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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 29,
1999, is made by and between New Commerce BanCorp, a South Carolina corporation
(the "Employer" or the "Company") which is the proposed bank holding company for
a proposed national bank (the "Bank"), and Xxxxx X. Xxxx, an individual resident
of South Carolina (the "Executive").
The Employer is in the process of organizing the Bank, and the
Executive has agreed to serve as Senior Vice President and Chief Financial
Officer of the Bank and the Company. Upon organization of the Bank, the Employer
and the Executive contemplate that this Agreement will be assigned by the
Employer to the Bank and that the Bank will assume the duties of the Company
hereunder (except pursuant to Section 3). In addition, if the organizers of the
Company elect to form a separate corporation to serve as the holding company of
the Bank, the Agreement will be assigned to that corporation and the Executive
will serve as Senior Vice President and Chief Financial Officer of that
corporation. Following any such assignment, the term "Employer" as used herein
from time to time shall refer to the Bank.
The Employer recognizes that the Executive's contribution to the growth
and success of the Bank during its organization and initial years of operations
will be a significant factor in the success of the Bank. The Employer desires to
provide for the employment of the Executive in a manner which will reinforce and
encourage the dedication of the Executive to the Bank and promote the best
interests of the Bank and its shareholders. The Executive is willing to serve
the Employer on the terms and conditions herein provided. Certain terms used in
this Agreement are defined in Section 17 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the
Executive shall serve the Employer, as Senior Vice President and Chief Financial
Officer of the Bank and the Company upon the terms and conditions set forth
herein. The Executive shall have such authority and responsibilities consistent
with her position as are set forth in the Company's or the Bank's Bylaws or
assigned by the Company's or the Bank's Board of Directors (the "Board") from
time to time. The Executive shall devote her full business time, attention,
skill and efforts to the performance of her duties hereunder, except during
periods of illness or periods of vacation and leaves of absence consistent with
Bank policy. The Executive may devote reasonable periods to service as a
director or advisor to other organizations and to charitable and community
activities provided that such activities do not materially interfere with the
performance of her duties hereunder and are not in conflict or competitive with,
or adverse to, the interests of the Company or the Bank.
2. Term. Unless earlier terminated as provided herein, the
Executive's employment under this Agreement shall commence on February 22, 1999,
and be for a term (the "Term") of three years; provided that the Executive or
the Bank may at any time, by written notice, fix the Term
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to a finite term of two years commencing with the date of the notice.
Notwithstanding the foregoing, the Term of employment hereunder will end on the
date that the Executive attains the retirement age, if any, specified in the
Bylaws of the Bank.
3. Compensation and Benefits.
(a) Starting February 22, 1999, the Employer shall pay the
Executive an annual salary of $85,000. The President and Chief Executive Officer
and the Board shall review the Executive's salary at least annually and may
increase (but not decrease) the Executive's base salary if it determines in its
sole discretion that an increase is appropriate.
(b) For each calendar year beginning the year that the Bank opens,
the Executive shall be eligible to receive a cash bonus equaling up to
Twenty-Five Percent (25%) of her salary if the Bank achieves certain performance
levels or other specified goals and criteria agreed to by the Employer and the
Executive (the "Bonus Plan"), with such bonus to be paid no later than March
31st of the following calendar year.
(c) The Executive shall participate in the Bank's long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock, and other awards thereunder or under any similar plan adopted by the
Company. On the date of the closing of the stock offering for the initial
capitalization of the Bank, or as soon thereafter as an appropriate stock option
plan is adopted by the Board, the Company shall grant to the Executive an option
to purchase Ten Thousand (10,000) shares of Common Stock. The award agreement
for the stock option shall provide that one-fifth (1/5) of the shares subject to
the option will vest on each of the first five (5) anniversaries of the Opening
Date, but only if the Executive remains employed by the Company on such date. In
addition, the award agreement will provide that the Executive's option shall be
qualified as an incentive stock option under the Internal Revenue Code of 1986,
as amended (the "Code"); all options shall be exercisable at any time during the
ten (10) years following the date of grant at a price per share equal to the
public offering price in the offering (subject to standard antidilution
adjustments in the event of stock splits, dividends or combinations), which the
parties agree is the fair market value of the Common Stock as of the date of
grant; and all options shall be nontransferable and nonassignable by the
Executive or by any other person entitled hereunder to exercise any such rights;
provided, however, that upon the death of the Executive any rights granted
hereunder shall be transferable by the Executive's will or by the applicable
laws of descent and distribution. In the event of a Change in Control, the
restrictions on any outstanding incentive awards (including restricted stock)
granted to the Executive under any incentive plan or arrangement shall lapse and
such incentive award shall become fully (100%) vested and all stock options,
performance units, and stock appreciation rights granted to the Executive shall
become immediately exercisable and shall become fully (100%) vested.
(d) The Executive shall participate in all retirement, welfare and
other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer. The Employer shall pay 100% of the
Executive's portion of any premium for such plans or programs.
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(e) The Employer shall pay the annual dues of the Executive's
membership in the American Institute of Certified Public Accountants and the
South Carolina Association of Certified Public Accountants. The Employer shall
reimburse the Executive for reasonable costs incurred to attend Forty (40) hours
of continuing professional education annually or as otherwise needed in order to
maintain her CPA designation. Costs to be reimbursed shall include seminar fees,
travel, and accommodations, provided the Executive obtains prior approval from
the President and Chief Executive Officer for out of town seminars.
(6) The Employer shall reimburse the Executive for
reasonable travel and other expenses related to the Executive's duties which are
incurred and accounted for in accordance with the normal practices of the
Employer.
4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as follows:
(i) upon the death of the Executive;
(ii) upon the disability of the Executive for a period of
One Hundred Eighty (180) days which, in the opinion
of the Board of Directors, renders her unable to
perform the essential functions of her job and for
which reasonable accommodation is unavailable. For
purposes of this Agreement, a "disability" is defined
as a physical or mental impairment that substantially
limits one or more major life activities, and a
"reasonable accommodation" is one that does not
impose an undue hardship on the Employer;
(iii) by the Employer for Cause upon delivery of a Notice
of Termination to the Executive;
(iv) by the Executive for Good Reason upon delivery of a
Notice of Termination to the Employer within a Ninety
(90) day period beginning on the Thirtieth (30th) day
after the occurrence of a Change in Control or within
a Ninety (90) day period beginning on the one year
anniversary of the occurrence of a Change in Control;
(v) by the Employer if its effort to organize the Bank is
abandoned; or
(vi) by the Executive effective upon the Fifteenth (15th)
day after delivery of a Notice of Termination.
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(b) If the Executive's employment is terminated because
of the Executive's death, the Executive's estate shall receive any sums due her
as base salary and/or reimbursement of expenses through the end of the month
during which death occurred, plus any bonus earned or accrued under the Bonus
Plan through the date of death (including any amounts awarded for previous years
but which were not yet vested) and a pro rata share of any bonus with respect to
the current fiscal year which had been earned as of the date of the Executive's
death.
(c) During the period of any incapacity leading up to the
termination of the Executive's employment as a result of disability, the
Employer shall continue to pay the Executive her full base salary at the rate
then in effect and all perquisites and other benefits (other than any bonus)
until the Executive becomes eligible for benefits under any long-term disability
plan or insurance program maintained by the Employer, provided that the amount
of any such payments to the Executive shall be reduced by the sum of the
amounts, if any, paid to the Executive for the same period under any disability
benefit or pension plan of the Employer or any of its subsidiaries. Furthermore,
the Executive shall receive any bonus earned or accrued under the Bonus Plan
through the date of incapacity (including any amounts awarded for previous years
but which were not yet vested) and a pro rata share of any bonus with respect to
the current fiscal year which had been earned as of the date of the Executive's
incapacity.
(d) If the Executive's employment is terminated for Cause
as provided above, or if the Executive resigns (except for a termination of
employment pursuant to Section 4(e), the Executive shall receive any sums due
her as base salary and/or reimbursement of expenses through the date of such
termination.
(e) If the Executive's employment is terminated by the
Executive pursuant to clause (iv) of Section 4(a) or by the Employer for any
reason within a one-year period after a Change in Control, in addition to other
rights and remedies available in law or equity, the Executive shall be entitled
to the following:
(i) the Employer shall pay the Executive in cash
within Fifteen (15) days of the date of
termination severance compensation in an
amount equal to her current monthly base
salary annualized, plus an amount equal to
her prior year's bonus paid, plus any unpaid
bonus earned or accrued under the Bonus Plan
through the date of termination (including
any amounts awarded for previous years but
which were not yet vested) and a pro rata
share of any bonus with respect to the
current fiscal year which had been earned as
of the date of termination.
(ii) the restrictions on any outstanding
incentive awards (including restricted
stock) granted to the Executive under the
Company's or the Bank's long-term equity
incentive program or any other incentive
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plan or arrangement shall lapse and become
fully (100%) vested, all stock options and
stock appreciation rights granted to the
Executive shall become immediately
exercisable and shall become fully (100%)
vested, and all performance units granted to
the Executive shall become fully (100%)
vested.
(f) If the Executive's employment is terminated
pursuant to clause (v) of Section 4(a), the Executive shall receive any sums due
her as base salary and/or reimbursement of expenses through the date of such
termination.
(g) If the Employer terminated the Executive's
employment other than pursuant to clauses (i), (ii), (iii), or (v) of Section
4(a), the Employer shall pay to the Executive severance compensation in an
amount equal to her current monthly base salary each month for Twelve (12)
months from the date of termination, plus any bonus earned or accrued under the
Bonus Plan through the date of termination (including any amounts awarded for
previous years but which were not yet vested) and a pro rata share of any bonus
with respect to the current fiscal year which had been earned as of the date of
the Executive's termination.
(h) With the exceptions of the provisions of
this Section 4, and the express terms of any benefit plan under which the
Executive is a participant, it is agreed that, upon termination of the
Executive's employment the Employer shall have no obligation to the Executive
for, and the Executive waives and relinquishes, any further compensation or
benefits (exclusive of COBRA benefits). At the time of termination of
employment, the Employer and the Executive shall enter into a mutually
satisfactory form of release acknowledging such remaining obligations and
discharging both parties, as well as the Employer's officers, directors and
employees with respect to their actions for or on behalf of the Employer, from
any other claims or obligations arising out of or in connection with the
Executive's employment by the Employer, including the circumstances of such
termination.
(i) The parties intend that the severance
payments and other compensation provided for herein are reasonable compensation
for the Executive's services to the Employer and shall not constitute "excess
parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986 and any regulations thereunder. In the event that the Employer's
independent accountants acting as auditors for the Employer on the date of a
Change in Control determine that the payments provided for herein constitute
"excess parachute payments," then the compensation payable hereunder shall be
increased, on a tax gross-up basis, so as to reimburse the Executive for the tax
payable by the Executive, pursuant to Section 4999 of the Internal Revenue Code,
on such "excess parachute payments," taking into account all taxes payable by
the Executive with respect to such tax gross-up payments hereunder, so that the
Executive shall be, after payment of all taxes, in the same financial position
as if no taxes under Section 4999 had been imposed upon her.
5. Ownership of Work Product. The Employer shall own all Work
Product arising during the course of the Executive's employment (prior, present
or future). For purposes hereof,
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"Work Product" shall mean all intellectual property rights, including all Trade
Secrets, in any programming, documentation, technology or other work product
that relates to the Employer, its business or its customers and that employee
conceives, develops, or delivers to the Employer at any time during her
employment, during or outside normal working hours, in or away from the
facilities of the Employer, and whether or not requested by the Employer. If the
Work Product contains any materials, programming or intellectual property rights
that the Executive conceived or developed prior to, and independent of, the
Executive's work for the Employer, the Executive agrees to point out the
pre-existing items to the Employer and the Executive grants the Employer a
worldwide, unrestricted, royalty-free right, including the right to sublicense
such items. The Executive agrees to take such actions and execute such further
acknowledgments and assignments as the Employer may reasonably request to give
effect to this provision.
6. Protection of Trade Secrets. The Executive agrees to maintain
in strict confidence and, except as necessary to perform her duties for the
Employer, the Executive agrees not to use or disclose any Trade Secrets of the
Employer during or after her employment. "Trade Secret" means information,
including a formula, pattern, compilation, program, device, method, technique,
process, drawing, cost data or customer list, that: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
7. Protection of Other Confidential Information. In addition, the
Executive agrees to maintain in strict confidence and, except as necessary to
perform her duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during her employment and for a period of
Twelve (12) months following termination of the Executive's employment.
"Confidential Business Information" shall mean any internal, non-public
information (other than Trade Secrets already addressed above) concerning the
Employer's financial position and results of operations (including revenues,
assets, net income, etc.); annual and long-range business plans; product or
service plans; marketing plans and methods; training, educational and
administrative manuals; customer and supplier information and purchase
histories; and employee lists. The provisions of Sections 6 and 7 above shall
also apply to protect Trade Secrets and Confidential Business Information of
third parties provided to the Employer under an obligation of secrecy.
8. Return of Materials. The Executive shall surrender to the
Employer, promptly upon its request and in any event upon termination of the
Executive's employment, all media, documents, notebooks, computer programs,
handbooks, data files, models, samples, price lists, drawings, customer lists,
prospect data, or other material of any nature whatsoever (in tangible or
electronic from) in the Executive's possession or control, including all copies
thereof, relating to the Employer, its business, or its customers. Upon the
request of the Employer, Executive shall certify in writing compliance with the
foregoing requirement.
9. Restrictive Covenants.
(a). No Solicitation of Customers. During the Executive's
employment with the Employer and for a period of six (6) months thereafter, the
Executive shall not (except on behalf of
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or with the prior written consent of the Employer), either directly or
indirectly, on the Executive's own behalf or in the service or on behalf of
others, (A) solicit, divert, or appropriate to or for a Competing Business, or
(B) attempt to solicit, divert, or appropriate to or for a Competing Business,
any person or entity that was a customer of the Employer or any of its
Affiliates on the date of termination and is located in the Territory.
This restriction does not apply after a Change in Control.
(b). No Recruitment of Personnel. During the Executive's
employment with the Employer and for a period of six (6) months thereafter, the
Executive shall not, either directly or indirectly, on the Executive's own
behalf or in the service or on behalf of others, (A) solicit, divert, or hire
away, or (B) attempt to solicit, divert, or hire away, to any Competing Business
located in the Territory, any employee of or consultant to the Employer or any
of its Affiliates engaged or experienced in the Business, regardless of whether
the employee or consultant is full-time or temporary, the employment or
engagement is pursuant to a written agreement, or the employment is for a
determined period or is at will. The restriction does not apply after a Change
in Control.
(c). Non-Competition Agreement. During the Executive's
employment with the Employer and for a period of six (6) months thereafter, the
Executive shall not (without the prior written consent of the Employer) compete
with the Employer or any of its affiliates by, directly or indirectly, forming,
serving as an organizer or director of or acquiring or maintaining more than a
1% passive investment in, a depository financial institution or holding company
therefor if such depository institution or holding company has one or more
offices or branches located in the Territory. This restriction does not apply
after a Change in Control.
10. Independent Provisions. The provisions in each of the above
sections 9(a), 9(b), and 9(c) are independent, and the unenforceability of any
one provision shall not affect the enforceability of any other provision.
11. Successors; Binding Agreement. The rights and obligations of
this Agreement shall bind and inure to the benefit of the surviving corporation
in any merger or consolidation in which the Employer is a party, or any assignee
of all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
her, except that her right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of her estate.
12. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
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13. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the conflict of laws principles thereof. Any
action brought by any party to this Agreement shall be brought and maintained in
a court of competent jurisdiction in the State of South Carolina.
14. Non-Waiver. Failure of either party to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.
15. Enforcement. The Executive agrees that in the event of any
breach or threatened breach by the Executive of any covenant contained in
Section 9(a), 9(b), or 9(c) hereof, the resulting injuries to the Employer would
be difficult or impossible to estimate accurately, even though irreparable
injury or damages would certainly result. Accordingly, an award of legal
damages, if without other relief, would be inadequate to protect the Employer.
The Executive, therefore, agrees that in the event of any such breach, the
Employer shall be entitled to obtain from a court of competent jurisdiction an
injunction to restrain the breach or anticipated breach of any such covenant,
and to obtain any other available legal, equitable, statutory, or contractual
relief. Should the Employer have cause to seek such relief, no bond shall be
required from the Employer, and the Executive shall pay all attorney's fees and
court costs which the Employer may incur to the extent the Employer prevails in
its enforcement action.
16. Saving Clause. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or
unenforceable in such jurisdiction, the remainder of such provision shall not be
thereby affected and shall be given full effect, without regard to the invalid
portion. It is the intention of the parties that, if any court construes any
provision or clause of this Agreement, or any portion thereof, to be illegal,
void, or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area, or matter of
such provision, and, in its reduced form, such provision shall then be
enforceable and shall be enforced. The Executive and the Employer hereby agree
that they will negotiate in good faith to amend this Agreement from time to time
to modify the terms of Sections 9(a), 9(b), and 9(c), the definition of the term
"Territory," and the definition of the term "Business," to reflect changes in
the Employer's business and affairs so that the scope of the limitations placed
on the Executive's activities by Section 9 accomplishes the parties' intent in
relation to the then current facts and circumstances. Any amendments to this
Agreement shall be effective only when completed in writing and signed by the
Executive and the Employer.
17. Certain Definitions.
(a) "Affiliate" shall mean any business entity controlled
by, controlling or under common control with the Employer.
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(b) "Business" shall mean the operation of a depository
financial institution, including, without limitation, the solicitation and
acceptance of deposits of money and commercial paper, the solicitation and
funding of loans and the provision of other banking services, and any other
related business engaged in by the Employer or any of its Affiliates as of the
date of termination.
(c) "Cause" shall consist of any of (A) the commission by
the Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the material breach by the Executive of this
Agreement that, if susceptible of cure, remains uncured Ten (10) days following
written notice to the Executive of such breach, (D) the receipt of any form of
notice, written or otherwise, that any regulatory agency having jurisdiction
over the Employer intends to institute any form of formal or informal (e.g., a
memorandum of understanding which related to the Executive's performance)
regulatory action against the Executive or the Employer (provided that the Board
of Directors determines in good faith, with the Executive abstaining from
participating in the consideration of and vote on the matter, that the subject
matter of such action involves acts or omissions by or under the supervision of
the Executive or that termination of the Executive would materially advance the
Employer's compliance with the purpose of the action or would materially assist
the Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action); (E) the exhibition by the Executive
of a standard of behavior within the scope of her employment that is materially
disruptive to the orderly conduct of the Employer's business operations
(including, without limitation, substance abuse or sexual misconduct ) to a
level which, in the Board of Directors' good faith and reasonable judgment, with
the Executive abstaining from participating in the consideration of and vote on
the matter, is materially detrimental to the Employer's best interest, that, if
susceptible of cure remains uncured Ten (10) days following written notice to
the Executive of such specific inappropriate behavior; (F) the failure of the
Executive to devote her full business time and attention to her employment as
provided under this Agreement that, if susceptible of cure, remains uncured
Thirty (30) days following written notice to the Executive of such failure; or
(G) the consistent failure by the Executive to achieve or maintain the
performance goals established by Bank management and approved by the Board of
Directors from time to time for the Executive and the Company.
(d) "Change in Control" shall mean the occurrence during
the Term of any of the following events, unless such event is a result of a
Non-Control Transaction:
(i) The individuals who, as of the date of this
Agreement, are members of the Board of
Directors of the Employer (the "Incumbent
Board") cease for any reason to constitute
at least a majority of the Board of
Directors of the Employer; provided,
however, that if the election, or nomination
for election by the Employer's shareholders,
of any new
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director was approved in advance by a vote
of at least a majority of the Incumbent
Board, such new director shall, for purposes
of this Agreement, be considered as a member
of the Incumbent Board; provided, further,
that no individual shall be considered a
member of the Incumbent Board if such
individual initially assumed office as a
result of either an actual or threatened
"Election Contest" (as described in Rule
14a-11 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"),
or other actual or threatened solicitation
of proxies or consents by or on behalf of
any person other than the Board of Directors
of the Employer (a "Proxy Contest"),
including by reason of any agreement
intended to avoid or settle any Election
Contest or Proxy Contest.
(ii) An acquisition (other than directly from the
Employer) of any voting securities of the
Employer (the "Voting Securities") by any
"Person" (as the term "person" is used for
purposes of Section 13(d) or 14(d) of the
Exchange Act) immediately after which such
Person has "Beneficial ownership" (within
the meaning of Rule 13d-3 promulgated under
the Exchange Act) of Twenty Percent (20%) or
more of the combined voting power of the
Employer's then outstanding Voting
Securities; provided, however, that in
determining whether a Change in Control has
occurred, Voting Securities which are
acquired in a Non-Control Acquisition shall
not constitute an acquisition which would
cause a Change in Control.
(iii) Approval by the shareholders of the Employer
of: (i) a merger, consolidation, or
reorganization involving the Employer; (ii)
a complete liquidation or dissolution of the
Employer; or (iii) an agreement for the sale
or other disposition of all or substantially
all of the assets of the Employer to any
Person (other than a transfer to a
Subsidiary).
(iv) A notice of an application is filed with the
Office of Comptroller of the Currency (the
"OCC") or the Federal Reserve Board or any
other bank or thrift regulatory approval (or
notice of no disapproval) is granted by the
Federal Reserve, the OCC, the Federal
Deposit Insurance Corporation, or any other
regulatory authority for permission to
acquire control of the Employer or any of
its banking subsidiaries.
(e) "Competing Business" shall mean any business that, in
whole or in part, is the same or substantially the same as the Business.
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(f) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof:
(i) a change in the Executive's status, title, position
or responsibilities (including reporting
responsibilities) which, in the Executive's
reasonable judgment, represents a material adverse
change from her status, title, position or
responsibilities as in effect at any time within
Ninety (90) days preceding the date of the Change in
Control or at any time thereafter; the assignment to
the Executive of any duties or responsibilities
which, in the Executive's reasonable judgment, are
inconsistent with her status, title, position or
responsibilities as in effect at any time within
Ninety (90) days preceding the date of the Change in
Control or any time thereafter; any removal of the
Executive from or failure to reappoint to reelect her
to any of such offices or positions, except in
connection with the termination of her employment for
Disability or Cause, as a result of her death, or by
the Executive other than for Good Reason, or any
other change in condition or circumstances that in
the Executive's reasonable judgment makes it
materially more difficult for the Executive to carry
out the duties and responsibilities of her office
than existed at any time within Ninety (90) days
preceding the date of Change in Control or at any
time thereafter;
(ii) a material reduction in the Executive's base salary
or any failure to pay the Executive any compensation
or benefits to which she is entitled within Five (5)
days of the date due;
(iii) the Employer's requiring the Executive to be based at
any place outside a Thirty (30) mile radius from the
executive offices occupied by the Executive
immediately prior to the Change in Control, except
for reasonably required travel on the Employer's
business which is not materially greater than such
travel requirements prior to the Change in Control;
(iv) the failure by the Employer to (A) continue in effect
(without material reduction in benefit level and/or
reward opportunities) any material compensation or
employee benefit plan in which the Executive was
participating at any time within Ninety (90) days
preceding the date of a Change in Control or at any
time thereafter, unless such plan is replaced with a
plan that provides substantially equivalent
compensation or benefits to the Executive, or (B)
provide the Executive with compensation and benefits,
in the aggregate, substantially equivalent (in terms
of benefit levels and/or reward
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opportunities) to those provided for under each other
employee benefit plan, program and practice in which
the Executive was participating at any time within
Ninety (90) days preceding the date of a Change in
Control or at any time thereafter;
(v) the insolvency or the filing (by any party, including
the Employer) of a petition for bankruptcy of the
Employer, which petition is not dismissed within
Sixty (60) days;
(vi) any material breach by the Employer of any material
provision of this Agreement;
(vii) any purported termination of the Executive's
employment for Cause by the Employer which does not
comply with the terms of this Agreement; or
(viii) the failure of the Employer to obtain an agreement,
satisfactory to the Executive, from any successor or
assign to assume and agree to perform this Agreement,
as contemplated in Section 11 hereof.
Any event or condition described in clause (i) through (viii) above
which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The Executive's
right to terminate her employment for Good Reason shall not be affected by her
incapacity due to physical or mental illness.
(g) "Non-Control Transaction" shall mean a transaction
described below:
(i) the shareholders of the Employer,
immediately before such merger,
consolidation or reorganization, own,
directly or indirectly, immediately
following such merger, consolidation or
reorganization, at least Fifty Percent (50%)
of the combined voting power of the
outstanding voting securities of the
corporation resulting from such merger,
consolidation or reorganization (the
"Surviving Corporation") in substantially
the same proportion as their ownership of
the Voting Securities immediately before
such merger, consolidation or
reorganization; and
(ii) immediately following such merger,
consolidation or reorganization, the number
of directors on the board of directors of
the Surviving Corporation who were members
of the Incumbent Board shall at least
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equal the number of directors who were
affiliated with or appointed by the other
party to the merger, consolidation or
reorganization.
(h). "Territory" shall mean a radius of ten miles from (i)
the main office of the Employer or (ii) any branch office of the Employer.
(i). "Notice of Termination" shall mean a written notice
of termination from the Employer or the Executive which specifies an effective
date of termination, indicates the specific termination provision in this
Agreement relied upon, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
18. Expenses. The Employer shall pay all legal fees and related
expenses (including the costs of experts, evidence, and counsel) incurred by the
Executive as they become due as a result of (a) the preparation of this
Agreement, (b) the Executive's termination of employment (including all such
fees and expenses, if any, incurred in contesting or disputing any such
termination of employment), and (c) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement. However, the party against
which any final judgement is obtained in any litigation resulting from the
circumstances described in clauses (b) or (c) shall pay or reimburse the
successful party for all legal fees and related expenses incurred by such
successful party in such litigation.
19. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
NEW COMMERCE BANCORP:
By: /s/ Xxxxx X. Xxxxxxx
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Its: President & CEO
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EXECUTIVE:
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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