Exhibit 10.1


    Exhibit
      10.1:

    EMPLOYMENT
      AGREEMENT

    


    THIS
      AGREEMENT,
      entered
      into this 1st day of January, 2007, by and between Republic First Bancorp,
      Inc.,
      a Pennsylvania bank holding corporation (“Company”), Republic First Bank, a
      Pennsylvania bank (“Bank”), and Harry D. Madonna (“Executive”).

     

    WHEREAS,
      Bank is
      a wholly-owned subsidiary of the Company; and

     

    WHEREAS,
      the
      Company and the Executive are parties to an Employment Agreement dated June
      22,
      2004, which Agreement was Amended by Agreement dated April 20, 2006 (the "Prior
      Employment Agreement"); and 

     

    WHEREAS,
      the
      Company and Bank desire to continue to employ Executive as Chairman of the
      Board
      of Directors, President and Chief Executive Officer of the Company and Chairman
      of the Board of Directors and Chief Executive Officer of the Bank upon the
      terms
      and conditions set forth in this Employment Agreement; and 

     

    WHEREAS,
      the
      Executive desires to continue to be employed in such capacities by the Company
      and the Bank (Bank and Company are sometimes hereinafter referred to jointly
      as
“Employer” or "Employers"), subject to the terms and conditions of this
      Agreement;

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    NOW
      THEREFORE,
      in
      consideration of the mutual promises contained herein, and other good and
      valuable consideration, receipt and sufficiency of which is hereby acknowledged,
      and intending to be legally bound hereby, the parties agree as
      follows:

     

    1.
       Term.
      This
      Agreement shall be effective as of January 1, 2007 (“Effective Date”) and shall
      continue until terminated as provided for in Paragraph 4 below.

     

    2.
       Duties
      and Employment. Company
      hereby employs Executive as Chairman of the Board of Directors, and President
      and Chief Executive Officer of the Company and Chief Executive Officer and
      Chairman of the Board of Directors of the Bank, pursuant to the terms hereof.
      Executive shall faithfully perform such duties as are customarily required
      of a
      Chairman, President and Chief Executive Officer and shall devote such time,
      energy and attention to those duties and to such other duties as may be
      reasonably assigned to him by the Boards pursuant to the terms of this
      Agreement; provided that nothing contained herein shall prohibit Executive
      from
      making personal investments (provided that such investments do not interfere
      with his duties hereunder) or participating or engaging in community, charitable
      and educational affairs that do not interfere with his duties hereunder, or
      simultaneously serving as Chief Executive Officer and Chairman of the Board
      of
      Directors of First Bank of Delaware.

     

           
      3.  Compensation.

     

    (a)  Regular
      Compensation.
      For all
      services rendered by Executive under this Agreement, Employer shall pay
      Executive in accordance with the normal payment practices of the Employers
      an
      annual base salary of Three Hundred Thirty Thousand Dollars ($330,000) until
      April 1, 2007, at which time Executive’s base annual salary shall increase by
      ten (10) percent and shall further increase by (10) percent April 1st
      of the
      second and third years of this Agreement (the "Base Salary").

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Deferred
      Compensation.
      In
      addition to the Base Salary, Employer shall annually pay Executive deferred
      compensation in an amount equal to twenty-five (25) percent of Executives then
      Base Salary plus the amount of Executive annual bonus, as Deferred Compensation
      pursuant to the terms of the Bank’s Deferred Compensation Plan as that plan may
      be changed from time to time.

     

    (c)  Stock
      and Other Compensation Plans.
      Executive shall be eligible to participate in any stock purchase, stock grant,
      stock option, retirement, savings, or other compensation plans presently or
      hereafter maintained by the Company or the Bank for its senior executives.
      Except as set forth in this subsection, eligibility in no way guarantees
      Executive’s receipt of any stock grant, stock option or other compensation
      pursuant to such stock plans, which shall be in the sole discretion of the
      respective Compensation Committees, except that commencing December 29, 2006,
      and thereafter, Executive will annually be granted non-qualified options to
      purchase a minimum of 12,000 shares of the Companies’ stock at the price at the
      close of business on the day that the options are granted, which options shall
      not vest for four (4) years from the date of the options (except as otherwise
      provided in the options grants or in this Agreement) and which shall continue
      for a period of ten (10) years. The Boards, or their designated committees
      or
      officers, shall consider awarding any other such compensation at least annually.
      While not legally required to pay or give any such compensation, except as
      specifically provided for in this Agreement, the Compensation Committees may
      take into account in its determination the performance of the Employers and
      the
      Executive and the general economic and competitive conditions as well as
      Executive’s responsibilities and other pertinent factors.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d) Bonuses.
      Executive
      shall also be able to earn an annual bonus based on a percent of his annual
      Base
      Salary, contingent upon the Bank and the Company, in the sole discretion and
      determination of the Compensation Committee, achieving mutually agreed upon
      annual budget based criteria, including by way of illustration only for the
      Company, net income, stock price, new programs, etc. or, as to the Bank, net
      income, core deposits, loan growth, income from loan programs, and such other
      criteria as shall be set by the Compensation Committee.

     

    (e)  Health,
      Disability and Retirement.
      Employers shall maintain such medical and disability insurance coverage (in
      an
      amount equal to at least Executive’s annual bas salary) and such retirement plan
      or plans for Executive and his dependents as it maintains for other senior
      executives. Executive shall be entitled to four (4) weeks paid vacation per
      annum.

     

    (f) Automobile.
      During
      the term of this Agreement, the Employers shall provide Executive with a luxury
      automobile comparable to the one provided by the Company under its prior
      Agreement with Executive. Employers shall also pay or reimburse the Executive
      for all reasonable expenses associated with the operation, maintenance and
      insurance of such automobile, including expenses for parking spaces convenient
      to the Employers, and including a mobile telephone and other mobile
      communication devices as Executive shall determine are required.

     

    (g) Life
      Insurance Policy.
      Employers agree to reimburse Executive for the costs of term life insurance
      policies in an amount equal to three times Executive’s total annual compensation
      and such other terms and conditions as may be accepted by Executive, the
      beneficiary of which shall be designated by Executive.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)
       Travel
      Expenses. During
      the term of this Agreement, Executive shall be reimbursed for normal and
      reasonable travel expenses incurred on behalf of the Company or the
      Bank.

     

    (i)
       Entertainment
      Expenses.
      Executive will be reimbursed for all reasonable expenses incurred by Executive
      in fulfillment of his duties on behalf of the Company or the Bank, including
      entertainment, business meals and the like.

    (j) Other
      Benefits.
      Executive will be reimbursed for initiation fees, annual dues and expenses
      of
      membership in a lunch club and a golf or country club for himself and his
      spouse.

     

    (k)
       Approvals.
      All
      expenses incurred by the Executive under subparagraphs (h) and (i) hereof shall
      be approved by the Chief Financial Officer of the Company or his
      designee.

     

          
      4.   Term;
      Termination.

     

    (a)
       Unless
      earlier terminated in accordance with the provisions of this Section 4, the
      Executive’s employment under this Agreement shall be for a three-year period
      commencing on the date first set forth above; provided, however, in the event
      neither party shall have given written notice that they desire to terminate
      the
      Agreement within six (6) months of the termination date, the Agreement shall
      automatically continue annually thereafter.

     

    (b)
       Executive
      may terminate this Agreement upon six (6) months written notice to the
      respective Employers.

     

    (c)
       This
      Agreement shall automatically terminate upon the death of the Executive without
      any additional payments of salary or other benefits to Executive except as
      may
      be required by law and as set forth in this Agreement.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d) This
      Agreement shall automatically terminate upon Executive’s “total disability,”
which shall be defined as total disability under Executive’s disability
      insurance policy.

     

    (e)
       The
      Company may terminate Executive immediately for “Good Reason.” For purposes of
      this Agreement, “Good Reason” shall mean (i) breach of a fiduciary duty to
      Employers involving personal profit and which causes material harm to the
      Employers, (ii) conviction of a felony or willful violation of any banking
      law
      or regulation or a crime of moral turpitude, and (iii) gross negligent
      performance of the duties under this Agreement resulting in a material
      impairment of Company’s financial condition.

     

    (f) Executive
      may terminate this Agreement for “Good Cause.” For purposes of this Agreement,
“Good Cause” shall mean failure of either Employer to comply in any material
      respect with any material provision of this Agreement, which failure has not
      been cured within thirty (30) days after a written notice of such noncompliance
      has been given by Executive to one or both of Employers, a change in the
      substantive duties of Executive, a change in location of business or a Change
      of
      Control as that term is defined hereinafter.

     

           
      5.  Payments
      to Executive Upon Termination.

     

    (a) In
      the
      event of the termination of Executive’s employment for any reason, including a
      merger or sale of the Company or the Bank or sale or transfer of a majority
      of
      the stock of the Bank or the Company (any one of which shall be a “Change of
      Control”) or failure of the Employers to continue Executive’s employment at the
      termination of this Agreement or any subsequent employment agreement, but
      excluding Executive’s death or resignation by Executive without cause, or
      termination of Executive for Good Reason as set forth in Section 4(e), as
      consideration for Executive’s services to Employers prior to Executive’s
      termination, 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Employers
      shall pay to Executive a sum equal to three times the amount of Executive’s
      annual Base Salary in effect immediately prior to his termination plus three
      (3)
      times the average bonus paid to Executive over the prior three years. For a
      period of three (3) years after termination of his employment Employers shall
      also pay to Executive in cash additional amounts that correspond to the amounts
      the Employers would have paid in premiums for the life insurance policy covering
      Executive, and shall provide, at no cost to Executive, continuation of his
      health and life insurance benefits in effect immediately prior to his
      termination. In the event such continuation of benefits is not permitted under
      the terms of the insurance contracts applicable to such benefits, shall pay
      to
      Executive in cash the amount that would have been paid for such benefits. In
      addition, Employers shall purchase a new automobile comparable to the one then
      made available to Executive free of all liens, costs, liabilities, or
      encumbrances, plus such funds to reimburse Executive for all fees and costs
      involved in the transfer of title and all federal and state income taxes
      assessed to Executive for such transfer. Upon such termination, all stock
      options, annuities, deferred compensation and pensions held by or for Executive
      shall fully vest. The total benefits set forth in this Section 5(a) shall
      hereinafter be referred to as “Severance Benefits”.

     

    (b) In
      the
      event of a Change of Control, Executive, in his sole discretion, may require
      the
      Employers to pay the entire Severance Benefits to Executive at the date of
      the
      Change of Control. In all other events, the Severance Benefits, at the sole
      discretion of the Company, may be paid in equal monthly payments over thirty-six
      (36) months after termination of Executive’s employment; provided that in the
      event Executive shall die during the period he is receiving Severance Benefits,
      his estate shall be entitled to receive such benefits.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      (c)
        In
        the event that the amounts and benefits payable under this section (the
“Termination Payments”), are such that Employee becomes subject to the excise
        tax provisions of Section 4999 of the Internal Revenue Code of 1986, as amended
        (the “Code”), the Bank shall pay him such additional amount (the “Gross-Up
        Payments”) as will provide Employee with a net amount which, after the payment
        of all federal, state and local excise, employment, and income taxes with
        respect to both the Termination Payments and the Gross-Up Payments will equal
        the net amount Employee would have retained had the initially-calculated
        Termination Payments been subject only to income and employment taxation
        (and
        not to excise taxes under section 4999). For purposes of determining the
        amount
        of Gross-Up Payments, the Employee's income shall be deemed to be taxable
        at the
        highest marginal federal, state, local and (if relevant) foreign tax rates
        in
        effect for the year in which the Gross-Up Payments are made.

       

    

    All
      calculations required to be made under the preceding paragraph shall be made
      by
      the Bank’s independent certified public accountants within thirty (30) days of
      the Termination of Employee's employment, subject to the right of Employee’s
      representative to review the same. The entire amount of Gross-Up Payments shall
      be paid no later than thirty (30) days following confirmation of such amount
      by
      the Bank’s independent certified public accountants. 

    In
      the
      event that any amounts paid by the Bank hereunder are subsequently determined
      to
      be in excess of the amounts owed, whether because estimates were required or
      otherwise ("Excess Amount"), Employee will, upon written notice from the Bank,
      setting forth the calculation of the Excess Amount by Bank’s independent
      certified public accountants (and subject to the right of Employee's
      representatives to review same), pay to Bank the Excess Amount, together with
      interest thereon at the applicable federal rate (as determined under Code
      Section 1274 for the period of time such Excess Amount remained outstanding
      and
      unreimbursed). 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    In
      the
      event the amounts paid by the Bank hereunder are subsequently determined, for
      any reason, to be less than the amounts which should have been paid (as properly
      calculated hereunder)("Deficiency Amount"), the Bank will, within thirty (30)
      days of such determination, pay to the Employee the Deficiency Amount, together
      with (i) interest at the greater of the above-referenced rate or the interest
      he
      may be required to pay to the respective taxing authorities; plus (ii) any
      penalties assessed against him by such authorities. Prior to its payment of
      the
      Deficiency Amount, the Bank shall be entitled to documentation (with supporting
      calculations made by the Employee’s accountant or, in the case of tax
      assessments, copies of such assessments) supporting the Deficiency Amount and
      any interest or penalties imposed by the assessing authorities.

     

    
      The
        parties recognize that the actual implementation of the provisions of this
        subsection are complex and agree to deal with each other in good faith to
        resolve any questions or disagreements arising
        hereunder.

    

     

    (d) Notwithstanding
      the preceding provisions of this Section 5, in the event that (and to the extent
      that) the payment and benefit provisions (including the Gross-Up Payment) are
      determined to be contrary to (and in excess of) those permitted under any
      applicable federal or state banking authority law, rule or regulation, then
      the
      benefits provided under this Section 5 shall be reduced by such amount (but
      no
      more than such amount) as may be required to comply with such law, rule or
      regulation. The Employee shall be entitled to elect which payments and benefits
      shall be reduced and in what manner, subject to reasonable approval of the
      Board
      and to the extent permitted by such federal or state banking authority law,
      rule
      or regulation.

     

    6.
       Confidentiality.
      Executive acknowledges that, in the course of his employment by Employers,
      he
      will have access to confidential information, trade secrets, and unique business
      

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    procedures
      which are the valuable property of Employers. Executive agrees not to disclose
      for any reason, directly or indirectly, any confidential, trade secret or other
      proprietary information, as determined by Employers in their reasonable
      discretion, at any time, during or after the period Executive is employed by
      Employers, for any purpose other than to perform his assigned duties on behalf
      of Employers.

     

    7.
       Remedy.
      Employers and Executive acknowledge and agree that any breach of Paragraph
      6 of
      this Agreement would cause irreparable injury to Employers as the case may
      be,
      and that Employers’ remedy at law for any breach of any of Executive’s
      obligations under Paragraph 6 hereof would be inadequate, and Executive agrees
      and consents that temporary and permanent injunctive relief may be granted
      in
      any proceeding which may be brought to enforce any provision of Paragraph 6
      hereof without the necessity of proof that Employers’ remedy at law is
      inadequate and Employers shall have the right, in their sole discretion to,
      in
      addition to any other remedy it may be entitled to under law or in equity,
      set
      off any amounts due Executive under this Agreement or otherwise as partial
      damages for violations of such paragraph by Executive.

     

    8. Indemnification.
      Employers
      shall indemnify Executive to the full extent permitted by law and by the by-laws
      or certificates of incorporation of the Company and the Banks for the benefit
      of
      its respective officers or directors as in effect on the date
      hereof.

     

    9.
       Notices.
      Any and
      all notices, designations, consents, offers, acceptances, or any other
      communications provided for herein shall be given in writing by registered
      or
      certified mail, return receipt requested to the addresses set forth below or
      as
      may be changed by the parties:

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    If
      to
      Company or Bank:

     

    1608
      Walnut Street

    Philadelphia,
      PA 19103

    Attention:
      Chairman of the Board

    


    If
      to
      Executive:

    


    Harry
      D.
      Madonna

    1320
      North Avignon Drive

    Gladwyne,
      PA 19035-1043

    


    or
      to
      such other or additional person or persons or such other addresses as either
      party may designate to the other party in writing or by like
      notice.

     

    10.
       Invalid
      Provisions.
      The
      invalidity or unenforceability of any particular provision of this Agreement
      shall not affect the other provisions hereof, and the Agreement shall be
      construed in all respects as if such invalid or unenforceable provisions were
      omitted.

     

    11.
       Modification.
      No
      change
      or modification of this Agreement shall be enforceable against any party unless
      the same be in writing and signed by the party against whom enforcement is
      sought.

     

    12.
       Entire
      Agreement.
      This
      Agreement represents the entire agreement between the parties with respect
      to
      the subject matter hereof, and supersedes all prior agreements and
      understandings with respect thereto. The Prior Employment Agreement is hereby
      terminated effective midnight on December 31, 2006.

     

    13.
       Representation
      of Employers.
      The
      Employers represent and warrant that the execution of this Agreement by the
      Employers has been duly authorized by resolution of their respective
      Compensation Committees.

     

    14.
       Headings.
      Any
      heading preceding the text of the several paragraphs hereof are inserted solely
      for the convenience of reference and shall not constitute a part of this
      Agreement, nor shall they affect its meaning, construction or
      effect.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15.
       Successors;
      Assigns. This
      Agreement shall inure to the benefit of, and be binding upon, the parties
      hereto, and their respective heirs, executors, administrators, successors and,
      to the extent permitted herein, assigns. Notwithstanding the foregoing, no
      party
      hereto may assign its rights or obligations hereunder.

     

    16.
       Governing
      Law.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the Commonwealth of Pennsylvania.

     

    17.
       Disputes.
      In the
      event any dispute shall arise between the Executive and the Company or the
      Bank
      as to the terms or interpretation of this Agreement, whether instituted by
      formal legal proceedings or otherwise, including any action taken by the Company
      or the Bank, the Company and the Bank shall reimburse Executive for all costs
      and expenses, including reasonable attorneys’ fees, arising from such dispute,
      proceedings, or actions, notwithstanding the ultimate outcome thereof. Such
      reimbursement shall be paid within ten (10) days of Executive furnishing to
      the
      Company and the Bank written evidence, which may be in the form, among other
      things, of a cancelled check or receipt, of any costs or expenses incurred
      by
      Executive. Any such request for reimbursement by Executive shall be made no
      more
      frequently than at thirty (30) day intervals.

     

    18. Intent
      To Comply With Code Section 409 A.
      With
      respect to any amounts payable under this Agreement to which Section 409A of
      the
      Internal Revenue Code of 1986, as amended (the “Code”) is determined to be
      applicable, and notwithstanding anything in this Agreement to the contrary,
      such
      payments shall be made only at a time and in a manner that complies with all
      applicable provision of Code Section 409A. This Agreement is intended to comply
      with Code Section 409A and applicable Treasury Regulations or other guidance
      as
      may be issued by the Treasury Department or the Internal Revenue Service
      interpreting Code Section 409A so as to avoid the imposition of tax on Executive
      under Code Section 409A, including any transitional rules that may be set out
      in
      Internal Revenue Service notices, regulations or other guidance, and shall
      in
      all instances be interpreted in a manner consistent with such intent. The
      provisions of this Paragraph 18 are intended to be applicable only to payments
      under this Agreement that are treated as nonqualified deferred compensation
      subject to the provisions of Code Section 409A. This Paragraph 18 as included
      in
      this Agreement shall, therefore, be without effect as to any payments that
      are
      not nonqualified deferred compensation payments for purposes of Code Section
      409A.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a) In
      connection with the intent of this Paragraph 18, any payment that constitutes
      a
      nonqualified deferred compensation payment for purposes of Code Section 409A
      that would, but for this Paragraph 18, be in violation of the rule set forth
      in
      Code Section 409A(a)(2)(B)(i) (prohibiting payments to any “specified employee”
before the date which is six months after such employee’s separation from
      service) shall be paid to Executive as soon as practicable following the six
      month anniversary of Executive’s termination of employment.

     

    (b)
       In
      addition, any payment that constitutes a nonqualified deferred compensation
      payment for purposes of Code Section 409A that, but for this Paragraph 18,
      may
      be made either in a series of payments or in a single lump sum, shall in all
      events be made only in the form of a lump sum payment which payment shall be
      made to Executive as soon as practicable on or after the first date as of which
      such payment may be made without violating the rules of Code Section
      409A.

    


    [CONTINUED
      ON NEXT PAGE]


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF,
      the
      undersigned have hereunto set their hands and seals the date and year above
      first written.

    
      	 	 	 
	 	
              REPUBLIC
                FIRST BANCORP, INC.

            	 
	 	 	 
	 	 	 
	 	
              By:
                /s/
                Paul Frenkiel

            	 
	 	
              Its
                CFO

            	 
	 	 	 
	 	
              PaulFrenkiel

            	 
	 	
              [Print
                Name]

            	 
	 	 	 
	 	 	 
	 	
              REPUBLIC
                FIRST BANK

            	 
	 	 	 
	 	 	 
	 	
              By:
                /s/
                Paul Frenkiel

            	 
	 	
              Its
                CFO

            	 
	 	 	 
	 	
              Paul
                Frenkiel

            	 
	 	
              [Print
                Name]

            	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	/s/ Harry
              D.
              Madonna