EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT
Exhibit 99.2
EMPLOYMENT AND CHANGE
OF CONTROL AGREEMENT
OF CONTROL AGREEMENT
THIS EMPLOYMENT AND CHANGE OF CONTROL AGREEMENT (this “Agreement”) is made and entered as of
the 18th day of December, 2007 by and among NewBridge Bancorp, a North Carolina
corporation (the “Bancorp”), and “NewBridge Bank” (the “Bank”) (the Bancorp and the Bank are
collectively referred to as the “Employer”), and Xxxxxxx Xxxxxxxxx (“Executive”).
BACKGROUND
WHEREAS, the expertise and experience of Executive, and Executive’s relationships and
reputation in the financial institutions industry are extremely valuable to the Employer; and
WHEREAS, it is in the best interests of the Employer to maintain an experienced and sound
executive management team to manage the Employer and to further the Employer’s overall strategies
to protect and enhance the value of its shareholders’ investments; and
WHEREAS, the Employer and Executive desire to enter into this Agreement to establish the
scope, terms and conditions of Executive’s employment by the Employer
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Effective Date. The effective time and date of this Agreement shall be deemed to
be 12:00:01 o’clock, a.m., on the date of its making set forth above (the “Effective Date”).
2. Definitions. The following defined terms are defined in the referenced Sections of
this Agreement.
| Term | Section | |||
| Accrued Obligations | Section 8(a)(i)(A) | |||
| Base Salary | Section 6(a) | |||
| Bancorp Board | Section 9(b) | |||
| Bank Board | Section 6 | |||
| Bank Group | Section 12(a) | |||
| Benefit Plans | Section 6(c) | |||
| Business | Section 12(a) | |||
| Cause | Section 7(b) | |||
| Change of Control | Section 9(b) | |||
| Change of Control Termination | Section 9(a) | |||
| Change of Control Termination Date | Section 9(a) | |||
| Code | Section 4 | |||
| Continuing Period | Section 9(c)(ii) | |||
| Commissioner | Section 14(d) | |||
| Date of Termination | Section 7(f) |
| Term | Section | |||
| Disability | Section 7(a) | |||
| Disability Effective Date | Section 7(a) | |||
| Effective Date | Section 1 | |||
| Employment Period | Section 4 | |||
| FDIC | Section 14(d) | |||
| Good Reason | Section 7(c) | |||
| Group | Section 9(b) | |||
| Incumbent Directors | Section 9(b) | |||
| ISOs | Section 8(b) | |||
| 1934 Act | Section 9(b) | |||
| Notice of Termination | Section 7(e) | |||
| NSOs | Section 8(b) | |||
| Other Benefits | Section 8(b) | |||
| Person | Section 9(b) | |||
| Remaining Employment Period | Section 8(a)(i)(B) | |||
| Restricted Period | Section 12(a) | |||
| Section 409A | Section 4 | |||
| Terminate | Section 4 | |||
| Welfare Benefit Plans | Section 6(d) |
3. Employment. Executive is employed as Executive Vice-President, Chief Information
Officer. Executive’s responsibilities, duties, prerogatives and authority in such executive
offices, and the clerical, administrative and other support staff and office facilities provided to
him, shall be those customary for persons holding such executive offices of institutions that are a
part of the financial institutions industry.
4. Employment Period. Unless earlier Terminated in accordance with Sections 7 or 9
hereof, Executive’s employment shall be for a twenty-four (24) month term beginning as of the
Effective Date (the “Employment Period”). For purposes of this Agreement, “Terminate” shall mean,
when used in connection with a cessation of employment, that the Executive has incurred a
separation from service as defined in Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and guidance and regulations issued thereunder (“Section 409A”).
5. Extent of Service. During the Employment Period, and excluding any periods of
vacation, sick or other leave to which Executive is entitled under this Agreement, Executive agrees
to devote reasonable attention and time to the business and affairs of the Bank commensurate with
his offices, and, to the extent necessary to discharge the responsibilities assigned to Executive
hereunder, to use Executive’s reasonable best efforts to perform faithfully and efficiently
Executive’s responsibilities and duties under this Agreement.
6. Compensation and Benefits.
(a) Base Salary. During the Employment Period, the Employer will pay to Executive a
base salary at the rate of at least $185,000 per year (“Base Salary”), less normal withholdings,
payable in equal monthly or more frequent installments as are customary under the Bank’s payroll
practices from time to time. In accordance with the policies and procedures of the Board of
Directors of the Bank (the “Bank Board”), the Bank shall review Executive’s total compensation at
least annually and in its sole discretion may adjust Executive’s total compensation from year to
year, but during the Employment Period the Bank may not decrease Executive’s Base Salary below
$185,000; provided further, however, that periodic increases in Base Salary, once granted, shall
not be subject to revocation.
The annual review of Executive’s total compensation will consider, among other things, changes in
the cost of living, Executive’s own performance and the Bancorp’s consolidated performance.
(b) Incentive Plans. During the Employment Period, Executive shall be entitled (i) to
participate in all of executive management incentive plans of the Employer, and any successor or
substitute plans; (ii) to participate in long-term incentive plans of the Employer, and any
successor or substitute plans; and, (iii) to participate in all stock option, stock grant and
similar plans of the Employer, and any successor or substitute plans, in each of the foregoing
cases in at least as favorable a manner as any participant who is a member of the senior executive
management of the Employer at the same level as Executive.
(c) Savings and Retirement Plans. During the Employment Period, Executive shall be
entitled to participate in all savings, pension and retirement plans (including supplemental
retirement plans), practices, policies and programs applicable generally to senior executive
employees of the Employer (the “Benefit Plans”), and on at least as favorable a basis as any other
participant who is a member of the senior executive management of the Employer at the same level as
Executive.
(d) Welfare Benefit Plans. During the Employment Period, Executive and/or Executive’s
family, as the case may be, shall be eligible for participation in and shall receive all benefits
under all welfare benefit plans, practices, policies and programs provided by the Employer
(including, without limitation, medical, hospitalization, prescription, dental, disability,
employee life, group life, accidental death and dismemberment, and travel accident insurance plans
and programs) (“Welfare Benefit Plans”) to the extent applicable generally to senior executive
employees of the Employer.
(e) Expenses. During the Employment Period, Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the
policies, practices and procedures of the Employer to the extent applicable generally to other
senior executive employees of the Employer. The expenses eligible for reimbursement under this
paragraph in any year shall not affect any expenses eligible for reimbursement or in-kind benefits
in any other year. Executive’s rights under this paragraph are not subject to liquidation or
exchange for any other benefit.
(f) Fringe and Similar Benefits. During the Employment Period, Executive shall be
entitled to fringe benefits in accordance with the plans, practices, programs and policies of the
Employer in effect for their senior executive employees.
(g) Vacation, Sick and Other Leave. During the Employment Period, Executive shall be
entitled annually to a minimum of thirty three (33) business days of paid vacation and shall be
entitled to those number of business days of paid disability, sick and other leave specified in the
employment policies of the Employer.
7. Termination of Employment (Other Than In Connection With A Change Of Control).
(a) Death or Disability. Executive’s employment with the Employer shall Terminate
automatically upon Executive’s death during the Employment Period. If the Employer determines in
good faith that the Disability of Executive has occurred during the Employment Period (pursuant to
the definition of Disability set forth below), it may give to Executive written notice in
accordance with Section 7(e) and 16(h) of this Agreement of their intention to Terminate
Executive’s employment. In such event, Executive’s employment with the Employer shall Terminate
effective on the 60th day after receipt of such written notice by Executive (the “Disability
Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have
returned to full-time performance of Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of Executive from Executive’s
duties with the Employer on a full-time basis for 90 consecutive business days as a result of
incapacity due to mental or physical illness or injury which is determined to be total and
permanent by a physician selected by the Employer, or the insurers of the Employer, and acceptable
to Executive or Executive’s legal representative, which acceptance shall not be unreasonably
withheld, subject to (i) the Employer’s obligations, and Executive’s rights, under (A) the
Americans With Disabilities Act, 42 U.S. C. §§ 1210 et seq., and (B) the Family and Medical Leave
Act, 29 U. S.C. §§ 2601 et seq. (and the regulations promulgated under the foregoing Acts), and
(ii) the exclusion from such 90 business day calculation of any business days constituting vacation
days under Section 6(g) and any business days which an employee is permitted to be absent under the
disability, sick or other leave policies of the Employer.
(b) Cause. The Employer may Terminate Executive’s employment with the Employer for
Cause. For purposes of this Agreement, “Cause” shall mean:
| (i) | the willful and continued failure of Executive to perform substantially Executive’s duties with the Bank, other than any such failure resulting from Disability, after a written demand for substantial performance is delivered to Executive by the Bank Board, its designee, the President and Chief Executive Officer, or his designee (collectively referred to as “Management”), which specifically identifies the manner in which Management believes that Executive has not substantially performed Executive’s duties; | ||
| (ii) | the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Employer; | ||
| (iii) | continued insubordination with respect to directives of Management after receipt of a written warning from Management with respect thereto; or | ||
| (iv) | a willful act by Executive which constitutes a material breach of Executive’s fiduciary duty to the Employer which is intended by Executive to injure the reputation or business of the Employer. |
For purposes of this provision, no act or failure to act on the part of Executive shall be
considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without
reasonable belief that Executive’s action or omission was in the best interests of the Employer.
Any act, or failure to act, based upon authority given pursuant to resolutions duly adopted by the
Employer Board or based upon the advice of counsel for the Employer shall be conclusively presumed
to be done, or omitted to be done, by Executive in good faith and in the best interests of the
Employer and to not constitute insubordination.
(c) Good Reason. Executive may Terminate Executive’s employment with the Employer for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean: (i) a material diminution
in Executive’s authority, duties, or responsibilities; (ii) a material change in the geographic
location at which 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 Executive must
provide notice to the Employer of the condition 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, Executive must provide a Notice of
Termination as set forth in Section 7(e) within 30 days of the end of the Employer’s remedy period.
(d) Without Cause. The Employer may Terminate Executive’s employment with the
Employer for any reason not set forth in Sections 7(a) and (b). Such Termination shall be a
termination without cause (“Termination Without Cause”).
(e) Notice of Termination. Any Termination (other than for death) shall be
communicated by a Notice of Termination given in accordance with Section 16(h) of this Agreement.
For purposes of this Agreement, a “Notice of Termination” means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of Executive’s employment under the provision so indicated, and (iii) if the Date
of Termination (as defined below) is other than the date of receipt of such notice, specifies the
Termination date (which date shall be not more than 30 days after the giving of such notice except
as otherwise provided in Section 7(a)). The failure to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Disability, Cause, or Good Reason shall not
waive any right of Executive or the Employer hereunder or preclude Executive or the Employer from
asserting such fact or circumstance in enforcing Executive’s or the Employer’s rights hereunder.
(f) Date of Termination. “Date of Termination” means (i) if Executive’s employment is
Terminated by the Employer for Cause or Without Cause, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if Executive’s employment
is Terminated by Executive for Good Reason, the date of receipt of the Notice of Termination, and
(iii) if Executive’s employment is Terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the Disability Effective Date, as the case
may be.
8. Obligations of the Employer Upon Termination (Other Than In Connection With A Change Of
Control). The provisions of this Section 8 apply only to Terminations that are not in
connection with a Change of Control.
(a) Termination Without Cause or for Good Reason. If, during the Employment Period,
the Employer shall Terminate Executive’s employment Without Cause or the Executive shall Terminate
Executive’s employment for Good Reason, then in consideration of Executive’s services rendered
prior to such Termination;
| (i) | the Employer shall pay to Executive a lump sum in cash on the 30th day after the Date of Termination equal to the aggregate of the following amounts: |
| A. | the sum of (1) Executive’s Base 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”); and | ||
| B. | the amount equal to the product of (1) the number of days that would have remained in the Employment Period from and after the Date of Termination had the Termination not occurred (the “Remaining Employment Period”), and (2) Executive’s Base Salary divided by 365; and |
| C. | the product of (1) Executive’s aggregate cash bonus for the last completed fiscal year, whether paid to Executive under Section 6 above or otherwise paid to Executive, and (2) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is 365. |
| (ii) | for the Remaining Employment Period, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Employer shall continue to provide benefits to Executive and/or Executive’s family at least equal to those which would have been provided to them in accordance with the Welfare Benefit Plans if Executive’s employment had not been terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially the same benefits under the other employer’s plans as Executive would receive under the Welfare Benefit Plans under this item (ii), the benefits provided under this Item (ii) shall be secondary to those provided under such other employer’s plans during such applicable period of eligibility. For purposes of determining eligibility and years-of-service credit (but not the time of commencement of benefits) of Executive for retiree benefits pursuant to such Welfare Benefit Plans, to the extent permitted by the terms of the Welfare Benefit Plans, Executive shall be considered to have remained employed throughout the Remaining Employment Period and to have retired on the last day of such period; and | ||
| (iii) | to the extent not theretofore paid or provided, the Employer shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided herein or which Executive is eligible to receive under any Welfare Benefit Plan. |
(b) Death. If Executive’s employment is terminated by reason of Executive’s death
during the Employment Period, this Agreement shall terminate without further obligations to
Executive’s legal representatives under this Agreement, except that: (i) Accrued Obligations shall
timely be paid as provided below; (ii) Other Benefits shall be timely paid or provided as described
below; (iii) all stock options that are “incentive stock options” (“ISOs”), as described in Section
422 of the Code, previously granted to Executive that vested at or prior to the Date of Termination
shall remain exercisable for the longer of twelve (12) months and the exercise period in effect
immediately prior to the Date of Termination; (iv) all nonqualified stock options (“NSOs”) shall
remain exercisable for the period of exercise in effect immediately prior to the Date of
Termination; (v) all options previously granted to Executive and scheduled to vest in the year of
death shall immediately vest and be exercisable for the exercise period set forth in the applicable
grants; and (vi) Executive’s rights to all benefits under all Benefit Plans that are
“non-qualified” plans shall be 100% vested, regardless of Executive’s age or years of service, at
the time of Executive’s death. Accrued Obligations shall be paid to Executive’s estate or
beneficiary, as applicable, in a lump sum in cash on the 30th day after the Date of Termination.
With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this
Section 8(b) shall mean, and Executive’s estate and/or beneficiaries shall be entitled to receive,
all benefits under the Employer’s Welfare Benefit Plans relating to death benefits. Without
limiting the foregoing, for one (1) year after Executive’s death, the Bank shall pay any premium
required for any “qualified beneficiary” to continue his or her health care coverage in accordance
with Title 1, Part 6 of the Employee Retirement Security Act of 1974, as amended.
(c) Disability. If Executive’s employment is terminated by reason of Executive’s
Disability during the Employment Period, this Agreement shall terminate without further obligations
to Executive, except that: (i) Accrued Obligations shall be timely paid as provided below; (ii)
Other Benefits shall be timely paid or provided as described below; (iii) all options that are ISOs
and that vested at or prior to the Date of Termination shall remain exercisable for the lesser of
twelve (12) months and the period of exercise in effect immediately prior to the Date of
Termination; (iv) all options previously granted and scheduled to vest in the year in which the
Date of Termination occurs shall immediately vest and be exercisable (A) in the case of ISOs, for
twelve (12) months from the Date of Termination, and (B) in the case of NSOs, for the exercise
period set forth in the applicable grant; and (v) all other options that vested at or prior to the
Date of Termination shall remain exercisable for the period of exercise in effect immediately prior
to the Date of Termination. Accrued Obligations shall be paid to Executive in a lump sum in cash
on the 30th day after the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 8(c) shall include, without limitation, and
Executive shall be entitled after the Date of Termination to receive, (1) all disability benefits
under all Welfare Benefit Plans relating to disability, and (2) for the remainder of the Remaining
Employment Period all benefits available to Executive under all Welfare Benefit Plans.
(d) Cause. If Executive’s employment shall be Terminated for Cause during the
Employment Period, this Agreement shall terminate without further obligations to Executive, except
that (i) the Accrued Obligations shall be paid in a lump sum in cash on the 30th day after the Date
of Termination, and (ii) Other Benefits shall be paid or provided in a timely manner, in each case
to the extent theretofore unpaid; provided, however, that Executive’s right to continue to
participate in Welfare Benefit Plans shall terminate on the 30th day following the Date of
Termination, subject to his rights under the Consolidated Omnibus Budget Reconciliation Act of
1985, 29 U.S.C. §§ 1161 et seq.
9. Termination In Connection With a Change of Control.
(a) Change of Control Termination. In the event that, at the time of or within one
(1) year after a Change of Control, and during the Employment Period, the Employer Terminates
Executive’s employment Without Cause, or Executive Terminates Executive’s employment for Good
Reason (each a “Change of Control Termination”), Executive shall be entitled to receive the
payments and benefits specified in this Section 9. The date on which the Employer or Executive
receives notice in accordance with Section 16(h) of a Change of Control Termination shall be deemed
the “Change of Control Termination Date.”
(b) Definition of Change of Control. A “Change of Control” shall be deemed to have
occurred upon (i) any “Person” or “Group” (as defined in or pursuant to Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the “1934 Act”), but not including Bancorp, any
subsidiary of Bancorp, or any “employee benefit plan” (as defined in or pursuant to the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1002(3), and as used herein “Person” or
“Group”) becoming the “beneficial owner” (as defined in Rule 13d-3 under the 0000 Xxx) or otherwise
acquiring control, directly or indirectly, of securities of Bancorp or the Bank representing
twenty-five percent (25%) or more of the voting power of the outstanding securities of Bancorp or
the Bank; (ii) the acquisition by any Person or Group in any manner of the ability to elect, or to
control the election, of a majority of the directors of Bancorp; (iii) the merger of Bancorp into
another entity, the merger of any entity into Bancorp or the acquisition of assets by Bancorp, in
any such case with the result that the beneficial owners of Bancorp’s outstanding securities
immediately prior to such transaction do not beneficially own more than sixty percent (60%) of
Bancorp’s outstanding securities after the consummation of such transaction; (iv) the sale or other
transfer of more than fifty percent (50%) of the assets of Bancorp or the Bank to any entity not
controlled by Bancorp; (v) the consummation of any transaction by Bancorp that
results (A) in the majority of the Board of Directors of Bancorp (the “Bancorp Board”) after the
consummation of such transaction not being composed of Incumbent Directors or (B) the beneficial
owners of Bancorp’s outstanding securities immediately prior to the consummation of such a
transaction not beneficially owning more than sixty percent (60%) of the Bank’s outstanding
securities after such transaction; or (vi) the occurrence of any other event or circumstance which
is not described in the foregoing provisions of this Section 9(b) but which the Bancorp Board
determines affects control of Bancorp and constitutes a Change of Control for purposes of this
Agreement. The term “Incumbent Director” shall mean any director who as of the Effective Date was
a member of the Bancorp Board, or any individual becoming a member of the Bancorp Board subsequent
to the Effective Date whose election by the shareholders of Bancorp was recommended by at least
two-thirds (2/3) of the then Incumbent Directors on the Bancorp Board. Notwithstanding the
foregoing, a Change of Control shall not include any transaction to which Executive consents in a
writing specifically noting this provision of this Agreement.
(c) Change of Control Payments and Benefits. Upon a Change Of Control Termination:
| (i) | The Employer shall pay to Executive in a lump sum in cash on the 30th day after the date of the Change In Control Termination Date the aggregate of the following amounts: |
| (A) | the sum of the Accrued Obligations; | ||
| (B) | the greater of the amount that would have been paid to Executive pursuant to Section 8(a)(i)(B) had the Termination not been a Change in Control Termination or an amount equal to 2.00 times the total of Executive’s Base Salary; | ||
| (C) | the product of (x) Executive’s aggregate cash bonus for the last completed fiscal year, whether paid under Section 6 above and/or otherwise paid to Executive, and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365. | ||
| (D) | provided, however, that if during the Restricted Period, the Executive violates Section 12, no payments shall be due under paragraphs (B) and (C) and any such payment previously made shall be repaid by Executive. |
| (ii) | For the number of days remaining in the Employment Period from and after the Change of Control Termination Date (the “Continuing Period”), or such longer period as may be provided by the terms of the applicable Welfare Benefit Plan, the Employer shall continue benefits to Executive and/or Executive’s family at least equal to those which would have been provided to them in accordance with the Welfare Benefit Plans if Executive’s employment had not been terminated; provided, however, that if Executive becomes employed with another employer and is eligible to receive substantially the same benefits under the other employer’s plans as Executive would receive under the Welfare Benefit Plans under this item (ii), the benefits provided under this item (ii) shall |
| be secondary to those provided under such other plans during such applicable period of eligibility. For purposes of determining eligibility and years-of-service credit (but not the time of commencement of benefits) of Executive for retiree benefits pursuant to such Welfare Benefit Plans, Executive shall be considered to have remained employed through the Continuing Period and to have retired on the last day of such period. |
| (iii) | All options previously granted to Executive that are unvested as of the Change of Control Termination Date shall be deemed vested, fully exercisable and non-forfeitable as of the Change of Control Termination Date (provided, however, that options granted less than six (6) months before the Change of Control Termination Date shall not be exercisable until the first day subsequent to the six (6) months following their dates of grant) and all previously granted options that are vested, but unexercised, on the Change of Control Termination Date shall remain exercisable, in each case for the period during which they would have been exercisable absent the termination of Executive’s employment except as otherwise specifically provided by the Code. | ||
| (iv) | Executive’s benefits under all Benefit Plans that are non-qualified plans shall be 100% vested, regardless of Executive’s age or years of service, as of the Change of Control Termination Date. | ||
| (v) | Notwithstanding the foregoing provisions of this Section 9, Executive may waive and release any amount, distribution, acceleration of vesting or other right described in this Section 9, in whole or part, such that the aggregate of all payments, distributions and benefits received by him shall not constitute an “excess parachute payment” within the meaning of Section 280G of the Code subject to the excise tax imposed by Section 4999 of the Code. |
10. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any plan, program, policy, or practice provided
by the Employer and for which Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any contract or agreement with the Employer.
Amounts which are vested benefits or which Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any contract or agreement with the Employer at or
subsequent to a Date of Termination or Change of Control Termination Date shall be payable in
accordance with such plan, policy, practice or program or such contract or agreement except as
explicitly modified by this Agreement.
11. Full Settlement. The Employer’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank may have
against Executive or others. In no event shall Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement; provided, however, that Executive’s right to receive any payment
under Section 8(a)(i) and to receive benefits under Welfare Benefit Plans to the extent that
Executive obtains other employment shall be limited as provided in Sections 8(a)(ii) and
12(g)(iii). The Employer agrees to recognize as an indebtedness to Executive and shall pay as
incurred all legal fees and expenses which Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Employer, Executive
or others of the validity or enforceability of, or liability under, any provision of this Agreement
or any guarantee of performance thereof (including as a result of any contest by Executive about
the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the “applicable federal rate” provided for in Section 7872(f)(2)(A) of the Code.
12. Covenants.
(a) Covenant Not to Compete. During the Restricted Period, Executive shall not,
within the geographic areas composed of the circles surrounding the Bank’s then existing banking
offices, with each circle having the applicable banking office as its center point and a radius of
twenty-five (25) miles (the “Territory”), directly or indirectly, in any capacity, render services,
or engage or have a financial interest in, any business that shall be competitive with any of those
business activities in which Bancorp or any of the Bancorp’s subsidiaries or affiliates (the “Bank
Group”) is engaged as of the date of this Agreement, which business activities include, but are not
limited to, the provision of banking services (collectively, the “Business”); provided, however,
that Executive’s ownership of less than five percent (5%) of the outstanding securities of any
entity engaged in the Business that has a class of securities listed on a securities exchange or
qualified for quotation on any over-the-counter market shall not be a violation of the foregoing.
For purposes of this Agreement, “Restricted Period” shall mean the Employment Period, the Remaining
Employment Period (as defined in Section 8(a)(i)(B) above), and, in the event of a Termination for
Cause, the remainder of the Employment Period that would have existed had the Executive not been
Terminated for Cause.
(b) Covenant Not to Solicit Customers. During the Restricted Period, within the
Territory Executive shall not, directly or indirectly, individually or on behalf of any other
person or entity (other than a member of the Bank Group), offer to provide banking services to any
person, partnership, corporation, limited liability company, or other entity who is or was (i) a
customer of any member of the Bank Group during any part of the twelve (12) month period
immediately prior to the Date of Termination, or (ii) a potential customer to whom any member of
the Bank Group offered to provide banking services during any part of the twelve (12) month period
immediately prior to the Date of Termination.
(c) Covenant Not to Solicit Employees. During the Restricted Period, within the
Territory Executive shall not, directly or indirectly, individually or on behalf of any other
person or entity, solicit, recruit or entice, directly or indirectly, any employee of any member of
the Bank Group to leave the employment of such member to work with Executive or with any person,
partnership, corporation, limited liability company or other entity with whom Executive is or
becomes affiliated or associated.
(d) Reasonableness of Scope and Duration. The parties hereto agree that the covenants
and agreements contained in this Section 12 are reasonable in their time, territory and scope, and
they intend that they be enforced, and no party shall raise any issue of the reasonableness of the
time, territory or scope of any such covenants in any proceeding to enforce any such covenants.
(e) Enforceability. Executive agrees that monetary damages would not be a sufficient
remedy for any breach or threatened breach of the provisions of this Section 12, and that in
addition to all other rights and remedies available to the Bank, they shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such breach or threatened
breach. Any determination of whether Executive has violated such covenants shall be made by
arbitration in Greensboro, North Carolina under the Rules of Commercial Arbitration (the “Rules”)
of the American Arbitration Association, which Rules are deemed to be incorporated by reference
herein.
(f) Separate Covenants and Severability. The covenants and agreements contained in
this Section 12 shall be construed as separate and independent covenants. Should any part or
provision of any such covenant or agreement be held invalid, void or unenforceable in any court of
competent jurisdiction, no other part or provision of this Agreement shall be rendered invalid,
void or unenforceable by a court of competent jurisdiction, no other part or provision of this
Agreement shall be rendered invalid, void or unenforceable as a result. If any portion of the
foregoing provisions is found to be invalid or unenforceable by a court of competent jurisdiction
unless modified, it is the intent of the parties that the otherwise invalid or unreasonable term
shall be reformed, or a new enforceable term provided, so as to most closely effectuate the
provisions as is validly possible.
| (g) | Inapplicability. The provisions of this Section 12 shall not be operative upon, or be in any way enforceable against Executive at or after: |
| (i) | a Termination by Executive for Good Reason; | ||
| (ii) | a Termination of Executive’s employment by the Employer Without Cause if the Executive waives Executive’s right to continued benefits under Section 8(a) [other than the payment under Section 8(a)(i)(A)] and, in case payments have already been made under Section 8(a)(i)(B) or (C), reimburses the Employer for a portion thereof equal to: the amount of such payments multiplied by a fraction, the numerator of which is the number of days remaining in the Remaining Employment Period and the denominator of which is the total number of days in the Remaining Employment Period as of the Date of Termination. |
13. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and without the prior written
consent of the Employer shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable by
Executive’s legal representatives.
(b) The Employer. This Agreement shall inure to the benefit of and be binding upon
the Employer and its successors and assigns. The Bancorp and the Bank will each require any
successor to it (whether direct or indirect, by stock or asset purchase, merger, consolidation or
otherwise) to all or substantially all of its business or more than fifty percent (50%) of its
assets to assume expressly and agree to perform this Agreement in the same manner and to the same
extent it would be required to perform it if no such succession had taken place.
14. Regulatory Intervention. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Employer under this Agreement are subject to the following terms
and conditions:
(a) If the Executive is suspended and/or temporarily prohibited from participating in the
conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or (1) of the Federal
Deposit Insurance Act (12 U.S.C. § 1818 (e)(3) and (g)(1)), the Bank’s obligations hereunder, as
applicable, shall be suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, all of the Employer’s obligations which were suspended
shall be reinstated.
(b) If Executive is removed and/or permanently prohibited from participating in the conduct of
the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. § 1 818 (e)(4) and (g)(1)), all obligations of the Employer under this
Agreement shall terminate as of the effective date of the order, but vested rights of the parties
shall not be affected.
(c) If the Bank is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance
Act (12 U.S. C. § 1813 (X)(1)), all obligations of the Employer under this Agreement shall
terminate as of the date of default, but any vested rights of Executive shall not be affected.
(d) All obligations of the Employer under this Agreement shall be terminated, except to the
extent determined that continuation of the contract is necessary for the continued operation of the
Bank, if so ordered by the North Carolina Commissioner of Banks (the “Commissioner”) at the time
the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance
to or on behalf of the Bank under the authority contained in Section 13 (c) of the Federal Deposit
Insurance Act (12 U.S.C.§ 1823 (c)), or if so ordered b the Commissioner at the time the FDIC
approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank
is determined by the Commissioner to be in an unsafe or unsound condition. Any rights of Executive
that shall have vested under this Agreement shall not be affected by such action. Provided that
any termination of this Agreement, in whole or in part, shall be in compliance with Section 409A to
the extent Section 409A applies to any portion of this Agreement.
(e) With regard to the provisions of this Section 14(a) through (d):
| (i) | The Bank agrees to use its best efforts to oppose any such notice of charges as to which there are reasonable defenses; | ||
| (ii) | In the event the notice of charges is dismissed or otherwise resolved in manner that will permit the Employer to resume its obligations to pay compensation hereunder, the Employer will promptly make such payment hereunder; and | ||
| (iii) | During any period of suspension under Section 14(a), the vested rights of Executive shall not be affected except to the extent precluded by such notice. |
(f) The Employer’s obligations to provide compensation or other benefits to Executive under
this Agreement shall be terminated or limited to the extent required by the provisions of any final
regulation or order of the FDIC promulgated under Section 18(k) of the Federal Deposit Insurance
Act (12 U.S.C. § 1828(k)) limiting or prohibiting any “golden parachute payment” as defined
therein, but only to the extent that the compensation or payments to be provided by the Employer
under this Agreement are so prohibited or limited.
15. 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 Termination to the
extent such payments are not exempt from Section 409A, and the six month delay in payment is
required by Section 409A.
16. Miscellaneous.
(a) No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise and, except as
provided in Sections 8(a)(ii) and 12(g)(iii), no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to Executive in any subsequent employment.
(b) Waiver. Failure of either party to insist, in one or more instances, on
performance by the other in strict accordance with the terms and conditions of this Agreement shall
not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future
performance of any such term or condition or of any other term or condition of this Agreement,
unless such waiver is contained in a writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, of any part thereof, of this
Agreement should be held by any court to be invalid, illegal or unenforceable, either in whole or
in part, such invalidity, illegality or unenforceability shall not affect the validity, legality
enforceability of the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to be interpreted as limiting the
Employer from employing other personnel on such terms and conditions as may be satisfactory to it.
(e) Entire Agreement. Except as provided herein, this Agreement contains the entire
agreement between the Employer and Executive, with respect to the subject matter hereof and
supersedes and invalidates any previous employment and severance agreements or contracts with
Executive. No representations, inducements, promises or agreements, oral or otherwise, which are
not embodied herein, shall be of any force or effect.
(f) Compliance with Section 409A. It is intended that this Agreement shall conform
with all applicable Section 409A requirements to the extent Section 409A applies to any provisions
of the Agreement. Accordingly, in interpreting, construing or applying any provisions of the
Agreement, the same shall be construed in such manner as shall meet and comply with Section 409A,
and in the event of any inconsistency with Section 409A, the same shall be reformed so as to meet
the requirements of Section 409A. Executive acknowledges that the Employer 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 but not limited to Section
409A.
(g) Governing Law. Except to the extent preempted by federal law, the laws of the
State of North Carolina shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(h) Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered or
seven (7) days after mailing if mailed, first class, certified mail, postage prepaid:
| To the Employer: | ||
| NewBridge Bancorp | ||
| 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, | ||
| Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 | ||
| Attention: President and Chief Executive Officer | ||
| To Executive: | ||
| Xxxxxxx Xxxxxxxxx | ||
| 0000 Xxxx Xxxx Xx | ||
| Xxxxxxxxx, XX 00000 |
Any party may change the address to which notices, requests, demands and other communications shall
be delivered or mailed by giving notice thereof to the other party in the same manner provided
herein.
(i) Amendments and Modifications. This Agreement may be amended or modified only by a
writing signed by all parties hereto, which makes specific reference to this Agreement. Provided,
further, that no amendment or modification to this Agreement shall be adopted unless it complies
with Section 409A to the extent Section 409A applies to this Agreement and/or to the amendment or
modification.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Employment and
Change of Control Agreement as of the date first above written.
| NEWBRIDGE BANCORP | ||||||
| By: | ||||||
| NEWBRIDGE BANK | ||||||
| By: | ||||||
| EXECUTIVE: | ||||||
