Exhibit 10.4
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
CHANGE OF CONTROL AGREEMENT
This Agreement is entered into as of this 8th day of December, 2005 by
and between Cornerstone Bancorp (the "Company") and Xxxxxxxx X. Xxxxxxxxx (the
"Executive").
The principal purpose of this agreement is to protect Executive against
a Change in 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.
In consideration of services previously provided to the Company by the
Executive, and Executive's willingness to continue employment with the Company,
the parties hereby agree as follows:
1. In the event that, within five years after the date of this Agreement, any
Change of Control (as defined below) of the Company is effected, then Executive
shall be entitled to the following benefits:
(a) If Executive terminates her employment with the Company or is
terminated by the Company at any time within the six months following
the effective date of an event listed in (i), (ii), (iii) or (iv) in
the definition below, upon such termination Executive shall be entitled
to a lump sum payment equal to one and one-half times the Executive's
annual salary in effect at the date of termination.
(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 if either (i) voting control of the
Company is acquired, directly or indirectly, by any person or group acting in
concert, (ii) the Company is merged with or into any other entity and the
Company is not the surviving entity of the merger, (iii) voting control of any
subsidiary of the Company by which subsidiary Executive is principally employed
is acquired, directly or indirectly, by any person or group acting in concert,
or (iv) 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.
2. Commencing on the first anniversary after the date of this Agreement, 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
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 Change of
Control Agreement as of the date first above written.
[SIGNATURES OMITTED]
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