Document:

exhibit101.htm

  

  

  

EXHIBIT 10.1

 

Retirement Transition Agreement

 

This Retirement Transition Agreement (this “Agreement”) is made and entered into effective July 12, 2011 (the “Effective Date”), by and between Lakeland Financial Corporation, an Indiana corporation (“Employer”) and Charles D. Smith (“Executive”).

 

Recitals

 

A.           Executive is currently serving as Executive Vice President–Commercial of Employer.

 

B.           Executive has communicated his plans to retire from Employer.

 

C.           Employer desires to retain Executive as a non-officer employee for a period prior to his retirement to facilitate an effective and orderly transition, and wishes to provide Executive with certain compensation and benefits in return for Executive’s continuing services.

 

D.           Executive desires to provide such services to Employer as a non-officer employee in return for certain compensation and benefits.

 

E.           Executive and Employer desire to settle fully and amicably all issues between them, including any issues arising out of Executive’s employment with, or retirement from, Employer.

 

F.           Executive and Employer intend for this Agreement to be a complete settlement of all rights of Executive relating to Executive’s employment with, or retirement from, Employer.

 

Agreement

 

In consideration of the foregoing recitals, which are incorporated herein by this reference, and the covenants and agreements of the parties herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1. Prior Agreements.  As of the Effective Date, this Agreement shall supersede and replace any and all prior agreements respecting Executive’s employment by, or service to, Employer, whether or not in writing.

 

Section 2. Transition of Employment.  Effective as of August 31, 2011 (the “Transition Date”), Executive shall cease to be Executive Vice President–Commercial of Employer, provided that Executive shall continue to be employed by Employer as a full-time, non-officer employee following the Transition Date through the Retirement Date.

 

Section 3. Retirement from Employment.  Effective as of February 5, 2012 (the “Retirement Date”), Executive’s employment with Employer shall terminate in full due to Executive’s retirement.

 

  

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Section 4. Compensation and Benefits.  Subject to the terms and conditions of this Agreement, Employer shall compensate Executive for Executive’s services under this Agreement as follows:

 

(a) Base Salary.  From the Effective Date through the Transition Date, Executive shall continue to be compensated at an annual rate of two hundred thirty-one thousand dollars ($231,000) (the “Base Salary”), which shall be payable in accordance with Employer’s normal payroll practices as are in effect from time to time.  Following the Transition Date, Executive shall not be entitled to any further Base Salary payments.

 

(b) Transition Payments.  For the one (1)-year period following the Transition Date, Executive shall be entitled to transition payments equal to one hundred sixty-one thousand seven hundred dollars ($161,700) in the aggregate, which shall be payable in twelve (12) equal monthly installments beginning in September 2011.

 

(c) Retirement and Welfare Benefits.  From the Effective Date through the Retirement Date, Executive and his dependents, as the case may be, shall continue to be eligible to participate in all retirement and welfare benefit plans of Employer, subject to the terms and conditions thereof, on the same basis as his and their participation as of the Effective Date.

 

(d) Paid Time Off.  From the Effective Date through the Retirement Date, Executive shall continue to be entitled to accrue paid time off pursuant to Employer policy as may be in effect from time to time, at the same rate as in effect as of the Effective Date.

 

(e) Perquisites.  From the Effective Date through the Transition Date, Executive shall continue to be entitled to payments in connection with his cell phone and country club membership, at the same rate as in effect as of the Effective Date.  Following the Transition Date, Executive shall not be entitled to any further such payments.

 

(f) 2009 EIBP and 2007-2009 LTIP.  Within five (5) days following February 5, 2012, the six thousand one hundred sixty-one (6,161) restricted stock units issued to Executive on February 5, 2010, in settlement of (i) the bonus earned by Executive under Employer’s Executive Incentive Bonus Plan (the “EIBP”) for the 2009 plan year and (ii) the bonus earned by Executive under the Lakeland Financial Corporation Amended and Restated Long Term Incentive Plan (the “LTIP”) for the 2007-2009 performance period, shall be settled in Stock, subject to the retention of shares by the Company for the minimum required tax withholding, as may be applicable.

 

(g) 2011 EIBP.  Within five (5) days following February 5, 2012, Executive shall be entitled to a lump sum cash payment, in settlement of Executive’s bonus under the EIBP for the 2011 plan year, based upon the actual performance of the Company for 2011.

 

(h) 2009-2011 LTIP.  Within five (5) days following February 5, 2012, Executive shall be entitled to four thousand (4,000) shares of Stock, subject to the retention of shares by the Company for the minimum required tax withholding, as may be applicable, in full settlement of Executive’s bonus under the LTIP for the 2009-2011 performance period.

 

  

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(i) 2010-2012 LTIP.  On March 15, 2013, Executive shall be entitled to  two thousand seven hundred ninety-eight (2,798) shares of Stock, subject to the retention of shares by the Company for the minimum required tax withholding, as may be applicable, in full settlement of Executive’s bonus under the LTIP for the 2010-2012 performance period.

 

(j) 2011-2013 LTIP.  On March 15, 2014, Executive shall be entitled to one thousand four hundred sixty-five (1,465) shares of Stock, subject to the retention of shares by the Company for the minimum required tax withholding, as may be applicable, in full settlement of Executive’s bonus under the LTIP for the 2011-2013 performance period.

 

(k) Stock Options.  Executive’s two thousand eight hundred (2,800) stock options granted December 11, 2001 (which expire no later than December 11, 2011) and ten thousand (10,000) stock options granted December 9, 2003 (which expire no later than December 9, 2013) shall continue to be subject to the terms and conditions of the plan under which they were granted.

 

(l) Pension Plan.  Executive’s rights, benefits and obligations under the Lakeland Financial Corporation Pension Plan shall continue to be subject to the terms and conditions of such plan.

 

(m) Nonqualified Deferred Compensation.  Executive’s rights, benefits and obligations under the Lake City Bank Deferred Compensation Plan shall continue to be subject to the terms and conditions of such plan.

 

(n) Withholding.  Employer shall withhold any taxes that are required to be withheld from the compensation and benefits provided under this Agreement.  Executive acknowledges that Employer’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities and to satisfy all applicable reporting requirements.

 

(o) Termination of Benefits.  Except as provided explicitly in this Section 4, Executive’s participation in all compensation and employee benefit plans, programs, policies, agreements and arrangements of Employer shall cease as of the Retirement Date.  However, nothing contained herein shall limit or otherwise impair Executive’s right to receive pension or similar benefit payments that are vested as of the Retirement Date under any applicable tax-qualified pension or other tax-qualified or non-qualified benefit plans, pursuant to the terms and conditions of the applicable plan.

 

(p) Full Settlement.  Except as provided explicitly in this Section 4 or as may be required by law, Executive shall have no further rights to any compensation or employee benefits from Employer, and Employer shall have no further obligation to provide Executive any compensation or employee benefits, including under the EIBP, the LTIP or any other employee benefit or executive compensation plan, program, policy, agreement or arrangement.

 

(q) Stock.  For purposes of this Agreement, “Stock” means the common stock of Employer, no par value per share.

 

  

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Section 5. Release of Claims and Waiver of Rights.  In consideration of the promises made in this Agreement, Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors and assigns, fully releases and discharges Employer, its predecessors, successors, subsidiaries, affiliates and assigns, and its and their directors, officers, trustees, employees, and agents whether in their individual or official capacities and the current and former trustees or administrators of any retirement or other benefit plan applicable to the employees or former employees of Employer, in their official and individual capacities (the “Releasees”) from any and all liability, claims and demands Executive now has, may have had or may ever have, whether currently known or unknown, including claims, demands and actions, including any and all claims arising from or relating to Executive’s employment or termination of employment, any and all claims relating to wages, bonuses, other compensation, or benefits, and any and all claims relating to any employment contract, any employment discrimination law, including the United States Constitution or the constitution of any state; the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Employee Retirement Income Security Act of 1974; the Age Discrimination in Employment Act (the “ADEA”); Executive Order 11246; and any other federal, state or local statute, ordinance or regulation with respect to employment, and in addition thereto, from any other claims, demands or actions with respect to Executive’s employment with Employer or other association with Employer through the Release Date, including the termination of Executive’s employment with Employer, any right of payment for disability or any other statutory or contractual right of payment or any claim for relief on the basis of any alleged tort or breach of contract under the common law of the State of Indiana or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel and negligence.  Executive acknowledges and agrees, without limiting the generality of the above release, (i) not to file any claim or lawsuit seeking damages or asserting any claims that are lawfully released in this paragraph, (ii) that Executive hereby irrevocably and unconditionally waives any and all rights to recover damages concerning the claims that are lawfully released in this Section 5, (iii) that Executive has not previously filed or joined in any such claims against the Releasees and (iv) that Executive understands and agrees that this release of claims is a GENERAL RELEASE.

 

Section 6. Exclusions from General Release.  Excluded from the release of claims and waiver of rights above are any claims or rights that cannot be waived by law; also excluded is Executive’s right to file a charge with an administrative agency or participate in any agency investigation.  Executive is, however, waiving the right to recover any money in connection with such a charge or investigation.  Executive is also waiving the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency.

 

Section 7. Covenant Not to Sue.

 

(a) A “covenant not to sue” is a legal term that means Executive promises not to file a lawsuit in court.  It is different from the release of claims and waiver of rights contained in Section 5.  Besides releasing and waiving the claims covered by Section 5, Executive shall never sue the Releasees in any forum for any reason covered by the release and waiver language in Section 5.  Notwithstanding such covenant not to sue, Executive may bring a claim against Employer to enforce this Agreement, to challenge the validity of this Agreement under the ADEA or for any claim that arises after Executive’s final execution of this Agreement.  If Executive sues any of the Releasees in violation of this Agreement, Executive shall be liable to them for their reasonable attorneys’ fees and other litigation costs incurred in defending against Executive’s suit.  In addition, if Executive sues any of the Releasees in violation of this Agreement, Employer can require Executive to return all but one hundred dollars ($100) of the money and other benefits paid to Executive pursuant to this Agreement, which the parties hereto agree is, by itself, adequate consideration for the promises and covenants in this Agreement.  In that event, Employer shall be excused from making any further payments or continuing any other benefits otherwise owed to Executive under this Agreement.

 

  

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(b) If Executive has previously filed any lawsuit against any of the Releasees, Executive shall immediately take all necessary steps and execute any and all necessary documents to withdraw or dismiss such lawsuit to the extent Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.

 

Section 8. Non-Disclosure.

 

(a) “Confidential Information” includes all confidential information of Employer, its affiliates and its and their customers, including costs, expenses, margins and budgets; information and materials used in marketing or presenting Employer’s business, including style, format and content; customer and potential customer lists and information pertaining to customer goals and strategies; prices and terms offered or paid for products and services; information and materials related to determining whether products and services should be offered or sold to a customer; supplier and contractor lists, contracts, prices, specifications and other information; techniques, procedures, processes, formulas, equipment, methods, technical data, know-how and compilations of Employer’s business; business proposals and plans and financial and operational information and strategies; Employer’s and any affiliates’ financial and capital structure, creditors, debtors and financial data; any material or information of whatever nature that provides Employer, its affiliates’ or its customers an opportunity to gain an advantage over competitors; and any and all other trade secrets or proprietary and confidential information or materials of Employer, any affiliate or any customer or potential customer.

 

(b) Executive shall not use or disclose Confidential Information to any person or entity for any reason or purpose whatsoever during his employment with Employer, or at any time after the Retirement Date.  Executive shall immediately notify an officer of Employer of any information that becomes known to Executive that indicates that an unauthorized disclosure or use of Confidential Information may have occurred or is likely to occur.  Executive shall not publish or submit for publication any material based upon any business or proprietary research of Employer, Confidential Information or other customer or potential customer information or materials.  It is expressly understood, however, that the obligations of this paragraph shall only apply for as long as and to the extent that the aforesaid Confidential Information has not become generally known to or available for use by the public other than as a result of Executive’s act or omission or a breach by another person of a legal duty or obligation.

 

  

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(c) Executive acknowledges that Employer and its affiliates have expended time, effort and money to obtain and develop the Confidential Information, and that the Confidential Information constitutes special, valuable and unique assets of Employer, without regard to whether or not any of the Confidential Information is embodied in tangible or intangible form.

 

Section 9. Non-Competition and Non-Solicitation.

 

(a) As an essential ingredient of and in consideration of this Agreement, prior to the Retirement Date and for a period of twenty-four (24) months immediately following the Retirement Date (the “Restricted Period”), Executive shall not, directly or indirectly, do any of the following:

 

(i) Engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation or control of, be employed by, associated with, or in any manner connected with, serve as a director, officer or consultant to, lend Executive’s name or any similar name to, lend credit to, or render services or advice to, any person, firm, partnership, corporation or trust that owns, operates or is in the process of forming, a bank holding company, commercial bank or similar entity (a “Competitor”) with an office located, or to be located at an address identified in a filing with any regulatory authority, within a seventy-five (75)-mile radius of any Employer or affiliate office or other business location as of the Retirement Date (the “Restricted Area”); provided, however, that the ownership by Executive of shares of the capital stock of any Competitor whose shares are listed on a securities exchange or quoted on the National Association of Securities Dealers Automated Quotation System and that do not represent more than five percent (5%) of the entity’s outstanding capital stock, shall not violate any terms of this Agreement;

 

(ii) Either for Executive, or any Competitor: (A) induce or attempt to induce any employee of Employer to leave the employ of Employer; (B) in any way interfere with the relationship between Employer and any employee of Employer; or (C) induce or attempt to induce any current customer, supplier, licensee, or business relation of Employer to cease doing business with Employer or in any way interfere with the relationship between Employer and its respective customers, suppliers, licensees or business relations;

 

(iii) Solicit or induce, or attempt to solicit or induce (which prohibition shall include anyone employing Executive or so acting or attempting to act on behalf of or for the benefit of Executive) any client or investor of Employer for any service or product rendered, performed or offered by Employer; or

 

(iv) Serve as the agent, broker or representative of, or otherwise assist, any person or entity in obtaining services or products from any Competitor within the Restricted Area, with respect to the products, activities or services that compete in whole or in part with the products, activities or services of Employer.

 

  

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(b) In the event that Executive is found to have breached any provision set forth in this Section 9, the Restricted Period shall be deemed tolled for so long as Executive was in violation of that provision.

 

Section 10. Reasonable Restrictions.  Executive acknowledges that the restrictions placed upon Executive by this Agreement are reasonable and necessary.  Executive acknowledges that he will be able to earn a livelihood without violating such restrictions.

 

Section 11. Remedies.  Executive recognizes that the remedy at law for violation of this Agreement will be inadequate and that in any event such damages will be substantial but not readily ascertainable and that Employer will suffer continuing and irreparable injury to its business as a direct result of such violation.  Executive agrees that if Executive should breach or fail to perform any term, condition or duty contained in this Agreement, Employer shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction either in law or in equity to obtain the specific performance thereof by Executive or to enjoin Executive from violating the provisions hereof.  Pending the outcome of any such litigation, Employer shall be entitled to obtain temporary, preliminary, and permanent injunctive or other relief, without bond.  Employer shall be entitled to recover from Executive all reasonable attorneys’ fees, court costs and related expenses incurred in enforcing this Agreement.

 

Section 12. Representations by Executive.  Executive warrants that Executive is legally competent to execute this Agreement and that Executive has not relied on any statements or explanations made by Employer or its attorney.  Executive agrees that he shall re-execute this Agreement as of the Retirement Date, and that Employer’s obligations under this Agreement shall be terminated unless Executive re-executes this Agreement as of the Retirement Date, provided that Executive’s failure to re-execute this Agreement as of the Retirement Date shall not revoke Executive’s initial execution of this Agreement or relieve Executive of any duties under this Agreement.  Executive hereby acknowledges that Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the release of all claims and waiver of rights set forth in Section 5.  Executive acknowledges that Executive has been offered at least twenty-one (21) days to consider this Agreement.  After being so advised, and without coercion of any kind, Executive freely, knowingly, and voluntarily enters into this Agreement.  Executive further acknowledges that Executive may revoke this Agreement within seven (7) days after Executive has signed this Agreement and further understands that this Agreement shall not become effective or enforceable until (i) seven (7) days after Executive has signed this Agreement as evidenced by the date set forth below Executive’s signature and (ii) this Agreement has been duly executed by the required parties (the “Release Date”).  Any revocation must be in writing and directed to Employer, Attention: General Counsel.  If sent by mail, any revocation must be postmarked within the seven (7)-day period and sent by certified mail, return receipt requested.

 

Section 13. Non-Disparagement.  Executive shall not, at any time following the signing of this Agreement, engage in any disparagement or vilification of the Releasees, and shall refrain from making any false, negative, critical or otherwise disparaging statements, implied or expressed, concerning the Releasees, including the management style, methods of doing business, the quality of products and services, role in the community, treatment of employees or the circumstances and events regarding Executive’s termination of employment.  Executive shall do nothing that would damage the Releasees’ business reputation or good will.

 

  

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Section 14. Employer Property.

 

(a) Executive shall return to Employer all information, property, and supplies belonging to Employer and/or its affiliates, including any company autos, keys (for equipment or facilities), laptop computers and related equipment, security cards, corporate credit cards, and the originals and all copies of all files, materials, or documents (whether in tangible or electronic form) containing Confidential Information or relating to Employer’s or its affiliates’ business.

 

(b) Executive shall not, at any time on or after the Retirement Date, directly or indirectly use, access or in any way alter or modify any of the databases, e-mail systems, software, computer systems or hardware or other electronic, computerized or technological systems of Employer.  Executive acknowledges that any such conduct by Executive would be illegal and would subject Executive to legal action by Employer, including claims for damages and/or appropriate injunctive relief.

 

Section 15. Future Cooperation.  In connection with any and all claims, disputes, negotiations, governmental or internal investigations, lawsuits or administrative proceedings (the “Legal Matters”) involving Employer, or any of its current or former officers, employees or board members (collectively, the “Disputing Parties” or, individually, a “Disputing Party”), Executive agrees to make himself reasonably available, upon reasonable notice from Employer and without the necessity of a subpoena, to provide information or documents, provide declarations or statements regarding a Disputing Party, meet with attorneys or other representatives of a Disputing Party, prepare for and give depositions or testimony, and otherwise cooperate in the investigation, defense or prosecution of any or all such Legal Matters, as may, in the good faith and judgment of Employer, be reasonably requested.  Employer shall consult with Executive and make reasonable efforts to schedule such assistance so as not to materially disrupt Executive’s business and personal affairs.  Employer shall reimburse all reasonable expenses incurred by Executive in connection with such assistance, including travel, meals, rental car, and hotel expenses, if any; provided such expenses are approved in advance by Employer and are documented in a manner consistent with expense reporting policies of Employer as may be in effect from time to time.

 

Section 16. No Admissions.  Employer denies that it or any of its employees or agents has taken any improper action against Executive.  This Agreement shall not be admissible in any proceeding as evidence of improper action by Employer or any of its employees or agents.

 

Section 17. Confidentiality.  Executive and Employer shall keep the existence and the terms of this Agreement confidential, except for Executive’s immediate family members or his legal or tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.

 

  

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Section 18. Non-Waiver.  Employer’s waiver of a breach of this Agreement by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Agreement.

 

Section 19. Choice of Law; Forum; Attorneys’ Fees.  This Agreement is executed pursuant to and shall be governed by the substantive laws of the State of Indiana without regard to choice-of-law principles.  Any action, dispute or litigation arising out of or relating to this Agreement shall be filed only in the federal or state courts of the State of Indiana.  Except as otherwise set forth herein, the prevailing party in any litigation shall be entitled to recover such parties’ reasonable costs and attorneys’ fees from the other party.

 

Section 20. Entire Agreement.  This Agreement sets forth the entire agreement of the parties hereto, and shall be final and binding as to all claims that have been or could have been advanced on behalf of Executive or Employer pursuant to any claim arising out of or related in any way to Executive’s employment with Employer or the termination of that employment.

 

Section 21. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same Agreement.  Facsimile transmission of any executed original document shall be deemed to be the same as the delivery of the executed original.

 

Section 22. Successors.  This Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs and personal representatives and Employer and its successors, representatives and assigns.

 

Section 23. Modification.  This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

 

Section 24. Enforcement.  The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby.  Furthermore, if the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement.  In addition, Executive agrees and stipulates that breach by Executive of restrictions and requirements under this Agreement will cause irreparable damage to the Releasees in the case of Executive’s breach and Employer would not have entered into this Agreement without Executive binding Executive to these restrictions and requirements.  In the event of Executive’s breach of this Agreement, in addition to any other remedies Employer has and without bond and without prejudice to any other rights and remedies that Employer may have for Executive’s breach of this Agreement, Employer shall be relieved of any obligation to provide compensation or benefits pursuant to this Agreement and shall be entitled to an injunction to prevent or restrain any such violation by Executive and any and all persons directly or indirectly acting for or with Executive.

 

  

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Section 25. Construction.  In this Agreement, unless otherwise stated or the context otherwise requires, the following uses apply: (a) actions permitted under this Agreement may be taken at any time and from time to time in the actor’s reasonable discretion; (b) references to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time; (c) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”; (d) references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality; (e) indications of time of day shall be based upon the time applicable to the location of the principal headquarters of Employer; (f) “including” means “including, but not limited to”; (g) all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise specified; (g) all words used will be construed to be of such gender or number as the circumstances and context require; (h) the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (i) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof.

 

Section 26. Agreement Negotiated.  The subject matter and language of this Agreement have been the subject of negotiations between the parties hereto.  Accordingly, this Agreement shall not be construed against either party hereto on the basis that this Agreement was drafted by such party or its counsel.

 

[Signature page follows]

 

  

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In Witness Whereof, this Agreement has been duly executed as of the dates set forth below.

 

EFFECTIVE DATE EXECUTION

(section to be executed as of the Effective Date set forth in the first paragraph of this Agreement)

 

Charles D. Smith                                                                                     Lakeland Financial Corporation

 

   

______________________                                                                     _____________________________

 

Date:__________________                                                             By:  _____________________________                                                    

 

Title: _____________________________                                                      

 

Date: _____________________________                                                     

 

*           *           *           *           *

 

RETIREMENT DATE EXECUTION

(section to be executed as of the Retirement Date set forth in this Agreement)

 

Charles D. Smith                                                                                     Lakeland Financial Corporation

 

   

_______________________                                                                  _______________________________

 

Date: ___________________                                                          By: ________________________________                                                      

 

Title: _______________________________                                                     

 

Date: _______________________________                                                     

 

  

11Exhibit  4.4 Amended and Restated CCPU 1998 Stock Incentive Plan

Exhibit 4.4

SIXTH AMENDED AND RESTATED
CONTINUOUS COMPUTING CORPORATION
1998 STOCK INCENTIVE PLAN
The Board of Directors of Continuous Computing Corporation (the “Company”) adopted this Sixth Amended and Restated 1998 Stock Incentive Plan on January 4th, 2007, and the stockholders of the Company approved and ratified the amendment and restatement of the 1998 Stock Incentive Plan on January 25, 2007.
1.PURPOSE

The purpose of this Sixth Amended and Restated 1998 Stock Incentive Plan (the “Plan”) is to further the interests of the Company by strengthening the desire of Employees, consultants and advisors to continue their employment with the Company and by securing other benefits for the Company through stock options to be granted hereunder.  Options granted under the Plan are either options intending to qualify as “incentive stock options” within the meaning of Section 422 of the Code or non-qualified stock options.  
2.DEFINITIONS

Whenever used herein the following terms shall have the following meanings, respectively:
(a)“Act” shall mean the Securities Act of 1933, as amended.

(b)“Board” shall mean the Board of Directors of the Company.

(c)“Code” shall mean the Internal Revenue Code of 1986, as amended.

(d)“Committee” shall mean the Compensation Committee appointed by the Board, or if no committee has been appointed, reference to “Committee” shall be deemed to refer to the Board.

(e)“Common Stock” shall mean the Company's Common Stock as described in the Company's Certificate of Incorporation.

(f)“Company” shall have the meaning set forth in the Preamble of the Plan.

(g)“Employee” shall mean in connection with Non-Qualified Options and the  Company's  Non-Qualified Stock Option Agreement (i) any director, officer, actual employee or independent contractor of the Company or any Subsidiary or Parent of the Company, (ii) any individual in an effort to induce said individual to become and remain an employee or independent contractor of the Company, or (iii) any other individual or entity the Committee may deem appropriate to receive a Non-Qualified Option (so long as the grant of the Non-Qualified Option furthers a specific Company purpose and the Committee deems it in the best interests of the Company to grant the Non-Qualified Option to said individual or entity).  In connection with Incentive Options and the Company's Incentive Stock Option Agreement, the term “Employee” shall include only actual employees of the Company or of any Subsidiary or Parent of the Company.  

(h)“Fair Market Value” shall mean the value of the Company's Common Stock determined as follows: (i) if the Company's Common Stock is publicly traded, the mean between the highest and lowest quoted selling prices of the Common Stock or, if not available, the mean between the bona fide bid and asked prices of the Common Stock; or (ii) in the absence of an established market for the Common Stock, the value as determined in good faith by the Committee as of the date of such determination. 

(i)“Incentive Option” shall mean an Option granted under the Plan which is designated as and qualifies as an incentive stock option within the meaning of Section 422 of the Code. 

(j)“Initial Public Offering” shall mean a firm commitment underwritten public offering pursuant to an effective registration statement under the Act covering the offer and sale of the Common Stock.

(k)“Non-Qualified Option” shall mean an Option granted under the Plan which is designated as a non-qualified stock option and which does not qualify as an incentive stock option within the meaning of Section 422 of the Code.  

(l)“Option” shall mean an Incentive Option, as defined in Section 2(i) hereof, or a Non-Qualified Option, as defined in Section 2(k) hereof.  

(m)“Optionee” shall mean any Employee who has been granted an Incentive Option to purchase shares of Common Stock under the Plan and any person (including an Employee) who has been granted a Non-Qualified Option under the Plan.

(n)“Parent” shall have the meaning set forth in Section 424(e) of the Code. 

(o)“Permanent Disability” shall mean termination of employment with the Company or with the consent of the Company by reason of permanent and total disability within the meaning of Section 22(e)(3) of the Code.

(p)“Plan” shall have the meaning set forth in Section 1 hereto. 

(q)“Subsidiary” shall have the meaning set forth in Section 424(f) of the Code.  

3.ADMINISTRATION

(a)The Plan shall be administered either (i) by the Board, or (ii) in the discretion of the Board, by a Committee appointed by the Board. The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies.  

(b)Any action of the Committee with respect to the administration of the Plan shall be taken by majority vote or by written consent of a majority of its members.

(c)Subject to the provisions of the Plan, the Committee or the Board shall have the authority to construe and interpret the Plan, to define the terms used therein, to determine the time or times an Option may be exercised and the number of shares which may be exercised at any one time, to prescribe, amend and rescind rules and regulations relating to the Plan, to approve and determine the duration of leaves of absence which may be granted to participants without constituting a termination of their employment for purposes of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan.  All determinations and interpretations made by the Committee shall be conclusive and binding on all Employees and on their guardians, legal representatives and beneficiaries.  

(d)The Company will indemnify and hold harmless the members of the Board and the Committee from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act, or omission to act, in connection with the performance of such persons' duties, responsibilities and obligations under the Plan, other than such liabilities, costs and expenses as may result from the negligence, gross negligence, bad faith, willful misconduct and/or criminal acts of such person. 

(e)The Company will provide financial information to the Optionees on the same basis as the Company provides such information to its shareholders, which in any event shall include dissemination of the Company's financial statements at least annually.

4.NUMBER OF SHARES SUBJECT TO PLAN

The stock to be offered under the Plan shall consist of up to 14,000,000 shares of Common Stock.  If any Option granted hereunder shall expire or terminate for any reason without having been exercised in full, the unpurchased shares subject thereto shall again be available for purposes of this Plan.
5.ELIGIBILITY AND PARTICIPATION

(a)The Committee shall determine the Employees to whom Options shall be granted, the time or times at which such Options shall be granted and the number of shares to be subject to each Option.  An Employee who has been granted an Option may, if he or she is otherwise eligible, be granted an additional Option or Options if the Committee shall so determine.  An Employee may be granted Incentive Options or Non-Qualified Options or both under the Plan; provided, however, that the grant of Incentive Options and Non-Qualified Options to an Employee shall be the grant of separate Options and each Incentive Option and each Non-Qualified Option shall be specifically designated as such.

(b)In no event shall an Employee be granted in any calendar year, under the Plan and all other plans of the Company and any Subsidiary or Parent of the Company, Incentive Options that are first exercisable during any one calendar year for stock 

with an aggregate Fair Market Value (determined as of the time the option was granted) in excess of $100,000.

6.PURCHASE PRICE

The purchase price of each share covered by the Plan shall be determined by the Committee subject to the following:
(a)The purchase price of each share covered by each Incentive Option shall not be less than 100% of the Fair Market Value of the Common Stock of the Company on the date the Incentive Option is granted; provided, however, that if at the time an Incentive Option is granted the Optionee owns or would be considered to own by reason of Section 424(d) of the Code more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or Parent of the Company, the purchase price of the shares covered by such Incentive Option shall not be less than 110% of the Fair Market Value of the Common Stock on the date the Incentive Option is granted.

(b)The purchase price of each share covered by each Non-Qualified Option shall not be less than 85% of the Fair Market Value of the Common Stock of the Company on the date the Non-Qualified Option is granted; provided, however, that if  the Optionee owns stock possessing more  than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or Parent of the Company, the purchase price of the shares covered by such Non-Qualified Option shall not be less than 110% of the Fair Market Value of the Common Stock on the date the Non-Qualified Option is granted.

7.DURATION OF OPTIONS

The expiration date of each Option and all rights thereunder shall be determined by the Committee.  In the event the Committee does not specify the expiration date of the Option, the expiration date shall be 10 years from the date on which the Option is granted, and shall be subject to earlier termination as provided herein; provided, however, that if at the time an Incentive Option is granted the Optionee owns or would be considered to own by reason of Section 424(d) of the Code more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or Parent of the Company, such Incentive Option shall expire 5 years from the date the Incentive Option is granted unless the Committee selects an earlier date.
8.EXERCISE OF OPTIONS

Unless a more rapid exercise rate is specified by the Committee, Options shall be exercisable at a rate of 25% per year over four (4) years from the date of grant of such Options.  Notwithstanding the foregoing, at no time will Options be exercisable at a rate of less than 20% per year over five (5) years. 

An Optionee may purchase less than the total number of shares for which the Option is exercisable, provided that a partial exercise of an Option may not be for less than 10 shares, unless the exercise is during the final year of the Option, and shall not include any fractional shares.  As a condition to the exercise, in whole or in part, of any Option, the Committee may in its sole discretion require the Optionee to pay, in addition to the purchase price of the shares covered by the Option, an amount equal to any federal, state and local taxes that the Committee has determined are required to be paid in connection with the exercise of such Option in order to enable the Company to claim a deduction or otherwise.   Furthermore, if any Optionee disposes of any shares of stock acquired by exercise of an Incentive Option prior to the expiration of either of the holding periods specified in Section 422(a)(1) of the Code, the Optionee shall pay to the Company, or  the Company shall have the right to withhold from any payments to be made to the Optionee, an amount equal to any federal, state and local taxes the Committee has determined are required to be paid in connection with the exercise of such Option, in order to enable the Company to claim a deduction or otherwise.
9.METHOD OF EXERCISE

(a)To the extent that the right to purchase shares has accrued, Options may be exercised from time to time by giving written notice to the Company stating the number of shares with respect to which the Option is being exercised, accompanied by payment in full, by cash or by certified or cashier's check payable to the order of the Company or the equivalent thereof acceptable to the Company, of the purchase price for the number of shares being purchased and, if applicable, any federal, state or local taxes required to be paid in accordance with the provisions of Section 8 hereof.  The Company shall issue a separate certificate or certificates with respect to each Option exercised by an Optionee.

(b)In the Committee's discretion, payment of the purchase price for the shares with respect to which the Option is being exercised may be made in whole or in part with shares of Common Stock of the Company.  If payment is made with shares of Common Stock, the Optionee, or other person entitled to exercise the Option, shall deliver to the Company certificates 

representing the number of shares of Common Stock in payment for the shares being purchased, duly endorsed for transfer to the Company.  If requested by the Committee, prior to the acceptance of such certificates in payment for such shares, the Optionee, or any other person entitled to exercise the Option, shall supply the Committee with a representation and warranty in writing that he or she has good and marketable title to the shares represented by the certificate(s), free and clear of all liens and encumbrances.  The value of the shares of Common Stock tendered in payment for the shares being purchased shall be their Fair Market Value on the date of the Optionee's exercise.

(c)Notwithstanding the foregoing, the Company shall have the right to postpone the time of delivery of the shares for such period as may be required for it to comply, with reasonable diligence, with any applicable listing requirements of any national securities exchange or any federal, state or local law.  If an Optionee, or other person entitled to exercise an Option, fails to accept delivery of or fails to pay for all or any portion of the shares requested in the notice of exercise, upon tender of delivery thereof, the Committee shall have the right to terminate his or her Option with respect to such shares.

(d)The Company may make loans to Optionees as the Committee, in its discretion, may determine in connection with the exercise of outstanding Options granted under the Plan.  Such loans shall (i) be evidenced by promissory notes entered into by the holders in favor of the Company; (ii) be subject to the terms and conditions set forth in this subsection (d) and such other terms and conditions, not inconsistent with the Plan, as the Committee shall determine; and (iii) bear interest at such rate as the Committee shall determine.  In no event may the principal amount of any such loan exceed the purchase price of the shares of Common Stock covered by the Option, or portion thereof, purchased by the Optionee.  The initial term of the loan, the schedule of payments of principal and interest under the loan, the extent to which the loan is to be with or without recourse against the holder with respect to principal and applicable interest and the conditions upon which the loan will become payable in the event of the holder's termination of employment shall be determined by the Committee; provided, however, that the term of the loan, including extensions, shall not exceed ten (10) years.  Unless the Committee determines otherwise, when a loan shall have been made, shares of Common Stock having a Fair Market Value as of the date of determination at least equal to the principal amount of the loan shall be pledged by the holder to the Company as security for payment of the unpaid balance of the loan and such pledge shall be evidenced by a security agreement, the terms of which shall be determined by the Committee, in its discretion; provided, however, that each loan shall comply with all applicable laws, regulations and rules of the Board of Governors of the Federal Reserve System and any other governmental agency having jurisdiction.

10.NON-TRANSFERABILITY OF OPTIONS

No Option granted under the Plan shall be assignable or transferable by the Optionee, either voluntarily or by operation of law, otherwise than by will or the laws of descent and distribution, and shall be exercisable during his or her lifetime only by the Optionee.
11.CONTINUANCE OF EMPLOYMENT

Nothing contained in the Plan or in any Option granted under the Plan shall confer upon any Optionee any rights with respect to the continuation of his or her employment by the Company or interfere in any way with the right of the Company at any time to terminate such employment or to increase or decrease the compensation of the Optionee from the rate in existence at the time of the grant of an Option.
12.TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR PERMANENT DISABILITY

Except as the Committee may determine otherwise with respect to any Non-Qualified Options granted hereunder:  If an Optionee ceases to be an Employee for any reason other than his or her death or Permanent Disability, any Options granted to him or her under the Plan shall terminate three (3) months from the date on which such Optionee terminates his or her employment (whether voluntarily or involuntarily) unless such Optionee has been rehired by the Company and is an Employee on such date.  During such three (3) month period, the Optionee may exercise any Option granted to him or her but only to the extent such Option was exercisable on the date of termination of his or her employment and provided that such Option has not expired or otherwise terminated as provided herein.  A leave of absence approved in writing by the Committee shall not be deemed a termination of employment for purposes of this Section, but no Option may be exercised during any such leave of absence, except during the first three (3) months thereof.
13.DEATH OR PERMANENT DISABILITY OF OPTIONEE

If an Optionee shall die at a time when he or she is employed by the Company or if the Optionee shall cease to be an Employee by reason of Permanent Disability, any Options granted to him or her under this Plan shall terminate one (1) year after the date of his or her death or termination of employment due to Permanent Disability unless by its terms it shall expire 

before such date or otherwise terminate as provided herein, and shall only be exercisable to the extent that it would have been exercisable on the date of his or her death or his or her retirement due to Permanent Disability.  In the case of death, the Option may be exercised by the person or persons to whom the Optionee's rights under the Option shall pass by will or by the laws of descent and distribution.
14.STOCK PURCHASE NOT FOR DISTRIBUTION

Each Optionee shall, by accepting the grant of an Option under the Plan, represent and agree, for himself or herself and for his or her transferees by will or the laws of descent and distribution, that all shares of stock purchased upon exercise of the Option will be received and held without a view to distribution except as may be permitted by the Act, and the rules and regulations promulgated thereunder.  After each notice of exercise of any portion of an Option, if requested by the Committee, the person entitled to exercise the Option must agree in writing that the shares of stock are being acquired in good faith without a view to distribution except as may be permitted by the Act and the rules and regulations promulgated thereunder.
15.PRIVILEGES OF STOCK OWNERSHIP

No person entitled to exercise any Option granted under the Plan shall have any of the rights or privileges of a shareholder of the Company with respect to any shares of Common Stock issuable upon exercise of such Option until such person has become the holder of record of such shares.  No adjustment shall be made for dividends or distributions of rights in respect of such shares if the record date is prior to the date on which such person becomes the holder of record, except as provided in Section 16 hereof.
16.ADJUSTMENTS

(a)If the number of outstanding shares of Common Stock are increased or decreased, or if such shares are exchanged for a different number or kind of shares or securities of the Company, through reorganization, merger, reverse merger, recapitalization, reclassification, stock dividend, stock split, reverse split, combination of shares or other similar transaction, the aggregate number of shares of Common Stock subject to the Plan as provided in Section 4 hereof and the shares of Common Stock subject to issued and outstanding Options under the Plan shall be appropriately and proportionately adjusted by the Committee. Any such adjustment in the outstanding Options shall be made without change in the aggregate purchase price applicable to the unexercised portion of the Option but with an appropriate adjustment in the price for each share or other unit of any security covered by the Option.

(b)Notwithstanding the provisions of subsection (a) of this Section 16, and subject to any agreement to the contrary, upon the (i) dissolution or liquidation of the Company or (ii) upon any reorganization, merger or consolidation with one or more corporations as a result of which the Company is not the surviving corporation (or is the surviving corporation in a forward subsidiary merger), or upon a sale of substantially all the assets of the Company or of more than 50% of the then outstanding stock of the Company to another corporation or entity (such events under this subsection (ii) deemed a “Change in Control”), the Plan and each outstanding Option shall terminate; provided, however, that each Option, to the extent it has not been assumed, substituted or replaced by the surviving or acquiring corporation in accordance with all of the terms of subsection (c) immediately below shall become fully exercisable subject to the provisions of Sections 9(b) and (c) hereof within thirty (30) days before the effective date of such dissolution, liquidation or Change in Control; 

(c)In the event of a Change in Control, in its sole and absolute discretion, the surviving or acquiring corporation may, but shall not be obligated to, either: (1) assume the Company's rights and obligations under all or part of each Option, (2) substitute for all or part of each Option a substantially equivalent option for the surviving or acquiring corporation's stock,  (3) replace all or part of each Option with the right to receive cash, stock, or other property under such terms and provisions as shall be required substantially to preserve the rights and benefits of each such Option then outstanding under this Plan, as determined by the Board or the Committee, in its sole discretion, or (4) some combination of any of the foregoing.  

(d)Adjustments under this Section 16 shall be made by the Committee, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. No fractional shares of stock shall be issued under the Plan or in connection with any such adjustment.

(e)Change in Control.  Subject to the approval of the Board or the Committee, an Option held by any Employee who is an actual employee of the Company or of any Subsidiary or Parent of the Company prior to the effective time of a Change in Control may be subject to additional acceleration of vesting and exercisability upon or after such event, or upon the Optionee's involuntary termination within a designated period of time before or after such event, as set forth in the Incentive Stock Option Agreement or Non-Qualified Stock Option Agreement, as applicable, for such Option, or as may be provided in any other written 

agreement between the Company (or any Subsidiary or Parent of the Company) and such Employee.  

17.AMENDMENT AND TERMINATION OF PLAN

(a)The Board may from time to time, with respect to any shares at the time not subject to Options, suspend or terminate the Plan or amend or revise the terms of the Plan; provided that any amendment to the Plan shall be approved by a majority of the shareholders of the Company if the amendment would (i) materially increase the benefits accruing to participants under the Plan; (ii) increase the number of shares of Common Stock which may be issued under the Plan, except as permitted under the provisions of Section 16 hereof; or (iii) materially modify the requirements as to eligibility for participation in the Plan.

(b)No amendment, suspension or termination of the Plan shall, without the consent of the Optionee, impair any rights or obligations under any Option theretofore granted to such Optionee under the Plan.

(c)The Board and the Committee may at any time amend the terms of any one or more Options granted under the Plan.  However, the terms and conditions of any Option granted to an Optionee under the Plan may be modified or amended in a manner that impairs any rights or obligations under any Option only by a written agreement executed by the Optionee and the Company.  Additionally, if any amendment or modification of an Incentive Option would constitute a “modification, extension or renewal” within the meaning of Section 424(h) of the Code, such amendment shall be null and void unless the amendment contains an acknowledgment by the parties substantially in the following form:  “The parties hereto recognize and agree that this amendment constitutes a modification, renewal or extension, within the meaning of Section 424(h) of the Code, of the option originally granted ________.”

18.EFFECTIVE DATE OF PLAN

This Plan shall become effective upon adoption by the Board and approval by the Company's shareholders; provided, however, that prior to approval of the Plan by the Company's shareholders, but after adoption by the Board, Options may be granted under the Plan subject to obtaining such shareholders' approval.  Notwithstanding the foregoing, such shareholders' approval must occur no later than 12 months after the date of adoption of the Plan by the Board.
19.TERM OF PLAN

No Option shall be granted pursuant to the Plan after 10 years from the earlier of the date of adoption of the Plan by the Board or the date of approval of the Plan by the Company's shareholders.
20.RIGHT TO REPURCHASE AND RIGHT OF FIRST REFUSAL

Unless otherwise agreed to by the Committee, if an Optionee shall cease to be an Employee, the Company shall have the right, in its sole discretion, to repurchase all or any portion of the Common Stock purchased by the Optionee upon the exercise of an Option at the higher of the Fair Market Value or the Optionee's original purchase price within ninety (90) days of the date that such Employee's services with the Company ceased or terminated (or in the case of Options exercised after the date of termination, within ninety (90) days after the date of exercise).  Any shares of Common Stock repurchased by the Company hereunder shall again be available for issuance under the Plan.  Any repurchase shall be for cash or cancellation of purchase money indebtedness. 
Unless otherwise agreed to by the Committee, the Company shall have the right of first refusal, exercisable in connection with any proposed sale, hypothecation or other disposition of the Common Stock purchased by the Optionee pursuant to an Option.  In the event the holder of such shares desires to accept a bona fide third-party offer for any or all of such shares, the Common Stock shall first be offered to the Company upon the same terms and conditions as are set forth in the bona fide offer.
Each Option may provide, at the Committee's discretion, that the rights granted by this Section shall lapse and cease to have effect upon any of the following: (1) the first date on which the Common Stock is held of record by more than five hundred (500) persons, (2) determination by the Board that a public market exists for the outstanding shares of the Common Stock or (3) the consummation of an Initial Public Offering.
21.MARKET STAND-OFF

In connection with an Initial Public Offering or any subsequent underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Act, an Optionee shall agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the repurchase of, or otherwise dispose or transfer for value or otherwise 

agree to engage in any of the foregoing transactions with respect to any Common Stock without the prior written consent of the Company or its underwriters, for such period of time from and after the effective date of such registration statement as may be requested by the Company or such underwriters, provided, however, that in no event shall such period exceed one hundred-eighty (180) days.
22.LEGENDS

All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed and any applicable federal or state securities laws, or as may otherwise be appropriate to administer the Plan, and the Committee may cause a legend or legends to be placed on such certificates to evidence such restrictions.

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