STATE OF NORTH CAROLINA
COUNTY OF WAKE
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (hereinafter referred to as this
"Agreement") is entered into as of April 1, 1998, by and among TRIANGLE BANCORP,
INC., a North Carolina corporation "Triangle"), TRIANGLE BANK, a banking
corporation organized under the laws of North Carolina (the "Bank"), and Xxxxxx
X. Xxxxxx (the "Officer").
WHEREAS, the Officer is employed by Triangle and the Bank as an
Executive Vice President; and
WHEREAS, the services of the Officer, the Officer's experience and
knowledge of the affairs of Triangle and the Bank and reputation and contacts in
the industry are extremely valuable to Triangle and the Bank; and
WHEREAS, Triangle and the Bank wish to attract and retain such
well-qualified executives and it is in the best interest of Triangle and the
Bank and of the Officer to secure the continued services of the Officer
notwithstanding any change of control of Triangle or the Bank; and
WHEREAS, Triangle and the Bank consider the establishment and
maintenance of a sound and vital management team to be part of their overall
corporate strategy and to be essential to protecting and enhancing the best
interest of Triangle, the Bank and Triangle's shareholders; and
WHEREAS, the parties desire to enter into this Agreement to provide the
Officer with security in the event of a change of control of Triangle or the
Bank to ensure the continued loyalty of the Officer during any change of control
in order to maximize shareholder value as well as the continued safe and sound
operation of Triangle and the Bank; and
WHEREAS, the Officer, Triangle and the Bank acknowledge and agree that
this Agreement is not an employment agreement but is limited to circumstances
giving rise to a change of control of Triangle or the Bank as set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants, and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby do agree as follows:
1. Term. The initial term of this Agreement shall be for the period
commencing upon the effective date of this Agreement and ending
two (2) calendar years from the effective date of this
Agreement. At each anniversary date of this Agreement (i.e.,
April 1, 2000), the term automatically shall be extended for an
additional two (2) years on the same terms and conditions set
forth herein, unless Triangle and the Bank shall give written
notice to the Officer of their intention not to extend this
Agreement for an additional two (2) years, which notice shall be
given at least thirteen (13) months prior to the next
anniversary date.
2. Change of Control. (a) In the event of a termination of the
Officer's employment in connection with, or within twenty-four
(24) months after, a "Change of Control" (as defined in
Subparagraph (e) below) of Triangle or the Bank, for reasons
other than for "cause" (as defined in Subparagraph (b) below),
the Officer shall be entitled to receive the sum set forth in
Subparagraph (d) below. Said sum shall be payable as provided in
Subparagraph (f) below, provided, however, that the Officer is
employed on a full-time basis by the Bank at the effective time
of the "Change of Control", except as provided in Subparagraph
(i) below.
(b) For purposes of this Agreement, termination for "cause"
shall include termination because of the Officer's personal
dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or
regulation other than traffic violations or similar offenses, or
final cease-and-desist order.
(c) The Officer shall have the right to terminate this Agreement
upon the occurrence of any of the following events (the
"Termination Events") within twenty-four (24) months following a
Change of Control of Triangle or the Bank:
(i) Officer is assigned any duties and/or responsibilities that
are inconsistent with his duties or responsibilities at the time
of the Change of Control;
(ii) Officer's annual base salary is reduced below the amount in
effect as of the effective date of a Change of Control;
(iii) Officer's life insurance, medical or hospitalization
insurance, disability insurance, stock option plans, stock
purchase plans, deferred compensation plans, management
retention plans, retirement plans, or similar plans or benefits
being provided by the Bank to the Officer as of the effective
date of the Change of Control are reduced in their level, scope,
or coverage, or any such insurance, plans, or benefits are
eliminated, unless such reduction or elimination applies
proportionately to all salaried employees of the Bank who
participated in such benefits prior to such Change of Control;
or
(iv) Officer is transferred to a location which is more than
fifty (50) miles from his current principal work location,
without the Officer's express written consent.
A Termination Event shall be deemed to have occurred on the date
such action or event is implemented or takes effect.
(d) In the event that the Officer terminates this Agreement
pursuant to this Paragraph 2, the Bank will be obligated (1) to
pay or cause to be paid to the Officer an amount equal to two
(2) times (i) the Officer's then current salary plus (ii) the
average of the cash bonus paid to the Officer by the Bank under
the Bank's Cash Bonus Plan during the immediately preceding two
(2) years, and (2) to continue for a period of two (2) years
after such termination all benefits the Officer was receiving
and entitled to at such termination date under Triangle's and
the Bank's benefit programs and plans, including, but not
limited to, medical, disability, life and accident insurance
coverage, automobile allowance, professional qualification
allowance, and club dues (or, at the Officer's election, the
Bank will pay the dollar equivalent of such benefits).
(e) For the purposes of this Agreement, the term Change of
Control shall mean any of the following events:
(i) After the effective date of this Agreement, any
"person" (as such term is defined in Section 7(j)(8)(A) of
the Change in Bank Control Act of 1978), directly or
indirectly, acquires beneficial ownership of voting stock,
or acquires irrevocable proxies or any combination of voting
stock and irrevocable proxies, representing fifty percent
(50%) or more of any class of voting securities of Triangle
or the Bank, or acquires control of in any manner the
election of a majority of the directors of Triangle or the
Bank;
(ii) Triangle or the Bank consolidates or merges with
or into another corporation, association, or entity, or is
otherwise reorganized, where Triangle or the Bank is not the
surviving corporation in such transaction and the holders of
the voting securities of Triangle or the Bank immediately
prior to such acquisition own less than a majority of the
voting securities of the surviving entity immediately after
the transaction; or
(iii) All or substantially all of the assets of
Triangle or the Bank are sold or otherwise transferred to or
are acquired by any other corporation, association, or other
person, entity, or group.
Notwithstanding the other provisions of this Paragraph 2, a
transaction or event shall not be considered a Change of Control
if, prior to the consummation or occurrence of such transaction
or event, the Officer, Triangle and the Bank agree in writing
that the same shall not be treated as a Change of Control for
purposes of this Agreement.
(f) Amounts payable pursuant to this Paragraph 2 shall be paid,
at the option of the Officer, either in one lump sum or in
twenty-four (24) equal monthly payments.
(g) Following a Termination Event which gives rise to the
Officer's rights hereunder, the Officer shall have two (2) years
from the date of occurrence of the Termination Event to
terminate this Agreement pursuant to this Paragraph 2. Any such
termination shall be deemed to have occurred only upon delivery
to the Bank or any successor thereto, of written notice of
termination which describes the Change of Control and
Termination Event. If the Officer does not so terminate this
Agreement within such two-year period, the Officer shall
thereafter have no further rights hereunder with respect to that
Termination Event, but shall retain rights, if any, hereunder
with respect to any other Termination Event as to which such
period has not expired.
(h) In the event any dispute shall arise between the Officer and
the Bank as to the terms or interpretation of this Agreement,
including this Paragraph 2, whether instituted by formal legal
proceedings or otherwise, including any action taken by the
Officer to enforce the terms of this Paragraph 2 or in defending
against any action taken by Triangle or the Bank, the Bank shall
reimburse the Officer for all costs and expenses, proceedings or
actions, in the event the Officer prevails in any such action.
(i) It is further agreed that the payment agreed in this
Paragraph 2 to be paid by the Bank to the Officer shall be due
and paid to the Officer should a Change of Control (as defined
above) be agreed to by Triangle and/or the Bank or be
consummated within six (6) months of the Officer's involuntary
termination of employment with the Bank for reasons other than
for "cause" as such term is defined in Subparagraph 2(b) hereof.
3. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon any corporate or other successor
of Triangle or the Bank which shall acquire, directly or
indirectly, by conversion, merger, consolidation, purchase, or
otherwise, all or substantially all of the assets of Triangle or
the Bank.
4. 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 Officer, Triangle and the Bank, except as herein otherwise
provided. No waiver by any party hereto, at any time, of any
breach by any party hereto, or compliance with, any condition or
provision of this Agreement to be performed by such 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 the parties, except as herein
otherwise provided.
5. 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 apply.
6. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any
provisions shall not affect the validity or enforceability of
the other provisions hereof.
IN TESTIMONY WHEREOF, Triangle and the Bank have caused this Agreement
to be executed under seal and in such form as to be binding, all by authority of
their Board of Directors first duly given, and the individual party hereto has
set said party's hand hereto and has adopted as said party's seal the
typewritten word "SEAL" appearing beside said party's name, this the day and
year first above written.
TRIANGLE BANCORP, INC.
BY: __________________________
Xxxxxxx X. Xxxxxxxxx
President
ATTEST:
----------------------------
Xxxxx X. Xxxxxxx, Secretary
(CORPORATE SEAL)
TRIANGLE BANK
BY: ___________________________
Xxxxxxx X. Xxxxxxxxx
President
ATTEST:
---------------------------
Xxxxx X. Xxxxxxx, Secretary
(CORPORATE SEAL)
______________________(SEAL)
Xxxxxx X. Xxxxxx
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