EXHIBIT 10.13
AGREEMENT RESPECTING EMPLOYMENT
THIS AGREEMENT ("this Agreement") entered into as of August 17th, 1998,
by and between NATIONAL COMMERCE BANCORPORATION, a Tennessee corporation
("NCBC"), NATIONAL BANK OF COMMERCE, a national banking association (the
"Bank"), and XXXXX X. XXXXXXX (Employee).
R E C I T A L S:
NCBC recognizes the experience and expertise Employee has developed over
the past several years while engaged in the private practice of law and NCBC now
wishes to take steps to assure that NCBC will have the Employee's services
available to it by entering into this Agreement Respecting Employment.
Bank is also a party to this Agreement because Employee may also become
an executive officer of the Bank with responsibilities generally associated with
the Bank's business.
In consideration of the foregoing, the mutual provisions contained
herein, and for other good and valuable consideration, the parties agree with
each other as follows:
1. EMPLOYMENT
A. NCBC shall employ the Employee as Executive Vice President of NCBC
with such duties, powers, authority, functions and responsibilities as said
title would imply and with specific responsibility for NCBC's merger and
acquisition initiative, and the Employee hereby accepts employment upon such
terms and the conditions hereinafter set forth. The Employee may also perform
such duties, and have such comparable powers, authority, functions and
responsibilities for the Bank, particularly with respect to the Bank's Trust
Division, financial services subsidiaries, etc., as may be assigned to him.
B. The Employee shall not, during the term of his employment under this
Agreement, be engaged in any other activities if such activities interfere
materially with the Employee's current duties, authority and responsibilities
for either NCBC or the Bank, except for those other activities as shall
hereafter be carried on with NCBC's or the Bank's consent. The Employee shall be
entitled to make and manage his personal investments provided such investments
or other activities do not violate in any material respect the terms of Sections
6, 7 or 8 hereof.
2. TERM
A. Subject only to the provisions of either Section 3(D) or Section 4
hereof, the term of the Employee's employment under this Agreement shall be for
a continually renewing term of three (3) years without any further action by
either NCBC or the Employee, it being the intention of the parties that there
shall be continuously a term of three (3) years duration of the Employee's
employment under this Agreement until an event has occurred as described in, or
one of the parties shall have made an election pursuant to, the provisions of
either Section 3(D) or Section 4 of this Agreement, provided that such term
shall terminate on the date the Employee becomes age 65.
3. COMPENSATION
For all services rendered by the Employee while on active status under
this Agreement, NCBC agrees to compensate the Employee for each compensation
year (January 1 through December 31) during the term hereof, as follows:
A. Base Salary. A base salary shall be payable to the Employee by NCBC
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as a guaranteed annual amount under this Agreement equal initially to the sum of
$150,000.00 per year (the "Base Salary"), which shall be payable in the
intervals consistent with NCBC=s normal payroll schedules (but in no event less
than semi-monthly). The Base Salary shall be subject to being increased (but
not decreased or adjusted other than as provided in Section 4 of this Agreement)
in the sole discretion of the Board of Directors of NCBC but only in such form
and to such extent as the Board of Directors may from time to time approve. The
official action of the Board of Directors increasing the Base Salary payable to
the Employee shall modify the amount of Base Salary stated in this Section 3(A).
B. Other Compensation. The Employee shall be entitled to participate in
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any incentive or supplemental compensation plan or arrangement instituted by
NCBC and covering its principal executive officers and to receive additional
compensation from NCBC in such form and to such extent, if any, as the Board of
Directors may in its sole discretion from time to time specify and determine;
provided, however, in the event the Employee shall go on part-time status for
any reason, the Employee shall nevertheless be entitled to be paid pro rata
incentive or supplemental compensation for the fiscal year ending in the
compensation year in which the Employee goes on part-time status, for the number
of calendar months during such fiscal year that Employee shall have been on
active status, at the same time, on the same basis and to the extent as any of
NCBC's principal executive officers on active status are selected by the Board
of Directors to receive any incentive or supplemental compensation award for
such fiscal year, in no event, however, shall such incentive or supplemental
compensation be less than $75,000.00 per year and pro rated for anything less
than a full calendar year. The phrase "principal executive officer" as used in
this Agreement shall mean the chief executive officer of NCBC and other
executive officers of NCBC who are from time to time designated as an executive
officer by the Board of Directors.
C. Tax Indemnity. Should any of the payments of Base Salary, other
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incentive or supplemental compensation, benefits, allowances, awards, payments,
reimbursements or other perquisites (including the payments provided for under
this Section 3(C)), singly, in any combination or in the aggregate, that are
provided for hereunder to be paid to or for the benefit of the Employee
(including, without limitation, the payment provided for in Section 3(D) hereof)
or under any other plan, agreement or arrangement between the Employee and NCBC,
be determined or alleged to be subject to an excise or similar purpose tax
pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, or
any successor or other comparable federal, state or local tax laws, NCBC shall
pay to the Employee such additional compensation as is necessary (after taking
into account all federal, state and local income taxes payable by the Employee
as a result of the receipt of such additional compensation) to place the
Employee in the same after tax position (including federal, state and local
taxes) he would have been in had no such excise or similar purpose tax (or any
interest or penalties thereon) been paid or incurred. NCBC hereby agrees to pay
such additional compensation within five (5) business days after the Employee
notifies NCBC that the Employee intends to file a tax return which takes the
position that such excise or similar purpose tax is due and payable in reliance
on a written opinion of the Employee's tax counsel (such tax counsel to be
chosen solely by the Employee) that it is more likely than not that such excise
tax is due and payable. The costs of obtaining such tax counsel opinion shall
be borne by NCBC, and as long as such tax counsel was chosen by the Employee in
good faith, the conclusions reached in such opinion shall not be challenged or
disputed by NCBC. If the Employee intends to make any payment with respect to
any such excise or similar purpose tax as a result of an adjustment to the
Employee's tax liability by any federal, state or local tax authority, NCBC will
pay such additional compensation by delivering its cashier's check payable in
such amount to the Employee within five (5) business days after the Employee
notifies NCBC of his intention to make such payment. Without limiting the
obligation of NCBC hereunder, the Employee agrees, in the event the Employee
makes any payment pursuant to the preceding sentence, to negotiate with NCBC in
good faith with respect to procedures reasonably requested by NCBC which would
afford NCBC the ability to contest the imposition of such excise tax; provided,
however, that the Employee will not be required to afford NCBC any right to
contest the applicability of any such excise tax to the extent that the Employee
reasonably determines (based upon the opinion of his tax counsel) that such
contest is inconsistent with the overall tax interests of the Employee. For
purposes of this Section 3(C), payments from Bank or any affiliate or successor
of the Bank or NCBC shall be treated as payments from NCBC.
D. (i) Change of Control - Operation of Section 3(D).
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(a) This Section 3(D) shall be effective, but not operative,
immediately upon execution of this Agreement by the parties hereto and shall
remain in effect so long as the Employee remains employed by NCBC on active
status and for twelve (12) months after the Employee goes on part-time status,
but shall not be operative unless and until there has been a Change in Control,
as defined in subsection (i)(b) hereof. Upon such a Change in Control, this
Section 3(D) shall become operative immediately.
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(b) "Change in Control" shall mean a change in control of NCBC that
shall be deemed to have occurred if and when, with or without the approval of
the Board of Directors of NCBC incumbent prior to the occurrence,
(1) More than 25% of the outstanding securities entitled to
vote in an election of directors of NCBC shall be acquired by any person
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) other than by any person which includes
the Employee; or
(2) As the result of a tender offer, merger, consolidation,
sale of assets or contested election, or any combination of such
transactions, the persons who were directors of NCBC immediately before
the transaction shall cease to constitute a majority of the Board of
Directors of NCBC.
(ii) Employee's Rights Upon Change of Control. If a Change in Control
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(as defined in subsection (b) of Section 3(D)(i)) occurs while the Employee is
employed on active status by NCBC, the Employee may in his sole discretion,
within eighteen (18) months after the date of the Change of Control, give notice
to the Secretary of NCBC that he intends to elect to exercise his rights under
this Section 3(D) (the "Notice of Intention"). If a Change of Control occurs
within twelve (12) months after the Employee has been placed on part-time status
pursuant to either Section 4(c)(i) or Section 4(F), the Employee may, in his
sole discretion, within twelve (12) months after the date of the Change of
Control, give notice to the Secretary of NCBC that he intends to elect to
exercise his rights under this Section 3(D) (the "Notice of Intention"). The
right to give such Notice of Intention to elect to receive the payment provided
for in subsection (iii) of this Section 3(D) shall continue for eighteen (18) or
twelve (12) months respectively from the date of the Change of Control
irrespective of any action by NCBC pursuant to Section 4(A)(iii) or Section 4(F)
within such eighteen (18) or twelve (12) month period. Within thirty (30) days
after NCBC's receipt of the Notice of Intention, NCBC shall provide written
notice to the Employee setting forth NCBC's computation of the amount that would
be payable pursuant to subsection (iii) of this Section 3(D), accompanied by the
written opinion of NCBC's independent certified public accountants confirming
NCBC's computation. If the Employee takes exception to NCBC's computation of
such amount, the Employee may (but shall not be prejudiced in his right to later
contest the amount actually paid by failure to do so) give a further written
notice to NCBC setting forth in reasonable detail the Employee's exceptions to
NCBC's computation, accompanied by the written opinion of the Employee's tax
advisor confirming the basis for such exceptions. Exercise by the Employee of
his rights pursuant to this Section 3(D) shall only be made by giving further
notice to the Secretary of NCBC (the "Notice of Exercise") within six (6) months
from the date of the Notice of Intention.
(iii) Payment upon Change of Control.
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(a) If the Employee gives the Notice of Exercise
described in subsection (ii) of this Section 3(D) to NCBC, NCBC shall pay the
Employee a lump sum amount equal to three (3) times the Employee's base amount
(as defined by Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code")), less one dollar ($1.00). NCBC shall, within five (5) business
days after the date of the Notice of Exercise, deliver to the Employee its
cashier's check in the amount payable pursuant to this subsection (iii) (a) of
Section 3(D), and payment of such amount shall terminate the Employee's rights
to receive any and all other payments, rights or benefits pursuant to Sections
3(A), 3(B), 4 and 5 of this Agreement, other than any payments, rights or
benefits arising (x) pursuant to Section 3(C), subsection (iii) of Section 3(D),
Section 3(E) or Section 12 of this Agreement, or (y) from any other agreement,
plan or policy which by its terms or by operation of law provides for the
continuation of such payments, rights or benefits after the termination of the
Employee's relationship with NCBC.
(b) Such lump sum payment shall be in addition to and
shall not be offset or reduced by any other amounts payable or that may become
payable to the Employee, or his beneficiaries, by NCBC, including, but not
limited to, salary, bonus, severance pay, consulting fees, disability benefits,
termination benefits, retirement benefits, life and health insurance benefits,
or any other compensation or benefit payment that is part of any valid previous,
current, or future contract, plan
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or agreement, written or oral, or any indemnification payments that may be or
become payable to the Employee pursuant to the provisions of NCBC's Charter, By-
laws or otherwise.
(c) If Employee gives the Notice of Exercise, in
addition to the lump sum payment under paragraph (a) above, NCBC shall pay to
Employee in a lump sum in cash within five (5) business days after the delivery
of the Notice of Exercise the aggregate of the following amounts:
(1) the sum of (A) Employee's Base Salary through
the date of the Notice of Exercise, (B) the product of (x) the highest annual
bonus paid or payable, including any bonus or portion thereof which has been
earned but deferred, during the three year period immediately prior to the date
of the Notice of Exercise (such amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the date of the Notice of Exercise, and the
denominator of which is 365 and (C) any accrued vacation pay, in each case to
the extent not theretofore paid; and
(2) The amount equal to the excess (without any
present value discount) of (A) the actuarial equivalent of the benefit under the
Bank's qualified defined benefit retirement plan (the "Retirement Plan")
(utilizing actuarial assumptions no less favorable to Employee than those in
effect under the Bank's Retirement Plan immediately prior to the Change of
Control), and the National Bank of Commerce Supplemental Employee Retirement
Plan as Amended and Restated (the "SERP") which Employee would receive if
Employee's employment continued for three years after the date of the Notice of
Exercise assuming for this purpose that all accrued benefits are fully vested,
and, assuming that Employee's compensation in each of the three years is
Employee's highest Base Salary during the three year period immediately
preceding the date of the Notice of Exercise and the Highest Annual Bonus, over
(B) the actuarial equivalent of Employee's actual benefit (paid or payable), if
any, under the Retirement Plan and the SERP as of the date of the Notice of
Exercise;
(d) If Employee gives the Notice of Exercise, for three
years after the date of the Notice of Exercise, or such longer period as may be
provided by the terms of the appropriate plan, program, practice or policy, Bank
shall continue to provide welfare benefits (including, without limitation,
medical, prescription, dental, disability, employee life, group life, accidental
death and travel accident insurance plans and programs) to Employee and/or
Employee's eligible dependents as least equal to those provided to Employee at
any time during the 120-day period immediately preceding the Change in Control
or, if more favorable to Employee, those provided generally at any time after
the Change in Control to other peer executives of the Company and its affiliated
companies; provided, however, that if Employee becomes reemployed with another
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employer and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility (but
not the time of commencement of benefits) of Employee for retiree benefits
pursuant to such plans, practices, programs and policies, Employee shall be
considered to have remained employed until three years after the date of the
Notice of Exercise and to have retired on the last day of such period;
E. Employee's Expenses. All costs and expenses (including reasonable
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legal, accounting and other advisory fees) incurred by the Employee to (w)
defend the validity of this Agreement, (x) contest any determinations by NCBC
concerning the amounts payable (or reimbursable) by NCBC to the Employee under
this Agreement, (y) determine in any tax year of the Employee the tax
consequences to the Employee of any amounts payable (or reimbursable) under
Section 3(C) or (D) hereof, or (z) prepare responses to an Internal Revenue
Service audit of, and to otherwise defend, his personal income tax return for
any year which is the subject of any such audit, or an adverse determination,
administrative proceedings or civil litigation arising therefrom that is
occasioned by or related to an audit by the Internal Revenue Service of the
Bank's income tax returns, are, upon written demand by the Employee, to be
promptly advanced or reimbursed to the Employee or paid directly, on a current
basis, by NCBC or its successors.
4. TERMINATION, PART-TIME STATUS, AND REVISED COMPENSATION, DEATH,
DISABILITY
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A. Termination. The employment of the Employee under this Agreement,
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while the Employee is on active status, may be terminated at any time by NCBC,
acting through its Board of Directors (and not a committee thereof),
(i) For cause in the event of (x) the Employee's final conviction of a
felony crime involving moral turpitude, or (y) the Employee's deliberate and
intentional continuing refusal to substantially perform his duties and
obligations under this Agreement (except by reason of incapacity due to illness
or accident) if he shall have either failed to remedy such alleged breach within
forty-five (45) days from his receipt of written notice from the Secretary of
NCBC demanding that he remedy such alleged breach, or shall have failed to take
reasonable steps in good faith to that end during such forty-five (45) day
period and thereafter, provided that the Employee thereafter shall have received
a certified copy of a resolution of the Board of Directors of NCBC adopted by
the affirmative vote of a majority of the entire membership of the Board of
Directors at a meeting called and held for that purpose and at which the
Employee was given an opportunity to be heard, finding that the Employee was
guilty of conduct set forth in this clause, that the Employee has failed to take
reasonable steps in good faith to remedy such alleged breach, and specifying the
particulars thereof in detail,
(ii) Upon a determination that the Employee has engaged in willful
fraud or defalcation or other dishonesty involving the funds, assets or the
operation of either NCBC or the Bank (or any corporate subsidiaries thereof), or
(iii) For any reason in its sole discretion upon written notice to
the Employee effective on the date that is three (3) years after the date on
which such notice is received by the Employee.
B. Termination Payment For Cause. In the event of termination of the
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Employee's employment under this Agreement by NCBC under Section 4(A)(i) or
(ii), the Employee shall only be entitled to receive the monthly installment of
his Base Salary being paid at the time of such termination, and, if applicable,
other compensation, due hereunder, computed on a pro rata basis, up to the
effective date of such termination.
C. (i) Part-time Status-Election by NCBC. In the event NCBC shall give
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Employee notice of termination of the Employee's employment under this Agreement
pursuant to Section 4(A) (iii), the Employee shall, subject to the provisions of
Section 4(D)(iii) and (v), be placed on part-time employment status for a period
of three (3) years after the date on which such notice is received by the
Employee.
(ii) Part-time Status-Election by Employee for Cause. Employee shall
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have the right at any time during his employment on active status, at his sole
option and election, by giving written notice to the Secretary of NCBC within
six (6) months after the occurrence of the event(s) that are the basis for the
giving of such notice, to place himself on part-time employment status and to
terminate his employment under this Agreement effective on the date that is
three (3) years after the date on which such notice is given by the Employee if,
at any time,
(a) NCBC shall violate this Agreement in any material respect;
or
(b) The Employee shall not be reelected or reappointed to
(other than by his own choice) or shall be removed from (other than by reasons
justifying such action by NCBC under Sections 4(A)(i) or (ii), 4(E), or 4(F) of
this Agreement) the offices and positions in which Employee is serving on the
date of this Agreement or such higher or additional office or position to which
the Employee may subsequently be elected; or
(c) The scope of the duties, powers, and authority assigned to
the Employee (or attached to the positions specified in Section 4(C)(ii)(b)) on
the date hereof is diminished (without the Employee's express consent) whether
or not for cause (other than as defined in Section 4(A)(i) or (ii)).
(iii) Termination - Election by Employee. Employee shall have the
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right at any time during his employment on active status, by giving written
notice to the Secretary of NCBC to terminate the Employee's employment under
this Agreement effective ninety days (90) after the date on which such notice is
given by the Employee. In the
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event the Employee shall make such election under this Section 4(C) (iii), the
Employee shall, in addition to all other reimbursements, payments or other
allowances required to be paid under this Agreement or under any other plan,
agreement or policy which survives the termination of this Agreement, be
entitled to be paid, in addition to the Base Salary payable during such ninety
(90) day period after the giving of such notice, a lump sum payment payable by
delivery of NCBC's cashier's check within five (5) business days after the end
of such ninety (90) day period, in an amount equal to three (3) monthly
installments of the Base Salary (less required tax withholding) in effect
pursuant to Section 3(A) hereof at the time the Employee makes such election
under this Section 4(C) (iii). Thereupon, this Agreement shall terminate and
Employee shall have no further rights under or be entitled to any other benefits
of this Agreement, provided that the provisions of Sections 3(C), 3(E)(y), 6, 7,
8 and 12 shall survive such termination.
D. Employee's Rights on Part-time Status. During the period that the
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Employee is on part-time status,
(i) NCBC shall pay Employee a guaranteed minimum annual Base Salary
from the date the Employee goes on part-time status for a period of three (3)
years in an amount equal to seventy-five percent (75%) of the average of the
total annual direct compensation paid to the Employee by NCBC (whether under
this Agreement, a predecessor agreement or otherwise) for the two (2) highest of
the three (3) compensation years immediately preceding the compensation year in
which the notice specified in Section 4(a)(iii), 4(c)(ii) or Section 4(F) of
this Agreement is given. Attached hereto as Exhibit A is a sample calculation
showing how Employee's part-time Base Salary would be calculated if Employee
went on part-time status under this Agreement during 2002.
As used in this Agreement the phrase "total annual direct
compensation" shall mean:
(a) The gross amount of Base Salary (as from time to time
adjusted) paid to the Employee during a compensation year; plus
(b) All other forms of direct compensation attributable to that
specific compensation year whether or not actually paid to the Employee during a
subsequent compensation year. Compensation with respect to this subsection (b)
shall include, but not be limited to, allowances or incentive or supplemental
compensation awards made to the Employee and any amounts paid by NCBC for the
benefit of the Employee into any savings, deferred compensation or similar NCBC-
sponsored plan or arrangement. Compensation with respect to this subsection
(b) shall not include any amounts that must be recognized as compensation in any
such compensation year as a result of the Employee's exercise of a stock option,
exercise of a stock appreciation right, disqualified disposition of stock
acquired pursuant to the exercise of an incentive or non-qualified stock option.
Compensation with respect to this subsection (b) shall also not include any
amounts received by the Employee during a compensation year which would, as
hereinabove provided, be taken into account in computing the direct compensation
for a prior compensation year.
(ii) The guaranteed minimum annual Base Salary payable by NCBC to the
Employee pursuant to this Section 4(D) shall be increased (but not decreased)
annually on the first anniversary of the date of the Employee's going on part-
time status and each anniversary thereafter, on a compound basis, by the greater
of (x) five percent (5%) or (y) the same percentage increase (if any) in the
Consumer Price Index for All Urban Consumer's - All Items Index, for
Region/population size class cross classification for South/B (or any
substantially similar index published for the same area) as published by the
U.S. Department of Labor, Bureau of Labor Statistics for the twelve (12) month
period immediately preceding the first anniversary of the date of the Employee's
going on part-time status and on each yearly anniversary thereafter;
(iii) The Employee shall continue to participate (at not less than
his highest levels of participation or coverage during the last twelve (12)
months the Employee was on active status) in NCBC's or the Bank's pension, group
life/medical/dental/accidental disability insurance, thrift, savings, deferred
compensation, stock option, unit or award plans and other NCBC or Bank benefit
plans that are from time to time available. No change from active to part-time
status by Employee pursuant to any provision of this Agreement shall be deemed
to constitute a termination or cessation of Employee's employment or a break in
Employee's continuous
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employment for purposes of any stock option agreement between Employee and NCBC
under any stock option plan of NCBC. Subject to the terms of any such stock
option agreements and stock option plans, nothing in this Agreement and no
action by NCBC or Employee pursuant to any provision of this Agreement shall (1)
interrupt or prevent the orderly vesting of Employee in his stock options or
accelerate the time at which Employee would otherwise be entitled to exercise
his stock options in accordance with the terms of such stock option agreements
and stock option plans, or (2) cause Employee's stock options to expire earlier
than they otherwise would under such stock option agreements and stock option
plans;
(iv) The Employee shall not be prevented from accepting other
employment while on part-time status or engaging in (and devoting substantially
all of his time to) other business activities that are not in conflict with the
limitations set forth in Section 6 hereof;
(v) This Agreement and Employee's continuing employment on part-time
status may be terminated at any time by NCBC (x) pursuant to the provisions of
Section 4(A)(ii), or (y) if the Employee violates the provisions of Sections 6,
7 or 8, respectively;
(vi) While on part-time status and except as otherwise required
herein, the Employee shall not be required to perform any regular duties for
NCBC (except to provide such services consistent with the Employee's educational
background, experience and prior positions with NCBC, as may be acceptable to
the Employee) or to seek or accept additional employment with any other person
or firm (although the Employee shall be free to do so, so long as accepting such
additional employment or engaging in other business activity is not in conflict
in any material respect with the limitations set forth in Section 6 of this
Agreement). If the Employee, at his discretion, shall accept any such
additional employment or engage in any such other business activity consistent
with Section 6 of this Agreement, there shall be no offset, reduction or effect
upon any rights, benefits or payments to which the Employee is entitled pursuant
to this Agreement. Furthermore, the Employee shall have no obligation to account
for, remit, rebate or pay over to NCBC any compensation or other amounts earned
or derived in connection with such additional employment or business activity
consistent with Section 6 of this Agreement; and
(vii) The Employee shall, however, make himself generally available
for special projects or to consult with NCBC and its employees at such times and
at such places as may be reasonably requested by NCBC and which shall be
reasonably satisfactory to the Employee and consistent with the Employee's
regular duties and responsibilities in the course of his then new occupation or
other employment, if any.
E. Death. In the event of the Employee's death during the term of his
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employment hereunder, NCBC shall pay a death benefit to the Employee's surviving
spouse or to the executor or administrator of the Employee's estate (if his
spouse shall not survive him) an amount equal to two times his annual Base
Salary then payable pursuant to Sections 3(A) or 4(D), as the case may be, such
death benefit to be paid in forty-eight (48) equal monthly installments
commencing on the first day of the month following the date of death of the
Employee.
F. Disability. The Employee shall be covered by either NCBC's or the
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Bank's disability benefit plan as such plan may from time to time exist. NCBC or
the Bank may eliminate or change the terms and conditions of said plan at its
discretion with no liability to the Employee other than the liability, if any,
under such plan which may have accrued up to the elimination or change of such
plan. In the event because of physical or mental illness or personal injury
while the Employee is on active status or part-time status, the Employee shall
become permanently unable or disabled such that he is unable to perform, and in
all reasonable medical likelihood, going to continue indefinitely to be unable
to perform his normal duties in his regular manner, as determined by
independent, competent medical authority,
(i) If such disability determination occurs while the Employee is on
active status, NCBC may elect (but shall not be obligated) to terminate the
Employee's employment under this Agreement on a date which is not less than
three (3) years after the date on which written notice of such termination is
received by the Employee in which event the Employee shall be placed on part-
time status, and NCBC shall pay to the
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Employee the Base Salary payable pursuant to Section 4(D)(i) for a period not
less than three (3) years thereafter; or
(ii) If such disability determination occurs while the Employee is on
part-time status pursuant to Section 4(C)(i), NCBC shall continue to pay to the
Employee the amount of his Base Salary then payable for the greater of (x) the
balance of the period remaining under the term of this Agreement, or (y) for one
(1) year; reduced, in any case however, by the amount of any payments made to
such Employee under the coverage then afforded to the Employee by any NCBC or
Bank disability benefit plan in effect at the time such disability determination
is made. The Employee shall, during such disability and until the effective
date of the termination of this Agreement and of payments hereunder by NCBC to
the Employee, continue to enjoy all other applicable benefits of employment that
would otherwise pertain to continued employment on part-time status pursuant to
this Agreement.
G. Return of Property. Upon termination of the Employee's employment
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under this Agreement, however brought about, the Employee (or his
representatives) shall promptly deliver and return to NCBC all NCBC property
including, but not limited to, credit cards, manuals, customer lists, financial
data, letters, notes, notebooks, reports and copies of any of the above, and any
Protected Information (as defined in Section 7) which is in the possession or
under the control of the Employee.
5. OTHER EMPLOYEE RIGHTS
A. The Employee shall be entitled to (i) participate in any NCBC or Bank
pension, group life/medical/dental/accidental, disability insurance, thrift,
savings, deferred compensation, incentive compensation, stock option, unit or
award plans, vacation plans, automobile allowances and all other NCBC or Bank
benefit plans, fringe benefits, allowances and accommodations of employment as
are from time to time generally available or applicable to NCBC=s principal
executive officers, and (ii) annual vacations in accordance with the vacation
policy established by NCBC or the Bank.
B. The Employee is authorized to incur reasonable business expenses
while on active status as an employee of NCBC, including expenses for meals,
hotel and air travel, telephone, automobile and similar items. NCBC shall
either pay directly or promptly reimburse the Employee for such expenses upon
the presentment by the Employee from time to time of an itemized accounting (as
required by NCBC or Bank policies) of such expenditures for which reimbursement
is sought.
C. The Employee shall, while on active status, be provided by NCBC with
office space, furnishings and facilities, parking, secretarial assistance and
equipment.
6. COVENANT NOT TO COMPETE
A. The Employee recognizes that in the highly competitive businesses in
which NCBC and are engaged, personal contact is of primary importance in
securing new customers and in retaining the accounts and goodwill of present
customers and protecting the business of NCBC. The Employee, therefore, agrees
that at all times during the term of his employment hereunder and for a period
of two (2) years after the termination of his employment hereunder, he will not,
for himself or on behalf of any person, corporation, association or other entity
other than NCBC or the Bank:
(i) Engage in the commercial banking business within Shelby County,
Tennessee, or within any other county in any state in which NCBC or any
subsidiary corporation or other entity owned or controlled by NCBC maintains an
office or is engaged in the commercial banking business that produced in excess
of 5% of the net income after tax of NCBC on a consolidated basis for the twelve
months prior to the date of termination or employment; or
(ii) Directly or indirectly solicit or attempt to solicit business
from any customer of NCBC or any subsidiary thereof existing on the date of
termination of such employment; provided, however, that this covenant not to
compete shall not apply after a termination of employment if such termination
occurs for cause under Section 4(a)(i) or (ii).
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It is the intention of this section that if Employee returns to
private practice as an attorney or certified public accountant, nothing herein
shall prevent him from providing such legal or accounting services to any
person, partnership or corporation doing business with NCBC or any subsidiary
thereof.
B. If the provisions of this Section 6 are violated, in whole or in
part, NCBC shall be entitled, upon application to any court of proper
jurisdiction, to a temporary restraining order or preliminary injunction
(without the necessity of posting any bond with respect thereto) to restrain and
enjoin the Employee from such violation without prejudice to any other remedies
NCBC may have at law or in equity. Further, in the event that the provisions of
this Section 6 should ever be deemed to exceed the time, geographic or
occupational limitations permitted by the applicable laws, the Employee and NCBC
agree that such provisions shall be and are hereby reformed to the maximum time,
geographic or occupational limitations permitted by the applicable laws. The
provisions of this Section 6 shall survive the termination of the Employee's
employment or expiration or termination of this Agreement.
7. CONFIDENTIAL INFORMATION
A. The Employee recognizes and acknowledges that he has and will
continue to have access to various confidential or proprietary information
concerning NCBC, the Bank, and their respective subsidiaries, of a special and
unique value which may include, without limitation, (i) books and records
relating to operation, finance, accounting, loans, investments, personnel and
management, (ii) written policies and other printed matter relating particularly
to operations such as customer names and addresses and customer financial
information. The Employee also recognizes that a portion of NCBC's business is
dependent upon many business secrets including business opportunities, marketing
or business diversification plans, business development, methods and processes,
financial data and the like. The Employee acknowledges and agrees that
protection of this confidential information and business secrets against
unauthorized disclosure and use is of critical importance to NCBC, and the
Employee therefore agrees that he will not at any time, either while employed by
NCBC or afterwards, knowingly make any independent use of, or knowingly disclose
to any other person or organization (except as required by regulatory authority,
by a court or as authorized by NCBC) any of the confidential information or
business secrets.
B. In the event of a breach or threatened breach by the Employee of the
provisions of this Section 7, the Employee agrees that NCBC shall be entitled to
a temporary restraining order or a preliminary injunction (without the necessity
of NCBC posting any bond in connection therewith) restraining the Employee from
using or disclosing, in whole or in part, such confidential information and
business secrets. Nothing herein shall be construed as prohibiting NCBC from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Employee.
8. EMPLOYEE CONDUCT
A. The Employee represents and agrees with NCBC that he will not
knowingly make any disbursement or other payment of any kind or character out of
the compensation paid or expenses reimbursed to him pursuant hereto or with any
other fund, which contravene, in any material respect, any policy of NCBC or the
Bank or, in any material respect, any applicable statute or rule, regulation or
order of any jurisdiction, foreign or domestic. The Employee further agrees to
indemnify and save harmless NCBC or the Bank from any liabilities, obligations,
claims, penalties, fines or losses resulting from any unauthorized or unlawful
acts of the Employee which contravene in any material respect any policy of NCBC
or the Bank or any statute, rule, regulation or order of any jurisdiction,
foreign or domestic, applicable to the Employee, NCBC or the Bank. The
provisions of this Section 8 shall survive the dissolution or termination of the
Employee's employment under this Agreement.
B. The Employee acknowledges that he has been furnished with a current
copy of the policy and procedures manual of NCBC, dated July 1997, that he has
read and understands such policies and procedures set forth in such manual, that
he understands such policies and procedures (and will read and become familiar
with any revisions or supplements to this manual) are applicable to the Employee
in the performance of his duties and job performance for NCBC, and that he
agrees to observe in all material
-24-
respects NCBC's policies and procedures in the conduct by the Employee of his
employment duties for NCBC.
C. The Employee agrees to disclose honestly and fully all information
and documentation in his possession concerning all transactions or events
relating to or affecting NCBC or any direct or indirect subsidiary owned,
controlled by NCBC, as and to the extent such information or documentation is
requested by NCBC or the authorized representatives thereof; provided that if
the Employee indicates to NCBC that the information or documentation requested
is privileged, confidential or personally sensitive, appropriate steps will be
taken to attempt to protect such privilege, confidentiality or privacy to the
extent possible consistent with the ethical and legal obligations applicable to
NCBC, but neither such assertions by the Employee nor the undertakings attempted
by NCBC with respect thereto shall qualify the unconditional disclosure
obligation of the Employee set forth above.
9. GENERAL PROVISIONS
A. In case any one or more of the provisions of this Agreement shall,
for any reason, be held or found by final judgment of a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect (i) such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and (ii) this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein
(except that this subsection (ii) shall not prohibit any modification allowed
under Section 6 hereof), and (iii) if the effect of a holding or finding that
any such provision is either invalid, illegal or unenforceable is to modify to
the Employee's detriment, reduce or eliminate any compensation, reimbursement,
payment, allowance or other benefit to the Employee intended by NCBC and
Employee in entering into this Agreement, NCBC shall promptly negotiate and
enter into an agreement with the Employee containing alternative provisions
(reasonably acceptable to the Employee), that will restore to the Employee (to
the extent lawfully permissible) substantially the same economic, substantive
and income tax benefits the Employee would have enjoyed had any such provision
of this Agreement been upheld as legal, valid and enforceable. Failure to
insist upon strict compliance with any provision of this Agreement shall not be
deemed a waiver of such provision or of any other provision of this Agreement.
B. The Employee acknowledges receipt of a copy of this Agreement
(together with any attachments hereto), which has been executed in duplicate and
agrees that, with respect to the subject matter hereof, it is the entire
Agreement with NCBC. Any other oral or any written representations,
understandings or agreements with NCBC or any of its officers or representatives
covering the same subject matter which are in conflict with this Agreement are
hereby merged into and superseded by the provisions of this Agreement.
C. NCBC shall have no right of set-off or counterclaim in respect of any
debt or other obligation of the Employee to NCBC against any payment or other
obligation of NCBC to the Employee provided for in this Agreement or pursuant to
any other plan, agreement or policy.
D. No provision of this Agreement may be amended, modified or waived
unless such amendment, modification or waiver shall be agreed to in writing and
signed by the Employee and by a person duly authorized by NCBC's Board of
Directors.
E. No right to or interest in any compensation or reimbursement payable
hereunder shall be assignable or divisible by the Employee; provided, however,
that this provision shall not preclude the Employee from designating one or more
beneficiaries to receive any amount that may be payable after his death and
shall not preclude his executor or administrator from assigning any right
hereunder to the person or persons entitled thereto.
F. The headings of sections and subsections hereof are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
G. (i) NCBC consents with respect to any action, suit or other legal
proceeding pertaining directly to this Agreement or to the interpretation of or
enforcement of any of Employee's rights hereunder, to service of process in the
State
-25-
of Tennessee and service of same at Xxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx
00000 upon any executive officer of NCBC. NCBC irrevocably (i) agrees that any
such suit, action or legal proceeding may be brought in the courts of such state
or the courts of the United States for such state, (ii) consents to the
jurisdiction of each such court in any such suit, action or legal proceeding and
(iii) waives any objection it may have to the laying of venue of any such suit,
action or legal proceeding in any of such courts.
(ii) This Agreement shall be construed in accordance with and governed
for all purposes by the laws of the State of Tennessee.
H. This Agreement may not be assigned, partitioned, subdivided, pledged,
or hypothecated in whole or in part without the express prior written consent of
the Employee and NCBC. This Agreement shall not be terminated either by the
voluntary or involuntary dissolution or the winding up of the affairs of NCBC,
or by any merger or consolidation wherein NCBC is not the surviving corporation,
or by any transfer of all or substantially all of NCBC's assets on a
consolidated basis. In the event of any such merger, consolidation or transfer
of assets, the provisions of this Agreement shall be binding upon and shall
inure to the benefit of the surviving corporation or to the corporation to which
such assets shall be transferred. In the event of such a merger, consolidation
or transfer of assets and NCBC is not the surviving corporation, notice is
deemed to have been given if delivered to the Secretary of NCBC's corporate
successor in the manner described in Section 11.
I. If any amounts which are required or determined to be paid or payable
or reimbursed or reimbursable to the Employee under this Agreement (or under any
other plan, agreement, policy or arrangement with NCBC) are not so paid promptly
at the times provided herein or therein, such amounts shall accrue interest
compounded daily at the annual percentage rate which is two percentage points
(2%) above the interest rate which is established by the Bank, from time to
time, as its Prime Rate, from the date such amounts were required or determined
to have been paid or payable or reimbursed or reimbursable to the Employee until
such amounts and any interest accrued thereon are finally and fully paid,
provided, however, that in no event shall the amount of interest contracted for,
charged or received hereunder exceed the maximum non-usurious amount of interest
allowed by applicable law.
J. NCBC agrees with the Employee that, except to the extent required by
law, it will not make or publish, without the express prior written consent of
the Employee, any written or oral statement concerning the terms of the
Employee's employment relationship with NCBC and will not, if the Employee goes
on part-time status for any reason or xxxxxx his employment with NCBC, make or
publish any written or oral statement concerning the Employee including, without
limitation, his work-related performance or the reasons or basis for the
Employee going on part-time status or otherwise severing his employment
relationship with NCBC.
10. TERMINATION OF PRIOR AGREEMENTS
This Agreement shall terminate and supersede any and all prior written or
oral agreements or understandings existing between NCBC and the Employee with
respect to employment or compensation, and NCBC and the Employee hereby mutually
release and discharge each other from any further obligation, liability or
responsibility under any of the foregoing.
11. NOTICES
Any notice required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been given when delivered in person or
when deposited in the U.S. mail, registered or certified, postage prepaid, and
mailed to the respective addresses set forth herein.
12. DISPUTES; PAYMENT OF ATTORNEYS' FEES
If at any time during the term of this Agreement or afterwards there
should arise any dispute as to the validity, interpretation or application of
any term or condition of this Agreement, NCBC agrees to pay the Employee's
reasonable attorneys' fees (including expenses of investigation) incurred by the
Employee in connection with any such dispute or litigation provided that the
Employee shall be the prevailing
-26-
party. The provisions of this Section 12 shall survive the expiration or
termination of this Agreement and of the Employee's employment hereunder.
IN WITNESS WHEREOF, the parties have executed and delivered this Amended
and Restated Agreement as of the day and year indicated above.
/s/ Xxxxx X. Xxxxxxx
---------------------------------------
XXXXX X. XXXXXXX
Employee's Permanent Address:
Print:
---------------------------------
(Street)
----------------------------------------
(City) (State) (Zip)
NATIONAL COMMERCE BANCORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx, Chairman of the
Board and Chief Executive Officer
/s/Xxxxx X. Xxxxxxxx, Xx.
-------------------------
Xxxxx X. Xxxxxxxx, Xx.
Chairman of the NCBC Compensation/Benefits Committee
NATIONAL BANK OF COMMERCE
By:/s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx, Chief Financial Officer
EXHIBIT A
Xxxxx X. Xxxxxxx
----------------
Sample Computation of Part-Time Base Salary Under 4(D)(i) assuming the
notice specified in Section 4(a)(iii), 4(c)(ii) or Section 4(F) was given in
2002. (This computation also assumes a 10% increase per year in compensation)
Formula: 75% of the average of the total annual direct compensation paid
-------
to Employee for the two (2) highest of the three (3)
compensation years immediately preceding 2002.
1999: $150,000 Base Salary
----
75,000 Bonus
--------
$225,000
2000: $165,000 Base Salary
----
82,500 Bonus
--------
$247,500
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2001: $181,500 Base Salary
----
90,750 Bonus
--------
$272,250
The two highest years were 2000 and 2001.
$247,500 + 272,250 = 519,750
$519,750 + 2 = 259,875.00
$259,875 x 75% = 194,906.25
Part-Time Base Salary = 194,906.25
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