EXHIBIT (99)
------------
STATE OF NORTH CAROLINA
CHANGE OF CONTROL
COUNTY OF MECKLENBURG SEVERANCE AGREEMENT
THIS CHANGE OF CONTROL SEVERANCE AGREEMENT (the "Agreement") is made and
entered into as of the 8th day of July, 2002, by and among FIRST COMMERCE
CORPORATION ("Corporation"), FIRST COMMERCE BANK ("Bank") and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H:
WHEREAS, the Employee is a valued employee of the Bank and provides
services to the Corporation;
WHEREAS, the Corporation and the Bank desire to encourage the Employee to
continue in the employ of the Bank and to continue to provide services to the
Corporation; and
WHEREAS, the Corporation and the Bank desire to provide the Employee with
potential financial benefits that would lessen the impact of personal
considerations upon the Employee resulting from, and encourage the Employee to
objectively assist and advise management and the Boards of Directors of the
Corporation and the Bank in analyzing and evaluating, possible extraordinary
corporation transactions that could result in changes in the Employee's duties
and responsibilities or in a termination of the Employee's employment.
NOW, THEREFORE, the Corporation, the Bank and the Employee agree as
follows:
Section 1. Change In Control Severance Payment.
------------- ----------------------------------------------
(a) In the event of a termination of the Employee's employment by the Bank
(or any successor to the Bank) "in connection with", or within twenty-four (24)
months after, a Qualifying Change in Control (as defined below), in each case
other than for Cause (as defined below), the Employee shall be entitled to
receive the sum and the benefits set forth in Section 1(c) below, when and as
provided in Section 1(c). The phrase "in connection with" as used in the
preceding sentence means that within one hundred twenty (120) days after such
termination of employment, the Corporation and/or the Bank becomes a party to a
letter of intent, agreement in principle or other similar document with a
Person, or a party to a definitive acquisition, merger or sale agreement with a
Person, in connection with a Qualifying Change in Control.
1
(b) The Employee shall have the right to terminate his employment by the
Bank (or any successor to the Bank) upon the occurrence of any of the following
events (the "Termination Events") within twenty-four (24) months following a
Qualifying Change in Control:
(i) His duties, responsibilities and/or authority shall be
diminished from the levels existing immediately prior to the
Qualifying Change in Control or from those he shall agree to
in writing in connection with the Qualifying Change in
Control;
(ii) His rights to participate in, or his benefits receivable
under, life insurance, medical or hospitalization insurance,
disability insurance, stock option, stock purchase, deferred
compensation, management retention, profit sharing,
retirement, or similar plans or programs in which he
participated or under which he received benefits as of the
day prior to the date of the Qualifying Change in Control
("Plans") are eliminated or reduced in their level, scope,
or coverage;
(iii)His base annual salary as of the date of the Qualifying
Change of Control ("Base Salary") shall be reduced; or
(iv) He is required to perform his principal employment functions
at a location outside of Mecklenburg County, North Carolina
without his express prior written consent.
A Termination Event shall be deemed to have occurred on the date such action or
event is implemented or takes effect.
(c) In the event that the Employee's employment is terminated under Section
1(a) or Sections 1(b) and 1(d), (I) the Bank shall promptly pay to the Employee
a cash amount equal to one hundred percent (100%) of the Employee's Base Salary,
and (ii) for a period of one (1) year following the date of termination of
employment, the Employee shall be entitled to continue to participate at his
then current levels of benefits in all Plans not requiring for participation
therein for qualification under federal law one thousand (1,000) hours of
service per employment year.
(d) The Employee shall have twelve (12) months from the date of occurrence
of a Termination Event to terminate this Agreement pursuant to Section 1(b). Any
such termination shall be deemed to have occurred only upon delivery to the
Corporation and the Bank, or any successor to either, as applicable, of written
notice of termination which describes the Qualifying Change in Control and the
Termination Event. If the Employee does not so terminate this Agreement within
such twelve-month period, he shall thereafter have no further rights hereunder
with respect to that
2
Termination Event, but shall retain his rights hereunder with respect to any
other Termination Event as to which such period has not expired. In the event
that the employment of the Employee is terminated under Section 1(a) or Sections
1(b) and 1(d), without prejudice to his rights under Section 1(c), if the
Employee is requested by the Person effecting the Qualifying Change in Control
to do so, the Employee shall serve as an independent contractor consultant to
the Bank or its successor for up to forty (40) hours per week for up to six (6)
months following such employment termination at an hourly fee equal to his Base
Salary at the time of termination divided by three hundred sixty (360) days
divided by eight (8). The Employee shall provide such consulting services in
Mecklenburg County, North Carolina and shall be reimbursed for all reasonable
and duly documented expenses incurred by him in providing such services.
(e) For the purposes of this Agreement, "Qualifying Change in Control"
means:
(i) Any Person (other than the Corporation itself), directly or
indirectly, acquires beneficial ownership of voting stock,
or acquires irrevocable proxies or any combination of
beneficial ownership of voting stock and irrevocable
proxies, representing twenty-five percent (25%) or more of
the voting securities of the Corporation or the Bank, or
acquires the ability in any manner to elect, or to influence
or cause the election, of a majority of the Corporation's
Board of Directors or the Bank's Board of Directors (the
"Bank Board");
(ii) The Corporation or the Bank merges with another Person with
the result that the shareholders of the Corporation
immediately prior to the public announcement of the
Corporation's and/or the Bank's agreement to effect such
transaction do not beneficially own at least sixty-six and
two-thirds percent (66.667%) of the voting equity interests
of the surviving Person of such transaction; or
(iii)All or substantially all of the assets of the Corporation
or the Bank are sold or otherwise transferred to or are
acquired by any Person.
Notwithstanding the other provisions of this Section 1(e), a transaction or
event shall not be considered a Qualifying Change in Control if, prior to the
consummation or occurrence of such transaction or event, the Employee, the
Corporation and the Bank agree in writing that the same shall not be treated as
a Qualifying Change in Control for purposes of this Agreement.
3
(f) For purposes of this Agreement, "Cause" means:
(i) A determination made in good faith by the Bank Board that
the Employee has (A) breached in any material respect any
material term or condition of his employment or (B) is or
has engaged in willful misconduct which is having or is
reasonably likely to have a material adverse effect on the
Corporation's and the Bank's business, reputation or
business prospects.
(ii) The violation by the Employee of any applicable federal or
state law, or any applicable rule, regulation, order or
statement of policy promulgated thereunder by any
governmental agency or authority having jurisdiction over
the Corporation or the Bank, including without limitation
the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, the North Carolina
Commissioner of Banks or any other such banking regulator (a
"Regulatory Authority"), which results from the Employee's
gross negligence, willful misconduct or intentional
disregard of such law, rule, regulation, order or policy
statement and which has or is reasonably likely to have a
material adverse effect on the Corporation's and the Bank's
business, reputation or business prospects.
(iii)The Employee's commission in the course of his employment
with the Bank of an act of fraud, embezzlement or theft
(whether or not resulting in criminal prosecution or
conviction);
(iv) The Employee's conviction of any felony or any criminal
offense involving dishonesty or breach of trust, or the
occurrence of any event described in Section 19 of the
Federal Deposit Insurance Act or any other event or
circumstance which disqualifies the Employee from serving as
an employee or executive officer of, or a party affiliated
with, the Bank;
(v) The issuance by a Regulatory Authority of a finding or order
removing, suspending, or prohibiting the Employee from
participating in the conduct of the Corporation's or the
Bank's affairs; or
4
(vi) The occurrence of any event resulting in the Employee being
excluded from coverage, or having coverage limited as to the
Employee as compared to other covered officers or employees,
under the Corporation's or the Bank's then current "blanket
bond" or other fidelity bond or insurance policy covering
its or their directors, officers or employees.
5
Section 2. Successors and Assigns. This Agreement shall inure to the
---------- -------------------------
benefit of and be binding upon any corporate or other successor of the
Corporation or the Bank, including any Person who shall acquire, directly or
indirectly by merger, share exchange, purchase or otherwise, all or
substantially all of the capital stock or assets of the Corporation or the Bank.
Section 3. Modification; Waiver; Amendments. No provision of this Agreement
--------- --------------------------------
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the parties hereto. No waiver by
a party hereto, at any time, of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
another party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No amendments or
additions to this Agreement shall be binding unless in writing and signed by all
parties hereto, except as herein otherwise provided.
Section 4. Applicable Law. This Agreement shall be governed in all
---------- ----------------
respects, whether as to validity, construction, capacity, performance or
otherwise, by the laws of North Carolina, except to the extent that federal law
shall be deemed to govern.
Section 5. Severability. 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.
Section 6. Entire Agreement. This Agreement contains the entire agreement
---------- ----------------
of the parties with respect to the transactions described herein and supersedes
any and all other oral or written agreement(s) heretofore made, and there are no
representations or inducements by or to, or any agreements between, any of the
parties hereto other than those contained herein in writing.
Section 7. Disputes. In the event any dispute shall arise between the
---------- --------
Employee and the Corporation, the Bank and/or the Bank Board as to the terms or
interpretation of this Agreement, whether instituted by formal legal proceedings
or otherwise, including any action taken by the Employee to enforce the terms of
this Agreement or in defending against any action taken by the Corporation
and/or the Bank, unless the Employee shall have received no recovery or other
relief on his claims or shall have not prevailed on his defenses, the Bank shall
reimburse the Employee for all costs and expenses, including reasonable
attorneys' fees, incurred by him in such disputes or proceedings.
6
IN WITNESS WHEREOF, the parties have executed this Agreement under seal to
be effective as of the day and year first hereinabove written. FIRST COMMERCE
CORPORATION:
By: /s/ Xxxxx X. Xxxxxxx
---------------------
[CORPORATE SEAL] Xxxxx X. Xxxxxxx
Chairman
FIRST COMMERCE BANK:
By: /s/ Xxxxx X. Xxxxxxx
---------------------
[CORPORATE SEAL] Xxxxx X. Xxxxxxx
Chairman
ATTEST:
/s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
Assistant Secretary
EMPLOYEE:
/s/ Xxxxx X. Xxxx (SEAL)
-------------------------
Xxxxx X. Xxxx
7
