AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
99.1
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the 1st
day of September, 2007 by and between CORNERSTONE BANK, a commercial bank
formed
under the laws of the State of North Carolina and having its principal place
of
business in Xxxxxx County, North Carolina (hereinafter called the “Company”) and
XXXXXX X. XXXXXX, a resident of Xxxxxx County (hereinafter called the
“Executive”).
RECITALS
WHEREAS,
the Company currently employs Executive as the Company’s President and Chief
Executive Officer pursuant to the terms of that certain Employment Agreement
dated March 15, 2000 (the “2000 Agreement”); and
WHEREAS,
the Company and Executive desire to amend the 2000 Agreement to bring it
into
compliance with Internal Revenue Code (“Code”) Section 409A, including
regulations and guidance issued thereunder (“Section 409A”).
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants
and
agreements set forth herein, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
1. Employment
and Duties.
The
Company hereby continues to employ Executive as the Company’s President and
Chief Executive Officer for the term of this Agreement, and the Executive
hereby
accepts such continued employment upon the terms and conditions hereinafter
set
forth. In accordance with said position, the Executive shall have such
responsibilities, duties, and authority as are appropriate to his position
and
as may be assigned to him from time to time by
the
Board of Directors of the Company. The Executive shall perform, faithfully
and
diligently, his duties on behalf of the Company, as the Board may from time
to
time designate, and shall devote his full time and best efforts to the
performance of his duties hereunder. The Executive shall conduct himself
at all
times in such a manner as to maintain the good reputation of the Company.
The
making of personal investments and engaging in business activities other
than
for the account of the Company shall not be prohibited hereunder; provided,
that
such activities do not compete with the Company, violate the provisions of
any
laws applicable to the Company or Executive or detract from the performance
of
the Executive’s duties hereunder.
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2. Term.
(a) Initial
Term.
The
initial term of this Agreement shall commence on September 1, 2007 and shall
continue through March 15, 2010.
(b) Extended
Terms.
Beginning on March 15, 2008 and annually thereafter, the Board of Directors,
or
a duly authorized committee thereof, shall review the Executive’s performance to
determine if such performance has been satisfactory in the judgment of the
Board, and this Agreement shall automatically be extended for an additional
one-year, unless the Board directs otherwise.
3. Salary,
Benefits and Expenses.
For all
services rendered by the Executive under this Agreement, the Company shall
pay
the Executive compensation and fringe benefits as follows:
(a) Salary.
The
Company shall pay the Executive a salary at the rate of One Hundred Sixty-Five
Thousand Dollars ($165,000) per year, payable in equal monthly installments,
in
arrears.
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(b) Bonuses.
In
addition to the annual salary, the Executive may receive a bonus, the amount
(if
any) of which will be determined in the sole discretion of the Board of
Directors of the Company. The purpose of the bonus will be to provide an
incentive to the Executive and to make the total compensation to the Executive
equal to the reasonable value of his services to the extent the Company is
financially able to pay such compensation. Subject to the provisions of this
Section 3(b), such bonus may be payable at such time or times as the Board
of
Directors may determine. In making its determination of the amount of the
bonus,
if any, to be paid, the Board of Directors will take into account: (i) the
Executive’s qualifications and experience; (ii) the duties and responsibilities
of the Executive; (iii) the services performed and the contributions of the
Executive to the success of the Company; (iv) comparable compensation paid
to
others having similar executive responsibilities in the banking industry
at
financial institutions within the Company’s peer group; and, (v) such other
factors as the Board of Directors shall deem to be relevant. It is understood
and agreed that the Executive shall have no right or expectation to a bonus
until one is declared by the Board of Directors of the Company and that such
declaration shall be in the sole and absolute discretion of the Board of
Directors. Payment of the bonus shall be in a lump sum on or before March
15 of
the Executive’s first taxable year following the year in which the bonus is
declared by the Board of Directors.
(c) Adjustments
in Salary.
The
Company will annually review the Executive’s salary to determine adjustments, if
any, which adjustments must be agreed to by the Executive and the Company’s
Board of Directors.
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(d) Stock
Options.
The
Executive shall be entitled to participate in any stock option plans in which
he
is otherwise eligible to participate and the terms of such plans shall control
the award of stock options to the Executive.
(e) Fringe
Benefit Plans.
The
Executive shall be entitled to participate with other employees of the Company
in all group fringe benefit plans or other group arrangements authorized
and
adopted from time to time unless the Executive shall elect in writing not
to
participate and subject to the Executive otherwise meeting the eligibility
requirements of such plan or plans.
(f) Expenses.
The
Executive shall be entitled to receive reimbursement by the Company for all
reasonable, out-of pocket expenses incurred by the Executive in connection
with
the performance of his services hereunder. The Executive’s right to
reimbursement hereunder shall, however, be subject to such policies and
procedures as may be established by the Company from time to time for its
senior
level employees which policies and procedures may include advance approval
with
respect to any particular expenditure.
(g) Automobile.
The
Company shall purchase an automobile titled in the Company’s name for use by the
Executive in carrying out his duties for the Company, the insurance and
maintenance expenses of which shall be paid by the Company. As additional
compensation, the Executive may use such automobile for person purposes;
provided, that the Executive renders an accounting of his business and personal
use to the Company in accordance with the regulations promulgated under the
Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing,
the
Company may, at its option and in lieu of the foregoing, provide an automobile
allowance to Executive by means of grossed-up salary including taxes.
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(h) Life
Insurance.
During
the term of this Agreement and subject to Executive’s being insurable at
standard rates, the Company shall provide a term life insurance
policy, or other policy agreed to by the parties, for the Executive in a
minimum
amount equal to three times the Executive’s then base annual salary, payable to
the Executive’s designated beneficiary. Adjustments in life insurance benefits
hereunder due to changes in the Executive’s base annual salary will be made by
the Company at the next policy anniversary date, assuming the Executive
continues to be insurable at standard rates.
(i) Club
Fees.
The
Executive will pay his own dues for his membership in the Xxxxxx Country
Club.
The Company will pay any assessments (grossed up to include taxes) incurred
by
the Executive arising from his membership in the Xxxxxx Country
Club.
(j) Vacation.
The
Executive shall be entitled to vacation, with pay, during each calendar year
in
accordance with the Company’s current policy for senior management officials, as
established by the Board of Directors. Vacation days may not be carried over
from one calendar year to the next.
(k) Sickness
and Disability.
The
Executive’s absence from work of short duration due to sickness or disability
shall not result in an adjustment of the Executive’s compensation or rights
hereunder.
One
of
the benefits provided by the Company (which benefit will be continued during
the
term of this Agreement) is disability income insurance for the benefit of
the
Executive. The level and extent of coverage of the disability insurance plan
will not be reduced below the level initially provided as
long
as practicable.
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(l) Other
Compensation and Benefits.
Nothing
herein shall be deemed to preclude the Company from awarding additional
compensation or benefits to Executive during the term of this Agreement,
upon
approval of the Company’s Board of Directors, whether in the form of raises,
bonuses, additional fringe benefits, or otherwise.
(m) Provision
Relating to Reimbursements.
Any of
the expenses eligible for reimbursement under this section in any year shall
not
affect any expenses eligible for reimbursement or in-kind benefits to be
provided in any other year. The Executive’s rights to reimbursement as provided
under this section are not subject to liquidation or exchange for any other
benefit.
4. Non-Disclosure
of Information.
The
Executive recognizes and acknowledges that the Company’s trade secrets and
proprietary processes as they may exist from time to time are valuable, special
and unique assets of the Company’s business, access to and knowledge of which
are essential to the performance of the Executive’s duties hereunder. The
Executive will not, during or after the term of his employment with the Company,
disclose such secrets or processes to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever, nor shall the Executive
make use of any such secrets or processes for his own purposes or for the
benefit of any person, firm, corporation, or other entity (except the Company)
under any circumstances during or after the termination of his employment
with
the Company; provided,
that
after the termination of his employment with the Company these restrictions
shall not
apply
to such secrets and processes which are then, or from time to time thereafter,
in the public domain (provided that the Executive was not responsible, directly
or indirectly, for permitting such secrets or processes to enter the public
domain without the Company’s consent) or which are obtained from a third party
which is not obligated under an agreement of confidentiality with the
Company.
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5. Covenant
Not to Compete.
(a) Except
as
provided in (d) and (e) of this Section 5, for a period of two (2) years
following the termination of the Executive’s employment with the Company, the
Executive covenants and agrees that he will not, directly or indirectly,
Compete
with the Company.
(b) For
the
purposes of this Section 5, the following terms shall have the meanings set
forth below:
(i) The
term
“Compete” shall mean:
(1) securing
deposits for any Financial Institution from any Person residing in the
Territory;
(2) assisting
(other than through the performance of ministerial or clerical duties) any
Financial Institution in making loans to any Person residing in the Territory;
or
(3) inducing
or attempting to induce any Person who was a Customer of the Company at the
date
of the Executive’s termination of employment to change such Customer’s
depository and/or loan relationship from the Company to another Financial
Institution.
(ii) The
words
“directly or indirectly” as they modify the word Compete shall
mean:
(1) acting
as
a consultant, officer, director, independent contractor, or employee of any
Financial Institution in Competition (as defined in paragraph (a) above)
with
the Company in the Territory or
(2) communicating
to such Financial Institution the names or addresses or any financial
information concerning any Person who was a Customer of the Company at the
date
of the Executive’s termination of employment.
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(iii) The
term
“Customer” shall mean any Person with whom the Company had a depository and/or
loan relationship at the date of the Executive’s termination of
employment.
(iv) The
term
“Financial Institution” shall mean any federally insured depository institution
or any Person engaged in the business of making loans of any type, soliciting
deposits, or providing any other service or product that is provided by the
Company or one of its affiliated corporations.
(v) The
term
“Person” shall mean any individual or individuals, corporation, partnership,
fiduciary or association.
(vi) The
term
“Territory” shall mean: (i) that area consisting of Xxxxxx County, North
Carolina as such area is constituted as of the date of this Agreement; and
(ii)
that area which is within a fifteen (15) mile radius of any “full-service”
banking office of the Company at the date of the Executive’s termination of
employment.
(c) In
the
event that any provision of this Section or any word, phrase, clause, sentence
or other portion thereof (including, without limitation, the geographical
and
temporal restrictions contained herein) should be held to be unenforceable
or
invalid for any reason, such provision or portion thereof shall be modified
or
deleted in such a manner as to make the provisions hereof, as modified, legal
and enforceable to the fullest extent permitted under applicable
law.
(d) This
Section 5 shall not apply if the Agreement expires pursuant to Section
2.
(e) In
the
event of a termination pursuant to Section 7(c) or (e) [except a termination
described in Section 9(d)], this Section 5 shall apply only to such periods
during which the Executive is receiving benefits under Section 8 or Sections
9(b) or 9(c); if the Executive elects to waive all or any portion of such
benefits under Sections 8, 9(b) or 9(c) and all remaining benefits thereunder,
then this Section shall not apply to such remaining periods when he is not
receiving any such benefits.
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6. Injunctive
Relief.
If
there is a breach or threatened breach of the provisions of Sections 4 or
5 of
this Agreement, the Company shall be entitled to an injunction restraining
the
Executive
from such breach pending final adjudication pursuant to Section 13 of this
Agreement and to such injunctive relief as is appropriate to enforce such
final
adjudication. Nothing herein shall be construed as prohibiting the Company
from
pursuing any other remedies for such breach or threatened breach.
7. Termination.
This
Agreement shall be deemed to be terminated and the employment relationship
between the Executive and the Company shall be deemed severed upon the
occurrence of any of the events listed in this Section. Provided, however,
that
in order for a “termination” or “severance” to trigger the right to any payment
under this Agreement, the termination or severance must constitute a “separation
from service” as defined by Section 409A.
(a) Upon
the
death of the Executive. In such event, the Company shall pay to the Executive’s
estate the compensation which would otherwise be payable to the Executive
up to
the end of the month in which his death occurs.
(b) The
Company may terminate the Executive’s employment for Cause. For the purposes
hereof, the Company shall have “Cause” to terminate the Executive’s employment
upon the occurrence of any of the following:
(i) Upon
a
determination that the Executive has breached or failed to perform, in any
material respect, any of his duties of employment or the terms of this
Agreement. The Executive may cure such breach, if curable, within a period
of
ten (10) business days after the Company has given written notice of such
breach
to the Executive unless the Company has given written notice to the Executive
on
a previous occasion of the same or a substantially similar
breach;
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(ii) The
violation by the Executive, due to the Executive’s gross negligence or
intentional disregard, of the rules and regulations governing the Company
promulgated by the Federal Deposit Insurance Corporation or the North Carolina
State Banking Commission which violation results in any substantial damage
to
the Company or its reputation;
(iii) The
suspension of the Executive from office or temporary prohibition from
participating in the conduct of the affairs of the Company pursuant to the
direction of the North Carolina State Banking Commission or the Federal Deposit
Insurance Corporation;
(iv)
Upon
the
conviction of the Executive of a felony; or
(v) The
Executive’s engaging in willful misconduct (including chronic substance abuse
materially affecting the performance of his duties) or conduct which is
materially detrimental to the business prospects of the Company or which
has had
or is likely to have a materially adverse effect on the Company’s business or
reputation.
(c) The
Company may terminate the Executive’s employment without Cause.
(d) Upon
the
permanent disability of the Executive as defined in the disability income
insurance policy provided for the Executive by the Company.
(e) Upon
the
Executive’s election to terminate his employment in connection with or within
two years following a Change In Control as set forth in Section 9 of this
Agreement.
(f) Upon
the
expiration of the term of this Agreement in Section 2 hereof.
Except
as
otherwise provided in Sections 8 and 9, upon the termination of this Agreement
as hereinabove set forth, all rights and obligations of the parties will
cease
without further liability effective as of the date of termination; provided,
however,
that
this Agreement shall continue to be binding and effective as to any prior
obligation still owed by either party and as to the post-termination obligations
set forth herein including, without limitation, the obligations of Executive
under Sections 4 and 5 hereof and the obligation of the Company under Sections
8
and 9 hereof.
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8. Benefits
Upon Termination
Without Cause.
Except
as provided in Section 9, if the Company terminates Executive without Cause,
the
Employer will continue to provide the following benefits:
(a) a
lump
sum payment equal to (1) the Executive’s Salary through the date of termination
to the extent not theretofore paid, and (2) any accrued vacation and sick
leave
pay, in each case to the extent not theretofore paid (the sum of the amounts
described in clauses (1) and (2) shall be hereinafter referred to as the
“Accrued Obligations”) payable within 30 days following termination;
and
(b) reimbursement
on a monthly basis for the amount paid by the Executive for continued health
insurance coverage for himself and his dependents under COBRA, if the Executive
elects such coverage; and
(c) the
Executive’s monthly salary, payable on each regular payday through the term of
this Agreement (or the term as extended in accordance with Section 2(b))
as if
the termination had not occurred (the “Remaining Employment Period”);
and
(d) annually,
through the Remaining Employment Period, on the date bonuses are regularly
paid
to other executives, an amount equal to the Executive’s aggregate cash bonus for
the last completed fiscal year prior to termination (if any).
9. Change
in Control.
In the
event that during the term of this Agreement a Change in Control shall occur
with respect to the Company, the term of this Agreement shall be automatically
extended to be equal to a four (4) year period commencing on the day immediately
prior to the date that the Change in Control occurs (the “CIC Extended
Term”).
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(a) Termination
Benefits Related to Change in Control.
If the
Executive separates from service for any reason other than Cause within two
(2)
years following a Change in Control, the Executive shall be entitled to the
following severance benefits:
(i) the
Accrued Obligations, payable within 30 days of such termination;
and
(ii) reimbursement
on a monthly basis for the amount paid by the Executive for continued health
insurance coverage for himself and his dependents under COBRA, if the Executive
elects such coverage; and
(iii) the
amount equal to the product of (1) the number of days that would have remained
in the CIC Extended Term from and after the date of termination had the
termination not occurred, and (2) Executive’s Salary, divided by 365;
and
(iv) the
amount equal to the product of (1) the number of days between the end of
the
previous fiscal year and the end of the CIC Extended Term and (2) Executive’s
aggregate cash bonus for the last completed fiscal year (if any), divided
by
365.
The
sum
of (iii) and (iv) shall be the “CIC Payment” and shall be paid in accordance
with the applicable subsection of this Section 9.
(b) Payment
of Benefit in Connection With or Within One Year Following a Change In
Control.
If, in
connection with or within one year following a Change in Control, the Company
terminates the Executive’s employment for any reason other than Cause or the
Executive terminates his employment with Good Reason, the Company will within
30
days of such termination, subject to Sections 19 and 20, pay to the Executive
in
a lump sum:
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(i)
the
Accrued Obligations;
(ii)
so
much of the CIC Payment as is eligible under Section 409A for treatment as
Involuntary Separation Pay; and
(iii)
the
balance of the CIC Payment [reduced by the amount of Involuntary Separation
Pay
paid pursuant to (ii)].
(c) Payment
of Benefit in the Second Year Following a Change in Control.
If,
during the second year following a Change in Control, the Company terminates
the
Executive’s employment for any reason other than Cause or the Executive
terminates his employment with Good Reason, the Company will, within 30 days
of
such termination, subject to Sections 19 and 20, pay to the Executive in
a lump
sum:
(i)
the
Accrued Obligations;
(ii)
so
much of the CIC Payment as is eligible under Section 409A for treatment as
Involuntary Separation Pay; and
(iii)
the
balance of the CIC Payment [reduced by the amount of Involuntary Separation
Pay
paid pursuant to (ii)].
(d) Payment
of Benefit in Connection With or Within Two Years Following Change in Control
Upon Termination by Executive Other than for Good Reason.
If the
Executive elects to terminate his employment for any reason other than for
Good
Reason in connection with or within 2 years following a Change in Control,
the
Company will pay to the Executive in a lump sum the Accrued Obligations within
30 days following such termination and the CIC Payment on the 367th
day
following such termination.
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(e) Good
Reason.
For
purposes of this Agreement, “Good Reason” shall mean: (i) a material diminution
in the Executive’s authority, duties, or responsibilities; (ii) a material
change in the geographic location at which the Executive must perform the
services; and (iii) any other action or inaction that constitutes a material
breach by the Employer of this Agreement. Provided, that the Executive must
provide notice to the Employer of the condition the Executive contends is
Good
Reason within 30 days of the initial existence of the condition, and the
Employer must have a period of at least 30 days to remedy the condition.
If the
condition is not remedied, the Executive must provide a written Notice of
Termination within 30 days of the end of the Employer’s remedy
period.
(f)
Change
in Control.
For the
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred upon the occurrence of any of the following events: (i) a Change
of
Ownership; (ii) a Change in Effective Control; or (iii) a Change of Asset
Ownership; in each case, as defined herein and as further defined and
interpreted in Section 409A.
(i) For
purposes of this Section 9, “Change of Ownership” shall mean the date one person
(or group) acquires ownership of stock of the Company that, together with
stock
previously held, constitutes more than 50% of the total fair market value
or
total voting power of the stock of the Company, provided that such person
(or
group) did not previously own 50% or more of the value or voting power of
the
stock of the Company.
(ii) For
purposes of this Section 9, “Change in Effective Control” shall mean the date
either (A) one person (or group) acquires (or has acquired during the proceeding
12 months) ownership of stock of the Company possessing 30% or more of the
total
voting power of the Company’s stock or (B) a majority of the Company’s board of
directors is replaced during any 12 month period by directors whose election
is
not endorsed by a majority of the members of the Company’s board of directors
prior to such election.
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(iii) For
purposes of this Section 9, “Change of Asset Ownership” shall mean the date one
person (or group) acquires (or has acquired during the preceding 12 months)
assets from the Company that have a total gross fair market value that is
equal
to or exceeds 40% of the total gross fair market value of all the Company’s
assets immediately prior to such acquisition.
It
is
understood and agreed that neither the Company nor any successor entity shall
be
required to pay any sums under this Section 9 if such payment would be in
violation of the provisions of section 18(k) of the Federal Deposit Insurance
Act or the rules and regulations now or hereafter promulgated by the Federal
Deposit Insurance Corporation.
10. Payment
Related to Excess Parachute Payment.
Notwithstanding any provision in this Agreement to the contrary, if it is
determined that any or the aggregate of all payments, distributions,
accelerations of vesting, awards and provisions of benefits by the Company
to or
for the benefit of the Executive (whether paid or payable, distributed or
distributable, accelerated, awarded or provided pursuant to the terms of
this
Agreement and/or any other agreement or arrangement between the Company and
the
Executive) (a “Payment”) would constitute an “excess parachute payment” within
the meaning of Section 280G of the Code and subject to the excise tax imposed
by
Section 4999 of the Code (the “Excise Tax”), then prior to the making of any
Payment to the Executive, a calculation shall be made of the amount of the
Excise Tax and an additional cash payment (the “Additional Payment”) shall be
promptly made as follows. The Additional Payment shall be the sum of (i)
the
Excise Tax and (ii) the total of any Excise Tax, income tax and any other
tax
payable by the Executive on the amounts specified in item (i) and (ii);
provided, however, that no Additional Payment need be made on the last $1,000
of
Excise Tax, income and other tax payable by the Executive on the amounts
specified in items (i) and (ii). In addition, if it shall be determined at
any
time by reference to Internal Revenue Service (“IRS”) regulations or rulings, as
a consequence of audits or assessments of Executive by the IRS (or in settlement
thereof), by reference to the terms of the final judgment of a court or other
judicial body of competent jurisdiction or as a result of other similar events
requiring
the Executive to pay an Excise Tax, income tax or other tax on the amounts
specified in this Section, that an Additional Payment was less than the sums
specified in items (i) and (ii)), the Company promptly shall make a further
cash
payment to the Executive in the sum of (x) such deficit and (y) any Excise
Tax,
income tax and any other tax on such further cash payment. Any payments required
by this Section shall be made no later than the end of the Executive’s tax year
following the Executive’s tax year in which Executive remits the related
taxes.
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11.
Payment
Upon Death of Executive.
If the
Executive dies after becoming entitled to any payment(s) under this Agreement,
all such payments shall be made to the Executive’s beneficiary, if any,
designated by Executive in a writing delivered to the Company. In the absence
of
such beneficiary designation, all such payments shall be made to the duly
qualified executor or administrator of the Executive’s estate. Said payment(s)
shall be made or shall begin on the first day of the second month following
the
death of the Executive.
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12. Additional
Regulatory Requirements.
Notwithstanding anything contained in this Agreement to the contrary, it
is
understood and agreed that the Bank (or any of its successors in interest)
shall
not be required to make any payment or take any action under this Agreement
if:
(a) The
Bank
is declared by any regulatory authority to be insolvent, in default or operating
in an unsafe or unsound manner; or,
(b) In
the
opinion of counsel to the Bank such payment or action (i) would be prohibited
by
or would violate any provision of state or federal law applicable to the
Bank,
including without limitation the Federal Deposit Insurance Act as now in
effect
or hereafter amended, (ii) would be prohibited by or would violate any
applicable rules, regulations, orders or statements of policy, whether now
existing or hereafter promulgated, of any regulatory authority, or (iii)
otherwise would be prohibited by any regulatory authority.
13. Arbitration.
In the
event of a controversy between or among the Executive and the Company that
they
are in good faith unable to resolve with respect to any matter arising out
of
this Agreement, such matter shall be settled by arbitration in Xxxxxx County,
North Carolina in accordance with the commercial rules then existing of the
American Arbitration Association. The decision of the arbitrator or arbitrators
shall be final and conclusive and there shall be no appeal from the decision
other than for those grounds set forth in applicable North Carolina law
regarding arbitration. Judgment upon such decision may be entered in any
court
of competent jurisdiction, or application may be made to such court for
confirmation of such decision, for judicial acceptance thereof, for an order
of
enforcement or for any other legal remedies which may be necessary to effectuate
the decision. The expense of the arbitrators and arbitration filing fees
shall
be shared equally by the Company and the Executive, but otherwise each party
shall bear its own arbitration costs and expenses, including, without
limitation, its own cost of preparation, attorneys fees and expert
witnesses.
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14. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be delivered by hand or mailed by registered or certified
mail, return receipt requested, first class postage pre-paid, addressed as
follows:
If
to the
Executive:
Xxxxxx
X.
Xxxxxx
0000
Xxxxx Xxxxx
Xxxxxx,
Xxxxx Xxxxxxxx 00000
If
to the
Company:
Cornerstone
Bank
XX
Xxx
0000
Xxxxxx,
Xxxxx Xxxxxxxx 00000
ATTN:
Chairman of the Board
If
delivered personally, the date on which a notice, request, instruction or
document is delivered shall be the date on which such delivery is made and,
if
delivered by mail, three (3) calendar days after the date on which such notice,
request, instruction or document is mailed shall be the date of
delivery.
Any
party
hereto may change the address specified for notices herein by designating
a new
address by notice given in accordance with the procedures hereinabove set
forth.
15. Waiver
of Breach.
The
waiver by either party of a breach of any provision of this Agreement shall
not
operate or be construed as a waiver of any subsequent breach.
16. North
Carolina Law to Govern.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of North Carolina.
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17. Assignment.
The
rights and obligations of the Company under this Agreement shall inure to
the
benefit of and shall be binding upon the successors of the Company.
18. Entire
Agreement.
This
instrument contains the entire agreement of the parties with respect to the
subject matter hereof. It may not be changed orally, but only by an agreement
in
writing signed by the party against whom enforcement of any waiver,
modification, extension or discharge is sought. Provided, however, that no
waiver, modification, extension or discharge shall be effective unless it
complies with the requirements of Section 409A to the extent that Section
409A
applies to such matters.
19. Certain
Payments Delayed for a Specified Employee.
If the
Executive is a “specified employee” as defined in Section 409A, then any
payment(s) under this Agreement on account of a “separation from service” as
defined in Section 409A shall be made and/or shall begin on the first day
of the
seventh month following the date of the Executive’s separation from service to
the extent such payments are not exempt from Section 409A, and the six month
delay in payment is required by Section 409A.
20. Compliance
with Section 409A.
The
Bank and Executive agree that this Agreement shall be administered in accordance
with Section 409A. Executive acknowledges that the Bank has not made any
representation or warranty regarding the treatment of this Agreement or the
benefits payable under this Agreement under federal, state or local income
tax
laws, including Section 409A.
21. Renegotiation,
Acceleration, or Additional Deferral of Benefits.
The
benefits provided under this Agreement shall not be subject to change,
renegotiation, acceleration, or deferral beyond the payment times set forth
herein (the “Changes”) except to the extent that the Changes comply with Section
409A at the time the parties agree to the Changes.
19
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
hereinabove written.
|
COMPANY:
|
|
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CORNERSTONE
BANK
|
|
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BY:
|
________________________________________
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|
____________________,
|
|
|
Chairman
of the Board
|
|
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ATTEST:
|
|
________________________________
|
|
______________
Secretary
|
|
(Corporate
Seal)
|
|
__________________________________________
|
|
Xxxxxx
X. Xxxxxx
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20
