Exhibit 10.19
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
     AGREEMENT by and between Seacoast Banking Corporation of Florida (the
“Company”) and Richard A. Yanke (“Executive”), dated as of the 18th day of July,
2006.
     The Board of Directors of the Company (the “Board”), has determined that it
is in the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication of Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide Executive
with compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
     1. Certain Definitions.
          (a) The “Effective Date” shall mean the first date during the Change
of Control Period (as defined in Section l(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs during the Change of Control
Period and if Executive’s employment with the Company has been terminated either
by the Company without Cause or by Executive for Good Reason (as such terms are
defined in Section 5) within six months prior to the date on which the Change of
Control occurs, and unless it is reasonably demonstrated by the Company that
such termination of employment (i) was not at the request of a third party who
has taken steps reasonably calculated to effect the Change of Control and
(ii) did not otherwise arise in connection with or anticipation of the Change of
Control, then for all purposes of this Agreement the “Effective Date” shall mean
the date immediately prior to the date of such termination of employment.
          (b) The “Change of Control Period” shall mean the period commencing on
the date hereof and ending on the first anniversary of the date hereof;
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the “Renewal Date”),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate one year from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to Executive that the Change of Control Period shall not be so extended.

 

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Change of Control Employment Agreement
Richard A. Yanke
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     2. Change of Control. For the purposes of this Agreement, a “Change of
Control” shall mean the occurrence of any of the following events:
          (a) individuals who, at the Effective Date, constitute the Board (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of
the Board, provided that any person becoming a director after the Effective Date
and whose election or nomination for election was approved by a vote of at least
a majority of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest (as described in Rule 14a-11
under the 1934 Act (“Election Contest”) or other actual or threatened
solicitation of proxies or consents by or on behalf of any “person” (as such
term is defined in Section 3(a)(9) of the 1934 Act and as used in
Section 13(d)(3) and 14(d)(2) of the 1934 Act) other than the Board (“Proxy
Contest”), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest, shall be deemed an Incumbent Director;
          (b) any person is or becomes a “beneficial owner” (as defined in
Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities eligible to vote for the election of the Board (the
“Company Voting Securities”); provided, however, that the event described in
this paragraph (b) shall not be deemed to be a Change in Control of the Company
by virtue of any of the following acquisitions: (A) any acquisition by a person
who is on the Effective Date the beneficial owner of 25% or more of the
outstanding Company Voting Securities, (B) an acquisition by the Company which
reduces the number of Company Voting Securities outstanding and thereby results
in any person acquiring beneficial ownership of more than 25% of the outstanding
Company Voting Securities; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur, (C) an acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Parent or Subsidiary,
(D) an acquisition by an underwriter temporarily holding securities pursuant to
an offering of such securities, (E) an acquisition pursuant to a Non-Qualifying
Transaction (as defined in paragraph (c) below), or (F) a transaction (other
than the one described in paragraph (c) below) in which Company Voting
Securities are acquired from the Company, if a majority of the Incumbent
Directors approve a resolution providing expressly that the acquisition pursuant
to this clause (F) does not constitute a Change in Control of the Company under
this paragraph (b);

 

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Richard A. Yanke
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          (c) the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction involving the
Company that requires the approval of the Company’s stockholders, whether for
such transaction or the issuance of securities in the transaction (a
“Reorganization”), or the sale or other disposition of all or substantially all
of the Company’s assets to an entity that is not an affiliate of the Company (a
“Sale”), unless immediately following such Reorganization or Sale: (A) more than
50% of the total voting power of (x) the corporation resulting from such
Reorganization or the corporation which has acquired all or substantially all of
the assets of the Company (in either case, the “Surviving Corporation”), or
(y) if applicable, the ultimate parent corporation that directly or indirectly
has beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by the Company Voting Securities that were outstanding immediately
prior to such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were converted pursuant to such
Reorganization or Sale), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Reorganization or
Sale, and (B) no person (other than (x) the Company, (y) any employee benefit
plan (or related trust) sponsored or maintained by the Surviving Corporation or
the Parent Corporation, or (z) a person who immediately prior to the
Reorganization or Sale was the beneficial owner of 25% or more of the
outstanding Company Voting Securities) is the beneficial owner, directly or
indirectly, of 25% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation), and (C) at least a
majority of the members of the board of directors of the Parent Corporation (or,
if there is no Parent Corporation, the Surviving Corporation) following the
consummation of the Reorganization or Sale were Incumbent Directors at the time
of the Board’s approval of the execution of the initial agreement providing for
such Reorganization or Sale (any Reorganization or Sale which satisfies all of
the criteria specified in (A), (B) and (C) above shall be deemed to be a
“Non-Qualifying Transaction”); or
          (d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
     3. Employment Period. The Company hereby agrees to continue Executive in
its employ of the Company, and Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the first anniversary of
such date (the “Employment Period”).

 

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Change of Control Employment Agreement
Richard A. Yanke
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     4. Terms of Employment.
          (a) Position and Duties.
               (i) During the Employment Period, (A) Executive’s position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Effective Date, and
(B) Executive’s services shall be performed at the location where Executive was
employed immediately preceding the Effective Date or any office or location less
than 35 miles from such location.
               (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which Executive is entitled, Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to Executive hereunder, to use Executive’s
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) engage in other business activities that do not
represent a conflict of interest with the full execution of his duties to the
Company, and (C) manage personal investments, so long as such activities do not
significantly interfere with the performance of Executive’s responsibilities as
an employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of Executive’s responsibilities to the Company.
          (b) Compensation.
               (i) Base Salary. During the Employment Period, Executive shall
receive an annual base salary (“Annual Base Salary”), which shall be paid at a
monthly rate, at least equal to 12 times the highest monthly base salary paid or
payable, including any base salary which has been earned but deferred, to
Executive by the Company and its affiliated companies in respect of the 12-month
period immediately preceding the month in which the Effective Date occurs. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to Executive under this Agreement. Annual Base Salary shall not be
reduced after any such increase and the term Annual Base Salary as utilized in
this Agreement shall refer to Annual Base Salary as so increased. As used in
this Agreement, the term “affiliated companies” shall include any company
controlled by, controlling or under common control with the Company.

 

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Change of Control Employment Agreement
Richard A. Yanke
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               (ii) Annual Bonus. In addition to Annual Base Salary, Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the “Annual Bonus”) in cash at least equal to Executive’s highest
annual bonus for the last three full fiscal years prior to the Effective Date
(annualized in the event that Executive was not employed by the Company for the
whole of such fiscal year). Each such Annual Bonus shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless Executive shall elect to defer the
receipt of such Annual Bonus.
               (iii) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to senior executive officers of the Company and its affiliated
companies (“Peer Executives”), but in no event shall such plans, practices,
policies and programs provide Executive with incentive opportunities, savings
opportunities and retirement benefit opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided by the
Company and its affiliated companies for Executive under such plans, practices,
policies and programs as in effect at any time during the 120-day period
immediately preceding the Effective Date or if more favorable to Executive,
those provided generally at any time after the Effective Date to Peer
Executives.
               (iv) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to Peer
Executives.
               (v) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of the
Company applicable to Peer Executives.
               (vi) Fringe Benefits. During the Employment Period, Executive
shall be entitled to fringe benefits in accordance with the plans, practices,
programs and policies of the Company applicable to Peer Executives.
     5. Termination of Employment.
          (a) Death, Disability or Retirement. Executive’s employment shall
terminate automatically upon Executive’s death or Retirement during the
Employment Period. For purposes of this Agreement, “Retirement” shall mean
normal retirement as defined in the Company’s then-current retirement plan, or
if there is no such retirement

 

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Change of Control Employment Agreement
Richard A. Yanke
Page 6
 
plan, “Retirement” shall mean voluntary termination after age 65 with ten years
of service. If the Company determines in good faith that the Disability of
Executive has occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to Executive written notice in
accordance with Section 13(b) of this Agreement of its intention to terminate
Executive’s employment. In such event, Executive’s employment with the Company
shall terminate effective on the 30th day after receipt of such notice by
Executive (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, Executive shall not have returned to full-time performance
of Executive’s duties. For purposes of this Agreement, “Disability” shall mean
the inability of Executive, as determined by the Board, to perform the essential
functions of his regular duties and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical or mental illness which
has lasted (or can reasonably be expected to last) for a continuous period of
six (6) months during any continuous twelve (12) month period.
          (b) Cause. The Company may terminate Executive’s employment during the
Employment Period with or without Cause. For purposes of this Agreement, “Cause”
shall mean:
               (i) the willful and continued failure of Executive to perform
substantially Executive’s duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness, and specifically
excluding any failure by Executive, after reasonable efforts, to meet
performance expectations), after a written demand for substantial performance is
delivered to Executive by the Board of Directors of the Company which
specifically identifies the manner in which such Board believes that Executive
has not substantially performed Executive’s duties, or
               (ii) the willful engaging by Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.
     For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company. The cessation of employment of Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-fourths of the entire membership of the Board of the
Company at a meeting of such Board called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given an
opportunity, together with counsel, to be heard before such Board), finding
that, in the good faith opinion of such Board,

 

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Richard A. Yanke
Page 7
 
Executive is guilty of the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.
          (c) Good Reason. Executive’s employment may be terminated by Executive
for Good Reason or for no reason. For purposes of this Agreement, “Good Reason”
shall mean:
               (i) without the written consent of Executive, the assignment to
Executive of any duties inconsistent in any material respect with Executive’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as in effect on the Effective Date, or any
other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
               (ii) the Company’s requiring Executive, without his consent, to
be based at any office or location that is more than 35 miles from the location
where Executive was employed immediately prior to the Effective Date;
               (iii) a reduction in Executive’s Base Salary and benefits as in
effect on the Effective Date or as the same may be increased from time to time;
               (iv) the failure by the Company (a) to continue in effect any
compensation plan in which Executive participates as of the Effective Date that
is material to Executive’s total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or (b) to continue Executive’s participation therein (or
in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of
Executive’s participation relative to other participants; or
               (v) any failure by the Company to comply with and satisfy Section
12(c) of this Agreement; or
               (vi) the material breach of this Agreement by the Company.
     For purposes of this Section 5(c), any good faith determination of “Good
Reason” made by Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by Executive for any reason during the
30-day period immediately following the six (6) month anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
          (d) Notice of Termination. Any termination by the Company for Cause,
or by Executive for Good Reason, shall be communicated by Notice of

 

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Change of Control Employment Agreement
Richard A. Yanke
Page 8
 
Termination to the other party hereto given in accordance with this Agreement.
For purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated and (iii) specifies the termination
date (which date shall be not less than 60 days after the giving of such
notice). If a dispute exists concerning the provisions of this Agreement that
apply to Executive’s termination of employment, the parties shall pursue the
resolution of such dispute with reasonable diligence. Within five (5) days of
such a resolution, any party owing any payments pursuant to the provisions of
this Agreement shall make all such payments together with interest accrued
thereon at the rate provided in Section 1274(b)(2)(B) of the Internal Revenue
Code of 1986, as amended (the “Code”). The failure by either party to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of such party
hereunder or preclude such party from asserting such fact or circumstance in
enforcing such party’s rights hereunder.
          (e) Date of Termination. “Date of Termination” means (i) if
Executive’s employment is terminated other than by reason of death or
Disability, the date of receipt of the Notice of Termination, or any later date
specified therein, or (ii) if Executive’s employment is terminated by reason of
death or Disability, the Date of Termination will be the date of death or the
Disability Effective Date, as the case may be.
     6. Obligations of the Company upon Termination.
          (a) Good Reason; Other Than for Cause, Death or Disability. If, during
the Employment Period, the Company shall terminate Executive’s employment other
than for Cause or Disability, or Executive shall terminate employment for Good
Reason, then in consideration of Executive’s services rendered prior to such
termination:
               (i) the Company shall pay to Executive in a lump sum in cash
within thirty (30) days after the Date of Termination the aggregate of the
following amounts:
                    A. the sum of (1) Executive’s Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of
(x) Executive’s highest annual bonus from the Company, including any bonus or
portion thereof which has been earned but deferred, for any of the last three
full fiscal years prior to the Date of Termination (such amount being referred
to as the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is 365, (3) any accrued vacation pay to the extent
not theretofore paid, and (4) unless Executive has elected a different payout
date in a prior deferral election, any compensation previously deferred by
Executive (together with any accrued interest or earnings thereon) to the extent
not

 

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Change of Control Employment Agreement
Richard A. Yanke
Page 9
 
theretofore paid (the sum of the amounts described in clauses (1), (2), (3) and
(4) shall be hereinafter referred to as the “Accrued Obligations”); and
                    B. the amount equal to one (1) times the sum of
(x) Executive’s Annual Base Salary at the rate in effect on the Date of
Termination, and (y) Executive’s Highest Annual Bonus;
               (ii) for a period of one (1) year from the Date of Termination,
the Company will allow Executive and/or Executive’s eligible dependents to
continue to participate in any medical and other welfare plans described in
Section 4(b)(iv) of this Agreement to the same extent and upon the same terms as
the Executive and/or Executive’s eligible dependents participated immediately
prior to the Date of Termination; provided that, in the event the Board
determines that Executive’s and/or Executive’s eligible dependents’ continued
participation is not permissible under the terms and provisions of such plans,
the Company shall take such actions as may be necessary to provide Executive
and/or Executive’s eligible dependents (without additional cost to the Executive
and/or Executive’s eligible dependents) with benefits outside such plans having
terms not less favorable than those provided under the Company’s medical and
other welfare plans as of the Date of Termination. If Executive becomes
re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility; and
               (iii) all unvested stock options to acquire stock of the Company
and all awards of restricted stock of the Company held by Executive as of the
Date of Termination shall be immediately and fully vested as of the Date of
Termination and, in the case of stock options, shall be fully exercisable as of
the Date of Termination; and
               (iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”).
          (b) Death, or Disability or Retirement. If Executive’s employment is
terminated by reason of Executive’s death, or Disability or Retirement during
the Employment Period, this Agreement shall terminate without further
obligations to Executive or Executive’s legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as used in this Section 6(b) shall include, without
limitation, and Executive or Executive’s estate and/or beneficiaries shall

 

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Change of Control Employment Agreement
Richard A. Yanke
Page 10
 
be entitled to receive, benefits under such plans, programs, practices and
policies relating to death or disability or retirement, if any, as are
applicable to Executive on the Date of Termination.
          (c) Cause or Voluntary Termination without Good Reason. If Executive’s
employment shall be terminated for Cause during the Employment Period, or if
Executive voluntarily terminates employment during the Employment Period without
Good Reason, this Agreement shall terminate without further obligations to
Executive, other than for payment of Accrued Obligations (excluding the pro-rata
bonus described in clause 2 of Section 6(a)(i)) and the timely payment or
provision of Other Benefits.
          (d) Expiration of Employment Period. If Executive’s employment shall
be terminated due to the normal expiration of the Employment Period, this
Agreement shall terminate without further obligations to Executive, other than
for payment of Accrued Obligations and the timely payment or provision of Other
Benefits.
     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which Executive may qualify, nor, subject to Section 13(f), shall
anything herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
     8. Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against Executive or others.
In no event shall Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to Executive under any
of the provisions of this Agreement and, except as explicitly provided herein,
such amounts shall not be reduced whether or not Executive obtains other
employment.
     9. Costs of Enforcement. In any action taken in good faith relating to the
enforcement of this Agreement or any provision herein, Executive shall be
entitled to be paid any and all costs and expenses incurred by him in enforcing
or establishing his rights thereunder, including, without limitation, reasonable
attorneys’ fees, whether suit be brought or not, and whether or not incurred in
trial, bankruptcy or appellate proceedings. Executive shall also be entitled to
be paid all reasonable legal fees and expenses, if any, incurred in connection
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Richard A. Yanke
Page 11
 
application of Section 4999 of the Internal Revenue Code to any payment or
benefit hereunder. Such payments shall be made within five (5) business days
after delivery of Executive’s respective written requests for payment
accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.
     10. Confidential Information. Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by Executive during
Executive’s employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by Executive
or representatives of Executive in violation of this Agreement). After
termination of Executive’s employment with the Company or such affiliated
companies, Executive shall not, without the prior written consent of the Company
or as may otherwise be required by law or legal process, communicate or divulge
any such information, knowledge or data to anyone other than the Company and
those designated by it.
     11. Certain Additional Payments by the Company.
          (a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 11) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Executive shall be entitled to receive an additional payment
(a “Gross-Up Payment”) in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
          (b) Subject to the provisions of Section 11(c), all determinations
required to be made under this Section 11, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be used in arriving at such determination, shall be made by Ernst & Young LLP
or such other certified public accounting firm as may be designated by Executive
(the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and Executive within 15 business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual,

 

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Change of Control Employment Agreement
Richard A. Yanke
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entity or group effecting the Change of Control, Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 11, shall-be paid by the Company to Executive within five days of the
receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and Executive. 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 hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive.
          (c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive 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. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:
               (i) give the Company any information reasonably requested by the
Company relating to such claim,
               (ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
               (iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
               (iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and

 

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Change of Control Employment Agreement
Richard A. Yanke
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shall indemnify and hold Executive harmless, on an 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.
Without limitation of the foregoing provisions of this Section 11(c), the
Company shall control all proceedings taken in connection with such contest and,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
Executive 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; provided, however, that if the
Company directs Executive to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to Executive, on an interest-free basis
and shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive 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.
          (d) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 11(c), Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company’s
complying with the requirements of Section 11(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 11(c), a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 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, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
     12. Successors.
          (a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Executive’s legal representatives.

 

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Change of Control Employment Agreement
Richard A. Yanke
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          (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
          (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, “Company” shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
     13. Miscellaneous.
          (a) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
          (b) Severability. If any provision or covenant, or any part thereof,
of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
          (c) Status Prior to Effective Date. Executive and the Company
acknowledge that, except as may otherwise be provided under any other written
agreement between Executive and the Company, the employment of Executive by the
Company is “at will” and, subject to Section 1(a) hereof, prior to the Effective
Date, Executive’s employment may be terminated by either Executive or the
Company at any time prior to the Effective Date, in which case Executive shall
have no further rights under this Agreement. However, absent termination of
employment of Executive, this Agreement may not be terminated by the Company
during the Change of Control Period and before the Effective Date. From and
after the Effective Date, this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof, including without
limitation any then-current employment agreement between the Company or any of
its subsidiaries and Executive.
          (d) Governing Law. Except to the extent preempted by federal law, and
without regard to conflict of laws principles, the laws of the State of Florida
shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.

 

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Change of Control Employment Agreement
Richard A. Yanke
Page 15
 
          (e) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or three days after mailing if mailed, first class,
certified mail, postage prepaid:

     
To the Company:
  Seacoast Banking Corporation of Florida
 
  815 Colorado Avenue
 
  Stuart, Florida 34994
 
  Attention: Chief Executive Officer
 
   
To Executive:
  Richard A. Yanke
 
  P. O. Box 414
 
  Stuart, FL 34995

Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
          (f) Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by both parties hereto, which makes specific
reference to this Agreement.
     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Change in Control Employment Agreement as of the date first above written.

            SEACOAST BANKING CORPORATION OF FLORIDA
      By:   /s/ Dennis S. Hudson, III         Dennis S. Hudson, III       
Title:   Chairman        EXECUTIVE:
      /s/ Richard A. Yanke       Richard A. Yanke