CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT is made and entered into as of the
15th day of March, 1995 by and between FIRST CHARTER CORPORATION (the
"Company"), a North Carolina corporation, and Phillip M. Floyd ("Employee"), an
individual residing in Concord, North Carolina.
Background Statement
First Charter National Bank (the "Bank") is a wholly-owned subsidiary
of the Company. Employee is a valued employee of the Bank [and the Company]. In
order to induce Employee to continue employment with the Bank [and the Company]
and to enhance Employee's job security, the Company desires to provide
compensation to Employee in the event Employee's employment is terminated
following a change in control of the Company, as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the compensation the Company agrees to pay to Employee, Employee's
continued employment with the Bank [and the Company], and of other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:
1. TERMINATION FOLLOWING A CHANGE IN CONTROL. If a Change in Control
(as defined in Section 1(iii) hereof) occurs and if, within one year following
the Change in Control, the employment of Employee is terminated (x) by the
Company or the Bank other than for Cause or (y) by Employee for Good Reason,
Employee's Compensation shall continue to be paid, subject to applicable
withholdings, by the Company for a period of 24 months following such
termination of employment. In lieu of receiving payment of Compensation for such
24-month period in installments, the Employee may elect, at any time prior to
the earlier to occur of a Change in Control or action by the Board of Directors
of the Company with respect to an event which would, upon consummation, result
in a Change in Control (which election shall be evidenced by notice filed with
the Company), to be paid the present value of any such Compensation in a lump
sum within 30 days of termination of the Employee's employment under
circumstances entitling such Employee to Compensation hereunder. The calculation
of the amount due shall be made by the independent accounting firm then
performing the Company's independent audit, and such calculation, including but
not limited to the discount factor used to determine present value, shall be
conclusive.
For purposes of this Agreement, the following terms shall have the
meanings indicated:
(i) CAUSE. Termination by the Company or the Bank for "Cause"
shall mean (A) termination on account of willful misconduct of
a material nature by the Employee in connection with
performance of his duties as an employee; (B) use of alcohol
or narcotics that affects his ability to perform his duties as
an employee; (C) conviction of a felony or serious misdemeanor
involving moral turpitude; (D) embezzlement or theft from the
Company or the Bank; (E) gross inattention to or dereliction
of duty; or (F) performance by the Employee of any
other willful acts which Employee knew or reasonably should
have known would be materially detrimental to the Company or
the Bank.
(ii) GOOD REASON. Termination by the Employee for "Good Reason"
shall mean (A) a material reduction in Employee's position,
duties, responsibilities or status as in effect immediately
preceding the Change in Control, or a change in Employee's
title resulting in a material reduction in his
responsibilities or position with the Company or the Bank as
in effect immediately preceding the Change in Control, in
either case without Employee's consent; (B) a material
reduction in the rate of Employee's base salary as in effect
immediately preceding the Change in Control or a material
decrease in the bonus percentage to which Employee was
entitled pursuant to the Company's Executive Incentive Bonus
Plan at the end of the fiscal year immediately preceding the
Change in Control, in either case without Employee's consent;
provided, however, that nothing herein shall be construed to
guarantee the Employee's bonus award if performance, either by
the Company or Employee, is below target as set forth in such
Executive Incentive Bonus Plan; or (C) the relocation of
Employee, without his consent, to a location outside a 30 mile
radius of Concord, North Carolina, following a Change in
Control.
(iii) CHANGE IN CONTROL. For purposes of this Agreement, "Change in
Control" shall mean (A) the consummation of a merger,
consolidation, share exchange or similar transaction of the
Company with any other corporation as a result of which the
holders of the voting capital stock of the Company as a group
would receive less than 50% of the voting capital stock of the
surviving or resulting corporation; (B) the sale or transfer
(other than as security for obligations of the Company) of
substantially all the assets of the Company; (C) in the
absence of a prior expression of approval by the Board of
Directors, the acquisition of more than 20% of the Company's
voting capital stock by any person within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), other than a person, or group
including a person, who beneficially owned, as of the date of
this Agreement, more than 5% of the Company's securities; (D)
during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors
of the Company cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director
was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of
the period; or (E) any other change in control of the Company
of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act or the acquisition of control, within
the meaning of Section 2(a)(2) of the Bank Holding Company Act
of 1956, as amended, or Section 602 of the Change in Bank
Control Act of 1978, of the Company by any person, company or
other entity.
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(iv) COMPENSATION. Employee's Compensation shall consist of the
following: (A) Employee's annual base salary, as paid by the
Company or the Bank, in effect immediately preceding the
Change in Control and (B) the average of any bonus paid by the
Company or the Bank to Employee during the two most recent
fiscal years ending prior to such Change in Control pursuant
to the Company's Executive Incentive Bonus Plan.
2. ADDITIONAL BENEFITS. Upon termination of Employee's employment
entitling Employee to Compensation set forth in Section 1 hereof, the Company
shall maintain in full force and effect for the continued benefit of Employee
for such 24-month period health insurance (including coverage for Employee's
dependents to the extent dependent coverage is provided by the Company for its
employees generally) under such plans and programs in which Employee was
entitled to participate immediately prior to the date of such termination of
employment, provided that Employee's continued participation is possible under
the general terms and provisions of such plans and programs. In the event that
Employee's participation in any such plan or program is barred, the Company
shall arrange to provide Employee with health insurance benefits for such
24-month period substantially similar to those which Employee would otherwise
have been entitled to receive under such plans and programs from which his
continued participation is barred. However, in no event will Employee receive
from the Company the health insurance contemplated by this Section 2 if Employee
receives comparable insurance from any other source.
3. LIMIT ON PAYMENTS. It is the intention of the Company and Employee
that no portion of the payment made under this Agreement, or payments to or for
Employee under any other agreement or plan, be deemed to be an excess parachute
payment as defined in Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor provision. The Company and Employee agree
that the present value of any payment hereunder and any other payment to or for
the benefit of Employee in the nature of compensation, receipt of which is
contingent on a Change in Control of the Company, and to which Section 280G of
the Code or any successor provision thereto applies, shall not exceed an amount
equal to one dollar less than the maximum amount that Employee may receive
without becoming subject to the tax imposed by Section 4999 of the Code or any
successor provision or which the Company may pay without loss of deduction under
Section 280G of the Code or any successor provisions. Present value for purposes
of this Agreement shall be calculated in accordance with Section 1274(b)(2) of
the Code or any successor provision. In the event that the provisions of Section
280G and 4999 of the Code or any successor provisions are repealed without
succession, this Section 2 shall be of no further force or effect.
4. EFFECT OF AGREEMENT. Nothing contained in this Agreement shall
confer upon Employee any right to continued employment by the Company or the
Bank or shall interfere in any way with the right of the Company or the Bank to
terminate his employment at any time for any reason. The provisions of this
Agreement shall not affect in any way the right or power of the Company to
change its business structure or to effect a merger, consolidation, share
exchange or similar transaction, or to dissolve or liquidate, or sell or
transfer all or part of its
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business or assets.
5. SOURCE OF PAYMENT. All payments provided for under this Agreement
shall be paid in cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation of assets shall be
made to assure payment, except as provided to the contrary in funded benefits
plans. Employee shall have no right, title or interest whatsoever in or to any
investments that the Company may make to aid the Company in meeting its
obligations hereunder. Nothing contained herein, and no action taken pursuant to
the provisions hereof, shall create or be construed to create a trust of any
kind or a fiduciary relationship between the Company and Employee or any other
person. To the extent that any person acquires a right to receive payments from
the Company hereunder, such right shall be no greater than the right of an
unsecured creditor of the Company.
6. GENERAL PROVISIONS.
(i) BINDING EFFECT. This Agreement shall be binding upon, and
inure to the benefit of, Employee and the Company and their
respective permitted successors and assigns. Neither this
Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries, or legal
representatives without the Company's prior written consent.
The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, share exchange
or otherwise) to all or substantially all of the business
and/or assets of the Company, by agreement in form and
substance satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it
if no such succession had taken place. Failure of the Company
to obtain such agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall
entitle Employee to compensation from the Company in the same
amount and on the same terms as he would be entitled to
hereunder if he terminated his employment for Good Reason,
except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be
deemed the date Employee's employment was terminated. As used
in this Agreement, "Company" shall mean the Company as defined
herein and any successor to its business and/or assets as
aforesaid that executes and delivers the agreement provided
for in this Section 6(i) or that otherwise becomes bound by
the all terms and provisions of this Agreement by operation of
law.
(ii) AMENDMENT OF AGREEMENT. This Agreement may not be modified or
amended except by an instrument in writing signed by the
parties hereto.
(iii) HEADINGS AND GENDER. The headings of paragraphs herein are
included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions
of this Agreement.
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(iv) GOVERNING LAW. This Agreement has been executed and delivered
in the State of North Carolina, and its validity,
interpretation, performance and enforcement shall be governed
by the laws of such state.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above stated.
FIRST CHARTER CORPORATION
By: /s/ Lawrence M. Kimbrough
EMPLOYEE:
/s/ Phillip M. Floyd (SEAL)
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