<PAGE>   1
                                                               EXHIBIT 10.16

                         FIRST PALM BEACH BANCORP, INC.
                           CHANGE IN CONTROL AGREEMENT


         This AGREEMENT is made effective as of September 25, 1996, by and
between First Palm Beach Bancorp, Inc. (the "Holding Company"), a corporation
organized under the laws of the State of Delaware, with its office at 215 S.
Olive Avenue, West Palm Beach, Florida and Linda O. Terrell ("Executive"). The
term "Association" refers to First Federal Savings and Loan Association of the
Palm Beaches, the wholly-owned subsidiary of the Holding Company.

         WHEREAS, the Holding Company recognizes the substantial contribution
Executive has made to the Holding Company and wishes to protect his position
therewith for the period provided in this Agreement; and

         WHEREAS, Executive has been elected to, and has agreed to serve in the
position of Senior Vice President-First Federal Savings for the Holding Company,
a positin of substantial responsibility;

         NOW THEREFORE, in consideration of the contribution and
responsibilities of Executive, and upon the other terms and conditions
hereinafter provided, the parties hereto agree as follows:

1.    TERM OF AGREEMENT.

      The term of this Agreement shall be deemed to have commenced as of the
date first above written and shall continue for a period of thirty-six (36) full
calendar months thereafter. Commencing on the first anniversary date of this
Agreement and continuing at each anniversary date thereafter, the Board of
Directors of the Holding Company ("Board") may extend this Agreement for an
additional year. The Board will review the Agreement and the Executive's
performance annually for purposes of determining whether to extend this
Agreement, and the results thereof shall be included in the minutes of the
Board's meeting.

2.    PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL.

      (a) Upon the occurrence of a Change in Control of the Holding company (as
herein defined) followed at any time during the term of this Agreement by the
voluntary or involuntary termination of Executive's employment, other than for
Cause, as defined in Section 2 (c) hereof, the provisions of Section 3 shall
apply. Upon the occurrence of a Change In Control, Executive shall have the
right to elect to voluntarily terminate his employment at any time during the
term of this Agreement following any demotion, loss of title, office or
significant authority, reduction in his annual compensation or benefits, or
relocation of his principal place of employment by more than 30 miles from its
location immediately prior to the Change in Control.

      (b) For purposes of this Plan, a "Change in Control" of the Association
or Holding Company shall mean an event of a nature that; (i) would be required
to be reported in response to Item 1(a) 


                                       1

<PAGE>   2

of the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15 report on Form 8-K, as in effect on the date hereof, pursuant
to Section 13 or 15 (d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); or (ii) results in a Change in Control of the Association or the Holding
Company within the meaning of the Home Owners' Loan Act of 1933 and the Rules
and Regulations promulgated by the Office of Thrift Supervision (or its
predecessor agency), as in effect on the date hereof (provided, that in applying
the definition of change in control as set forth under the rules and regulations
of the OTS, the Board shall substitute its judgment for that of the OTS).

      (c) Executive shall not have the right to receive termination benefits
pursuant to Section 3 hereof upon Termination for Cause. The term "Termination
for Cause" shall mean termination because of a material loss to the Holding
Company or one of its affiliates caused by the Executive's intentional failure
to perform stated duties, personal dishonesty, incompetence, willful violation
of any law, rule, regulation (other than traffic violations or similar offenses)
or final cease and desist order, or any material breach of this Agreement. For
purposes of this Section, no act, or the failure to act, on Executive's part
shall be "willful" unless done, or omitted to be done, not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Holding Company or its affiliates. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly adopted by
the affirmative vote of not less than three-fourths of the members of the Board
at a meeting of the Board called and held for that purpose (after reasonable
notice to Executive and an opportunity for him, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the Board,
Executive was guilty of conduct justifying Termination for Cause and specifying
the particulars thereof in detail. The Executive shall not have the right to
receive compensation or other benefits for any period after termination for
Cause.

3.    TERMINATION BENEFITS.

      (a) Upon the occurrence of a Change in Control, followed at any time
during the term of this Agreement by the voluntary or involuntary termination of
Executive's employment, other than for Termination for Cause, the Holding
Company shall be obligated to pay Executive, or in the event of his subsequent
death, his beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to three (3) times his
then current annual salary. At the election of the Executive such payment may be
made in a lump sum or paid in equal installment installments during the
thirty-six (36) months following the Executive's termination. In the event that
no election is made, payment to the Executive will be made on a basis basis
during the remaining term of this Agreement.

      (b) Upon the occurrence of a Change in Control of the Association or the
Holding Company followed at any time during the term of this Agreement by the
Executive's voluntary or involuntary termination of employment, other than for
Termination for Cause, the Holding Company shall cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage
maintained by the Association for the Executive prior to his severance,


                                      2
<PAGE>   3
except to the extent such coverage may be changed in its application to all
Association employees. Such coverage and payments shall cease upon expiration of
thirty-six (36) months.

      (c) As of the effective date of this Agreement, and annually as of the
first business day of January or soon thereafter, Executive shall make the
election referred to in Section 3(a) hereof with respect to whether the amounts
payable under said Section 3(a) shall be paid in a lump sum or on a basisbasis.
Such election shall be irrevocable for the year for which such election is made
and shall continue in effect until the Executive has made his next annual
election.

      (d) Notwithstanding the preceding paragraphs of this Section 3, in no
event shall the aggregate payments or benefits to be made or afforded to
Executive under said paragraphs (the "Termination Benefits") constitute an
"excess parachute payment" under Section 280G of the Code or any successor
thereto, and in order to avoid such a result Termination Benefits will be
reduced, if necessary, to an amount (the "Non-Triggering Amount"), the value of
which is one dollar ($1.00) less than an amount equal to three (3) times
Executive's "base amount", as determined in accordance with said Section 280G.
The allocation of the reduction required hereby among the Termination Benefits
provided by the preceding paragraphs of this Section 3 shall be determined by
the Executive.

4.    NOTICE OF TERMINATION.

      (a) Any purported termination by the Holding Company, or by the Executive
shall be communicated by Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.

      (b) "Date of Termination" shall mean the date specified in the Notice of
Termination which, in the instance of Termination for Cause, shall be immediate.

5.    SOURCE OF PAYMENTS.

      It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Holding
Company. The Holding Company, however, guarantees payment and provision of all
amounts and benefits due hereunder to the Executive and, if such amount and
benefits due from the Association are not timely paid or provided by the
Association, such amounts and benefits shall be paid and provided by the Holding
Company.

6.    EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

      This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Holding Company and
Executive, except that this Agreement

                                       3
<PAGE>   4
shall not affect or operate to reduce any benefit or compensation inuring to
Executive of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

     Nothing in this Agreement shall confer upon the Executive the right to
continue in the employ of the Holding Company or shall impose on the Holding
Company any obligation to employ or retain the Executive in its employ for any
period.

7.    NO ATTACHMENT.

      (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

      (b) This Agreement shall be binding upon, and inure to the benefit of
Executive, the Holding Company, and their respective successors and assigns.

8.    MODIFICATION AND WAIVER.

      (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

      (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

9.    REINSTATEMENT OF BENEFITS UNDER ASSOCIATION AGREEMENT.

      In the event Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice described
in Section 9(b) of the Change in Control Agreement between Executive and the
Association dated agreedate (the "Association Agreement") during the term of
this Agreement and a Change in Control, as defined herein, occurs the Holding
Company will assume its obligation to pay and the Executive will be entitled to
receive all of the termination benefits provided for under Section 3 of the
Association Agreement upon the notification of the Holding company of the
Association's receipt of a dismissal of charges in the Notice.

10.   EFFECT OF ACTION UNDER ASSOCIATION AGREEMENT.

                                       4
<PAGE>   5
      Notwithstanding any provision herein to the contrary, to the extent that
payments and benefits are paid to or received by Executive under the Association
Agreement between Executive and Association, the amount of such payments and
benefits paid by the Association will be subtracted from any amount due
simultaneously to Executive under similar provisions of this Agreement.

11.   SEVERABILITY.

      If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

12.   HEADINGS FOR REFERENCE ONLY.

      The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

13.   GOVERNING LAW.

      The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Delaware, except to the
extent preempted by Federal law.

14.   ARBITRATION.

      Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Holding Company, in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.

15.   PAYMENT OF LEGAL FEES.

      All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Holding Company if Executive is successful pursuant to a
legal judgment, arbitration or settlement.

16.   INDEMNIFICATION.

      The Holding Company shall provide the Executive (including his heirs,
executors and

                                       5
<PAGE>   6
administrators) with coverage under a standard directors' and officers' 
liability insurance policy at its expense, or in lieu thereof, shall indemnify 
the Executive (and his heirs, executors and administrators) to the fullest 
extent permitted under Delaware law and as provided in the Holding Company's 
certificate of incorporation against all expenses and liabilities reasonably 
incurred by him in connection with or arising out of any action, suit or 
proceeding in which he may be involved by reason of his having been a director 
or officer of the Holding Company (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements.

17.   SUCCESSOR TO THE HOLDING COMPANY.

      The Holding Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Association or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Holding Company's obligations under this Agreement, in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.

18.   SIGNATURES.

      IN WITNESS WHEREOF, First Palm Beach Bancorp, Inc. has caused this
Agreement to be executed by its duly authorized officer, and Executive has
signed this Agreement, on the 25th of September, 1996.

ATTEST:                                           FIRST PALM BEACH BANCORP, INC.



/s/ John C. Trammel                               BY /s/ Louis O. Davis, Jr.
---------------------------                          ---------------------------
Secretary



WITNESS:


/s/ Elizabeth Cook                                  /s/ Linda O. Terrell
---------------------------                         ----------------------------
                                                    Executive

SEAL

                                       6