executive’s employment is terminated
for any other reason, the date specified in such Notice of Termination.
 
(f)                 Disability. “Disability” shall mean the Executive (i) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident and health
plan covering employees of the Employer.

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(g)                Good Reason. Termination by the Executive of the Executive’s
employment for “Good Reason” shall mean termination by the Executive based on:
 
(i)            any material breach of this Agreement by the Employer, including
without limitation any of the following: (A) a material diminution in the
Executive’s base compensation, (B) a material diminution in the Executive’s
authority, duties or responsibilities, or (C) any requirement that the Executive
report to a corporate officer or employee of the Bank other than: (1) the
President and Chief Executive Officer of the Bank; (2) the Board of Directors of
the Bank; or (3) from time to time with respect to specified matters, a director
of the Bank who is designated by a majority of the full Board of Directors of
the Bank, or
 
(ii)            any material change in the Metro Louisville, Kentucky location
at which the Executive must perform his services under this Agreement;
 
provided, however, that prior to any termination of employment for Good Reason,
the Executive must first provide written notice to the Bank within ninety
(90) days of the initial existence of the condition, describing the existence of
such condition, and the Bank shall thereafter have the right to remedy the
condition within thirty (30) days of the date the Bank received the written
notice from the Executive. If the Bank remedies the condition within such thirty
(30) day cure period, then no Good Reason shall be deemed to exist with respect
to such condition. If the Bank does not remedy the condition within such thirty
(30) day cure period, then the Executive may deliver a Notice of Termination for
Good Reason at any time within sixty (60) days following the expiration of such
cure period.
 
(h)                Notice of Termination. Any purported termination of the
Executive’s employment by the Employer for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be communicated by a
written “Notice of Termination” to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a dated notice which
(i) indicates the specific termination provision in this Agreement relied upon,
(ii) 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, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such Notice of
Termination is given, except in the case of the termination of the Executive’s
employment for Cause, which shall be effective immediately, and (iv) is given in
the manner specified in Section 11 hereof.
 
(i)                 Retirement. “Retirement” shall mean the Executive’s
voluntary or involuntary termination of employment, as applicable, upon reaching
at least age 65, but shall not include an involuntary termination for Cause.
 
2.                   Term of Employment.
 
(a)                The Bank hereby employs the Executive as Executive Vice
President—Head of Commercial Banking—Senior Lending Officer and the Executive
hereby accepts said employment with the Bank and agrees to render such services
to the Employer on the terms and conditions set forth in this Agreement. The
term of employment under this Agreement shall be for three years beginning on
the Effective Date. Prior to the first annual anniversary of the Effective Date
and each annual anniversary thereafter, the Board of Directors of the Bank shall
consider and review (with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including the Executive’s performance
hereunder) a one-year extension of the term of this Agreement. If the Board of
Directors approves such an extension, then the term of this Agreement shall be
so extended as of the relevant annual anniversary of the Effective Date unless
the Executive gives written notice to the Employer of the Executive’s election
not to extend the term, with such written notice to be given not less than
thirty (30) days prior to any such relevant annual anniversary of the Effective
Date; provided, however, that if the Bank is deemed to be in “troubled
condition” as defined in 12 C.F.R. §303.101(c) as of the applicable annual
anniversary of the Effective Date, then the term of this Agreement shall not be
extended unless and until the Employer shall have received all requisite
regulatory approvals, non-objections or consents to such renewal pursuant to the
provisions of 12 C.F.R. Part 359. If the Board of Directors elects not to extend
the term, it shall give written notice of such decision to the Executive not
less than thirty (30) days prior to any such annual anniversary of the Effective
Date. If any party gives timely notice that the term will not be extended as of
any annual anniversary of the Effective Date, then this Agreement and the rights
and obligations provided herein shall terminate at the conclusion of its
remaining term, except to the extent set forth in Section 5(d) (including the
provisions referenced in such section) and Section 7. References herein to the
term of this Agreement shall refer both to the initial term and successive
terms.
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(b)            During the term of this Agreement, the Executive shall perform
such executive services for the Bank as may be consistent with his titles and
from time to time assigned to him by the Bank’s President and Chief Executive
Officer or by the Bank’s Board of Directors.
 
3.                   Compensation and Benefits.
 
(a)            The Employer shall compensate and pay the Executive for his
services during the term of this Agreement at a minimum base salary of $240,000
per year (“Base Salary”), which may be increased from time to time in such
amounts as may be determined by the Board of Directors of the Employer and may
not be decreased without the Executive’s express written consent.
 
(b)            During the term of this Agreement, the Executive shall be
entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock incentive, or other plans,
benefits and privileges given to employees and executives of the Employer, to
the extent commensurate with his then duties and responsibilities, as fixed by
the Board of Directors of the Employer. The Employer shall not make any changes
in such plans, benefits or privileges which would adversely affect the
Executive’s rights or benefits thereunder, unless such change occurs pursuant to
a program applicable to all executive officers of the Employer and does not
result in a proportionately greater adverse change in the rights of or benefits
to the Executive as compared with any other executive officer of the Employer.
Nothing paid to the Executive under any plan or arrangement presently in effect
or made available in the future shall be deemed to be in lieu of the salary
payable to the Executive pursuant to Section 3(b) hereof.
 
(c)            During the term of this Agreement, the Executive shall be
entitled to paid annual vacation in accordance with the policies as established
from time to time by the Board of Directors of the Employer, which shall in no
event be less than four weeks per annum. The Executive shall not be entitled to
receive any additional compensation from the Employer for failure to take a
vacation, nor shall the Executive be able to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.
 
4.                   Expenses. The Employer shall reimburse the Executive or
otherwise provide for or pay for all reasonable expenses incurred by the
Executive in furtherance of or in connection with the business of the Employer,
including, but not by way of limitation, traveling expenses, and all reasonable
entertainment expenses, subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of the Employer. If
such expenses are paid in the first instance by the Executive, the Employer
shall reimburse the Executive therefor. Such reimbursement shall be paid
promptly by the Employer and in any event no later than March 15 of the year
immediately following the year in which such expenses were incurred.
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5.                   Termination.
 
(a)            The Employer shall have the right, at any time upon prior Notice
of Termination, to terminate the Executive’s employment hereunder for any
reason, including, without limitation, termination for Cause, Disability or
Retirement, and the Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.
 
(b)            In the event that (i) the Executive’s employment is terminated by
the Employer for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability, Retirement, death or Good Reason, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.
 
(c)            In the event that the Executive’s employment is terminated as a
result of Disability, Retirement or the Executive’s death during the term of
this Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.
 
(d)            In the event that the Executive’s employment is terminated by
(i) the Employer for other than Cause, Disability, Retirement or the Executive’s
death during the term of this Agreement, (ii) the Executive for Good Reason
during the term of this Agreement or (iii) subject to the penultimate sentence
of this Section 5(d), the Employer for other than Cause, Disability, Retirement
or the Executive’s death within six months following the expiration of the term
of this Agreement in accordance with the terms of Section 2(a) hereof, then the
Employer shall, in consideration of the Executive’s agreements in Section 7
below and subject to the provisions of Sections 5(e), 5(f), 6, 18 and 19 hereof,
if applicable, pay to the Executive a cash severance amount equal to one
(1) times the Executive’s then current annual Base Salary (the “Severance
Payment”). The Severance Payment shall be paid in a lump sum within ten
(10) business days following the later of the Date of Termination or the
expiration of the revocation period provided for in the general release to be
executed by the Executive pursuant to Section 5(e) below. The Severance Payment
shall be in lieu of, and not in addition to, any Base Salary or other
compensation or benefits that would have been paid under Sections 3(a) and 3(b)
above in the absence of a termination of employment, and the Executive shall
have no rights pursuant to this Agreement to any Base Salary or other benefits
for any period after the applicable Date of Termination. The Executive’s right
to severance under Section 5(d)(iii) above shall be subject to the following:
(Y) the expiration of this Agreement in accordance with the terms of
Section 2(a) hereof shall be for a reason other than a notice of non-renewal of
the term of this Agreement having been provided by the Executive, and (Z) as of
the Date of Termination of the Executive’s employment, the Bank is not deemed to
be in “troubled condition” as defined in 12 C.F.R. §303.101(c). In the event
that at the Date of Termination, the Bank is deemed to be in “troubled
condition” as defined in 12 C.F.R. §303.101(c), Executive’s right to severance
under this Section 5(d) shall be subject to and conditioned upon the prior
receipt of any required regulatory approval or non-objection.
 
(e)            The Executive’s right to receive the severance set forth in
Section 5(d) above shall be conditioned upon the Executive’s execution of a
general release which releases the Bank and the Corporation and their respective
directors, officers and employees from any claims that the Executive may have
under various laws and regulations and the expiration of any right the Executive
may have to revoke such general release, with such revocation right not being
exercised. If either the time period for paying the severance set forth in
Section 5(d) or the time period that the Executive has to consider the terms of
the general release (including any revocation period under such release)
commences in one calendar year and ends in the succeeding calendar year, then
the severance payment set forth in Section 5(d) above shall not be paid until
the succeeding calendar year.
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(f)            If prior to the Executive’s receipt of the Severance Payment set
forth in Section 5(d) above it is determined that the Executive (i) committed
any fraudulent act or omission, breach of trust or fiduciary duty, or insider
abuse with regard to the Employers that has had or is likely to have a material
adverse effect on either of the Employers, (ii) is substantially responsible for
the insolvency of, the appointment of a conservator or receiver for, or the
troubled condition, as defined by applicable regulations of the appropriate
federal banking agency, of the Employer, (iii) has materially violated any
applicable federal or state banking law or regulation that has had or is likely
to have a material adverse effect on the Employer, or (iv) has violated or
conspired to violate Sections 215, 656, 657, 1005, 1006, 1007, 1014, 1302 or
1344 of Title 18 of the United State Code, or Sections 1341 or 1343 of Title 18
affecting the Bank, then the Severance Payment shall not be provided to the
Executive. If it is determined after the Executive receives the Severance
Payment that any of the matters set forth in clauses (i) through (iv) of this
Section 5(f) are applicable to the Executive, then the Executive shall promptly
(and in any event within ten (10) business days following written notice to the
Executive) return an amount equal to the Severance Payment to the Employer in
immediately available funds.
 
6.                   Limitation of Benefits under Certain Circumstances. If the
payment pursuant to Section 5(d) hereof, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Employer, would constitute a “parachute payment” under Section 280G of the Code,
then the amount payable by the Employer pursuant to Section 5(d) hereof shall be
reduced by the minimum amount necessary to result in no portion of the amount
payable by the Employer under Section 5(d) being non-deductible to the Employer
pursuant to Section 280G of the Code and subject to the excise tax imposed under
Section 4999 of the Code. The determination of any reduction in the amount
payable pursuant to Section 5(d) shall be based upon the opinion of independent
tax counsel selected by the Employer and paid for by the Employer. Such counsel
shall promptly prepare the foregoing opinion, but in no event later than ten
(10) days from the Date of Termination, and may use such actuaries as such
counsel deems necessary or advisable for the purpose. Nothing contained herein
shall result in a reduction of any payments or benefits to which the Executive
may be entitled upon termination of employment under any circumstances other
than as specified in this Section 6, or a reduction in the payment specified in
Section 5(d) below zero.
 
7.                   Restrictive Covenants.
 
(a)            Trade Secrets. The Executive acknowledges that he has had, and
will have, access to confidential information of the Bank and the Corporation
(including, but not limited to, current and prospective confidential know-how,
customer lists, marketing plans, business plans, financial and pricing
information, and information regarding acquisitions, mergers and/or joint
ventures) concerning the business, customers, contacts, prospects, and assets of
the Bank and the Corporation that is unique, valuable and not generally known
outside the Bank and the Corporation, and that was obtained from the Bank and
the Corporation or which was learned as a result of the performance of services
by the Executive on behalf of the Employer (“Trade Secrets”). Trade Secrets
shall not include any information that: (i) is now, or hereafter becomes,
through no act or failure to act on the part of the Executive that constitutes a
breach of this Section 7, generally known or available to the public; (ii) is
known to the Executive at the time such information was obtained from the Bank
or the Corporation; (iii) is hereafter furnished without restriction on
disclosure to the Executive by a third party, other than an employee or agent of
the Bank or the Corporation, who is not under any obligation of confidentiality
to the Bank or the Corporation or an Affiliate; (iv) is disclosed with the
written approval of the Bank and the Corporation; or (v) is required to be
disclosed or provided by law, court order, order of any regulatory agency having
jurisdiction or similar compulsion, including pursuant to or in connection with
any legal proceeding involving the parties hereto; provided however, that such
disclosure shall be limited to the extent so required or compelled; and provided
further, however, that if the Executive is required to disclose such
confidential information, he shall give the Employer notice of such disclosure
and cooperate in seeking suitable protections. Other than in the course of
performing services for the Employer, the Executive will not, at any time,
directly or indirectly use, divulge, furnish or make accessible to any person
any Trade Secrets, but instead will keep all Trade Secrets strictly and
absolutely confidential. The Executive will deliver promptly to the Employer, at
the termination of his employment or at any other time at the request of the
Employers, without retaining any copies, all documents and other materials in
his possession relating, directly or indirectly, to any Trade Secrets.
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(b)            Non-Competition. During the term of this Agreement and for a
period of twelve (12) months after termination of employment, including a
termination of employment pursuant to Section 5(d)(iii) above (the “Restricted
Period”), the Executive will not, directly or indirectly, (i) become a director,
officer, employee, principal, agent, shareholder, consultant, partner, member,
trustee or independent contractor of any insured depository institution, trust
company or parent holding company of any such institution or company which has
an office in any county in the Commonwealth of Kentucky in which the Bank also
maintains an office; provided, however, that this paragraph shall not apply if
Employer terminates Executive without cause during the first year of Executive’s
employment, or if Employer elects not to renew Executive’s employment at the end
of the term of this Agreement, or at the end of any extended term.
Notwithstanding the foregoing, nothing in this Agreement shall prevent the
Executive from owning for passive investment purposes not intended to circumvent
this Agreement, less than five percent (5%) of the publicly traded voting
securities of any company engaged in the banking, financial services or other
business similar to or competitive with the Bank (so long as the Executive has
no power to manage, operate, advise, consult with or control the competing
enterprise and no power, alone or in conjunction with other affiliated parties,
to select a director, manager, general partner, or similar governing official of
the competing enterprise other than in connection with the normal and customary
voting powers afforded the Executive in connection with any permissible equity
ownership).
 
(c)            Non-Solicitation of Employees. During the Restricted Period, the
Executive shall not, directly or indirectly, solicit, induce or hire, or attempt
to solicit, induce or hire, any current employee of the Bank or the Corporation,
or any individual who becomes an employee during the Restricted Period, to leave
his or her employment with the Bank or the Corporation or join or become
affiliated with any other business or entity, or in any way interfere with the
employment relationship between any employee and the Bank or the Corporation.
 
(d)            Non-Solicitation of Customers. During the Restricted Period, the
Executive shall not, directly or indirectly, solicit or induce, or attempt to
solicit or induce, any customer, lender, supplier, licensee, licensor or other
business relation of the Bank or the Corporation to terminate its relationship
or contract with the Bank or the Corporation, to cease doing business with the
Bank or the Corporation, or in any way interfere with the relationship between
any such customer, lender, supplier, licensee or business relation and the Bank
or the Corporation (including making any negative or derogatory statements or
communications concerning the Bank or the Corporation or their directors,
officers or employees).
 
(e)            Irreparable Harm. The Executive acknowledges that: (i) the
Executive’s compliance with Section 7 of this Agreement is necessary to preserve
and protect the proprietary rights, Trade Secrets, and the goodwill of the Bank
and the Corporation as going concerns, and (ii) any failure by the Executive to
comply with the provisions of this Agreement will result in irreparable and
continuing injury for which there will be no adequate remedy at law. In the
event that the Executive fails to comply with the terms and conditions of this
Agreement, the obligations of the Employer to pay the severance benefits set
forth in Section 5 shall cease, and the Employer will be entitled, in addition
to other relief that may be proper, to all types of equitable relief (including,
but not limited to, the issuance of an injunction and/or temporary restraining
order and the recoupment of any severance previously paid) that may be necessary
to cause the Executive to comply with this Agreement, to restore to the Bank and
the Corporation their property, and to make the Employer whole.
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(f)            Survival. The provisions set forth in this Section 7 shall
survive termination of this Agreement.
 
(g)           Scope Limitations. If the scope, period of time or area of
restriction specified in this Section 7 are or would be judged to be
unreasonable in any court proceeding, then the period of time, scope or area of
restriction will be reduced or limited in the manner and to the extent necessary
to make the restriction reasonable, so that the restriction may be enforced in
those areas, during the period of time and in the scope that are or would be
judged to be reasonable.
 
8.                   Mitigation; Exclusivity of Benefits.
 
(a)            The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
 
(b)            The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employer pursuant to employee benefit plans
of the Employer or otherwise.
 
9.                   Withholding. All payments required to be made by the
Employer hereunder to the Executive shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the Employer
may reasonably determine should be withheld pursuant to any applicable law or
regulation.
 
10.                 Assignability. The Bank may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Bank may hereafter merge or
consolidate or to which the Bank may transfer all or substantially all of its
assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the Bank
hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights and obligations hereunder. The
Executive may not assign or transfer this Agreement or any rights or obligations
hereunder.
 
11.                 Notice. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
 
To the Bank:
President and Chief Executive Officer
 
PBI Bank, Inc.
 
2500 Eastpoint Parkway
 
Louisville, Kentucky 40223
   
To the Executive:
Joseph C. Seiler
 
At the address last appearing on
the personnel records of the Employers

 
12.                Amendment; Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer or officers as may
be specifically designated by the Board of Directors of the Bank to sign on its
behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
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13.                Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United States
where applicable and otherwise by the substantive laws of the Commonwealth of
Kentucky.
 
14.               Nature of Obligations. Nothing contained herein shall create
or require the Employer to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Employer hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employer.
 
15.                Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
16.                Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
 
17.                Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together will constitute one and the same instrument.
 
18.                Regulatory Actions. The following provisions shall be
applicable to the parties hereto or any successor thereto, and shall be
controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 5 hereof.
 
(a)            If the Executive is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank’s affairs pursuant to
notice served under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit
Insurance Act (“FDIA”)(12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Bank’s
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may, in its discretion: (i) pay the Executive all or part of
the compensation withheld while its obligations under this Agreement were
suspended, and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.
 
(b)            If the Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Bank’s affairs by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.
§§1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
Executive and the Bank as of the date of termination shall not be affected.
 
(c)            If the Bank is in default, as defined in Section 3(x)(1) of the
FDIA (12 U.S.C. §1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but vested rights of the Executive and the
Bank as of the date of termination shall not be affected.
 
19.                Regulatory Prohibition. Notwithstanding any other provision
of this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, and any renewal of this Agreement are subject
to and conditioned upon their compliance with Section 18(k) of the FDIA (12
U.S.C. §1828(k)) and 12 C.F.R. Part 359.
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20.                Changes in Statutes or Regulations. If any statutory or
regulatory provision referenced herein is subsequently changed or re-numbered,
or is replaced by a separate provision, then the references in this Agreement to
such statutory or regulatory provision shall be deemed to be a reference to such
section as amended, re-numbered or replaced.
 
21.                Payment of Costs and Legal Fees and Reinstatement of
Benefits. In the event any dispute or controversy arising under or in connection
with the Executive’s termination is resolved in favor of the Executive, whether
by judgment, arbitration or settlement, the Executive shall be entitled to the
payment of (a) all reasonable legal fees incurred by the Executive in resolving
such dispute or controversy, and (b) any back-pay, including Base Salary,
bonuses and any other cash compensation, fringe benefits and any compensation
and benefits due to the Executive under this Agreement.
 
22.                Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the rules then in effect of the district office
of the American Arbitration Association (“AAA”) located nearest to the home
office of the Bank, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof, except to the extent that the parties may
otherwise reach a mutual settlement of such issue.
 
23.                Entire Agreement. This Agreement embodies the entire
agreement between the Bank and the Executive with respect to the matters agreed
to herein. All prior agreements, including the Prior Agreement, between the Bank
and the Corporation and the Executive with respect to the matters agreed to
herein are hereby superseded and shall have no force or effect.

 
(Signature page follows)
 
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.
 

       
PBI BANK, INC.
           
By:
/s/ Michael T. Levy       
Michael T. Levy
     
Chairman, Compensation Committee
       
EXECUTIVE
           
By:
/s/ Joseph C. Seiler       
Joseph C. Seiler
 

 
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