Exhibit 99.1
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
AMENDED CHANGE OF CONTROL AGREEMENT
This Amended Change of Control Agreement is entered into as of this 5th
day of December, 2007 by and between Cornerstone Bancorp (the "Company") and X.
Xxxxxx Xxxxxxx (the "Executive").
WHEREAS, on June 8, 2004, the Company and the Executive entered into a
Change of Control Agreement (the "Agreement"); and
WHEREAS, the Company and the Executive desire to amend the Agreement in
compliance with the recently enacted Internal Revenue Code Section 409A and
associated federal regulations.
NOW, THEREFORE, in consideration of the premises and of services
previously provided to the Company by the Executive, and Executive's willingness
to continue employment with the Company, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Executive, intending to be legally bound, agree as follows:
The principal purpose of this agreement is to protect Executive against
a Change of Control of the Company as defined in Item 1 below. Executive is,
however, an employee at will, and this agreement is not an employment agreement
and shall not create for Executive any right to continued employment.
1. In the event that, within five years after June 8, 2004, any Change of
Control (as defined below) of the Company is effected, then Executive shall be
entitled to the following benefits:
(a) A lump sum payment equal to three times the Executive's annual base
salary in effect at the effective date of the Change of Control. Such
payment shall be made within five business days following such Change
of Control.
(b) If, however, the amount of any lump-sum payment in (a) above, plus
any other amount treated as a parachute payment under Section 280G of
the Internal Revenue Code equals or exceeds three times the base amount
described in Section 280G of the Internal Revenue Code, then the amount
due hereunder shall be adjusted to have a value for purposes of Section
280G of three times the base amount less $100.
(c) Any amount paid pursuant to this Agreement will be deemed severance
pay. Executive shall not be under any duty to mitigate damages and no
income received by Executive thereafter shall reduce the amount due
Executive hereunder.
A "Change of Control" of the Company shall be deemed to have been
effected for purposes of this agreement (i) on the date that any one person, or
more than one person acting as a group, acquires ownership of stock of the
Company that, together with stock held by such person or group, constitutes more
than 50 percent of the total voting power of the stock of the Company; (ii) any
one person, or more than one person acting as a group, acquires ownership,
during any 12-month period ending on the date of the most recent acquisition by
such person or group, of stock of the Company that constitutes more than 50
percent of the total voting power of the stock of the Company; (iii) the Company
is merged with or into any other entity and the Company is not the surviving
entity of the merger, unless the shareholders of the Company immediately prior
to the merger own, directly or indirectly, immediately after the merger stock of
the surviving entity of the merger that constitutes more than 50 percent of the
total voting power of the stock of the surviving entity of the merger; (iv) on
the date that any one person, or more than one person acting as a group,
acquires ownership of stock of any subsidiary of the Company by which subsidiary
Executive is principally employed that, together with stock held by such person
or group, constitutes more than 50 percent of the total voting power of the
stock of the subsidiary; (v) any one person, or more than one person acting as a
group, acquires ownership, during any 12-month period ending on the date of the
most recent acquisition by such person or group, of stock of any subsidiary of
the Company by which subsidiary Executive is principally employed that
constitutes more than 50 percent of the total voting power of the stock of the
subsidiary; or (vi) any subsidiary of the Company by which Executive is
principally employed is merged with or into another entity which is not also a
subsidiary of the Company and such subsidiary is not the surviving entity of the
merger, unless immediately after the merger the Company owns stock of the
surviving entity of the merger that constitutes more than 50 percent of the
total voting power of the stock of the surviving entity of the merger.
2. Commencing on December 8, 2006, and on each annual anniversary thereafter,
the term of this agreement shall automatically be extended for an additional
year, unless 30 days prior to the anniversary the Company gives notice to the
Executive that the term will not be extended.
3. Nothing herein shall deprive Executive of any vested benefits that Executive
has in any Company retirement or other Executive benefit plan. The payment
provided for in Section 1 is in addition to any other amount due to Executive.
4. This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should die
after the occurrence of a Change of Control and while any amount would still be
payable to Executive hereunder if Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive's devisee, legatee or designee or, if there
be no such designee, to Executive's estate.
5. No provision of this Agreement may be modified, waived or discharged unless
such modification, waiver or discharge is agreed to in a writing signed by
Executive and the Chairman of the Board of the Company. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
South Carolina.
6. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
7. Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in Easley, South Carolina, by three
arbitrators in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The Company shall bear all costs and expenses, including
Executive's reasonable attorneys' fees, arising in connection with any
arbitration proceeding pursuant to this Section.
8. Should the Company merge or consolidate with another corporation and the
Company is not the surviving corporation in such a merger or consolidation, the
Company will obtain as a condition of merger or consolidation assent to and
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assumption of this Agreement by the corporation which will be the surviving
corporate entity in such merger or consolidation. Upon consummation of the
consolidation or merger, the term "Company" shall mean the corporate entity
which is the survivor of the merger or consolidation.
In witness whereof, the parties hereto have executed this Amended
Change of Control Agreement as of the date first above written.
[SIGNATURES OMITTED]
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