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 June 18, 1996, 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 has heretofore been employed by Triangle and the Bank
as 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.
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., June 18, 1998), 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
- 2 -
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
- 3 -
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 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.
- 4 -
(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
- 5 -
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 provision hereof.
- 6 -
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: /s/ Xxxxxxx X. Xxxxxxxxx
_____________________
Xxxxxxx X. Xxxxxxxxx
President
ATTEST:
/s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx, Secretary
(CORPORATE SEAL)
TRIANGLE BANK
By: /s/ Xxxxxxx X. Xxxxxxxxx
_________________________
Xxxxxxx X. Xxxxxxxxx
President
ATTEST:
/s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx, Secretary
(CORPORATE SEAL)
/s/ Xxxxxx X. Xxxxxx
__________________________(SEAL)
Xxxxxx X. Xxxxxx
- 7 -
