As a consultant to Republic First Bancorp Inc. of Philadelphia, Vernon W. Hill 2nd will be paid $250,000 annually and cannot work with any competing companies in Pennsylvania, New Jersey, or New York, according to an 8K filed Wednesday with the Securities and Exchange Commission.
The $1 billion-asset Republic announced Tuesday that Mr. Hill led a group that invested $10.8 million in the company to help build it into a regional retail player. It also said Mr. Hill, the former top executive of Commerce Bancorp Inc. in Cherry Hill, N.J., had signed a four-year consulting agreement as part of the deal.
In Wednesday's filing, Republic said that Mr. Hill invested $6 million personally and that three other unnamed investors contributed $1.8 million. The rest came from Harry D. Madonna, Republic's chairman and chief executive.
Mr. Hill's agreement allows him to designate a nominee to the boards of both the company and its bank. While Mr. Hill's designee serves on the board, passivity commitments prohibit: attempting to replace any company executives; initiating or supporting a proxy contest; or acquiring more than 10% of the company's stock.
The convertible trust-preferred securities that Republic issued have a 30-year term and a fixed interest rate of 8%. The securities can be converted into shares of common stock at a price of $6.50 under certain circumstances. After they are converted, Mr. Hill's group and Mr. Madonna would each own a 9.9% stake in the company.
