EXHIBIT 10.49
CHANGE IN CONTROL
AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT
(this “Agreement”), dated this
day of November, 2005, by and
between Community Bancshares, Inc. a Delaware corporation (the
“Company”), and John W. Brothers (the
“Executive”).
WITNESSETH:
WHEREAS, the Company wishes to
assure itself and its key employees of continuity of management and
objective judgment in the event of any actual or contemplated
Change in Control of the Company, and the Executive is a key
employee of the Company or one of its subsidiaries and is an
integral part of management of the Company (for purposes hereof
employment with any present or future parent or subsidiary
corporation of the Company shall be considered employment by the
Company); and
WHEREAS, this Agreement is not
intended to materially alter the compensation and benefits that the
Executive could reasonably expect to receive in the absence of a
Change in Control of the Company, and this Agreement accordingly
will be operative only upon circumstances relating to an actual or
anticipated change in control of the Company.
NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants herein
contained, the parties hereby agree as follows:
I. OPERATION OF
AGREEMENT
This Agreement shall be effective
immediately upon its execution by the parties hereto, but anything
in this Agreement to the contrary notwithstanding, neither the
Agreement nor any provision hereof shall be operative unless,
during the term of this Agreement, there has been a Change in
Control of the Company during the term of this Agreement, all of
the provisions hereof shall become operative
immediately.
II. TERM OF
AGREEMENT
The term of this Agreement shall be
for an initial three (3) year period commencing on the date
hereof; provided however that this Agreement shall be extended
automatically for one (1) additional year at the end of this
initial term and at the end of each additional year thereafter,
unless the Compensation Committee delivers written notice twelve
(12) months prior to the end of such term, or extended term,
to the Executive, that the Agreement will not be extended. In such
case, the Agreement will terminate at the end of the term, or
extended term, then in progress.
However, in the event a Change in
Control occurs during the original or any extended term, this
Agreement will remain in effect until all obligations of the
Company hereunder have been fulfilled, and until all benefits
required hereunder have been paid to the Executive.
III. DEFINITIONS
1. “ Board ” or
“ Board of Directors ” - the Board of Directors
of the Company.
2. “ Cause ” -
either
(I) any act that constitutes, on the
part of the Executive, (A) fraud, dishonesty, a felony or
gross malfeasance of duty, and (B) that directly results in
material injury to the Company; or
(ii) conduct by the Executive in his
office with the Company that is grossly inappropriate and
demonstrably likely to lead to material injury to the Company, as
determined by the Board acting reasonably and in good
faith;
provided, however, that in the case of
(ii) above, such conduct shall not constitute Cause unless the
Board shall have delivered to the Executive notice setting forth
with specificity (A) the conduct deemed to qualify as Cause,
(B) reasonable action that would remedy such objection, and
(c) a reasonable time (not less than thirty (30) days)
within which the Executive may take such remedial action, and the
Executive shall not have taken such specified remedial action
within such specified reasonable time.
3. “ Change in Control
” - Either
(i) the acquisition, directly or
indirectly, by any “person” (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of
1937, as amended), other than those persons in control of the
Company as of the effective date of this Agreement, within any
twelve (12) month period of securities of the Company
representing an aggregate of twenty percent (20%) or more of
the combined voting power of the Company’s then outstanding
securities; or
(ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board, cease for any reason to constitute at least a
majority thereof, unless the election of each new director was
approved in advance by a vote of at least a majority of the
directors then still in office who were directors at the beginning
of the period; or
iii) consummation of (a) a
merger, consolidation or other business combination of the Company
with any other “person” (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) or affiliate thereof, other than a merger,
consolidation or business combination which would result in the
outstanding common stock of the Company immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into common stock of the surviving entity or a
parent or affiliate thereof) at least sixty (60)% of the
outstanding common stock of the Company or such surviving entity or
parent or affiliate thereof outstanding immediately after such
merger, consolidation or business combination, or (b) a plan
of complete liquidation of the Company or an agreement for the sale
of disposition by the Company of all or substantially all of the
Company’s assets; or
(iv) the occurrence of any other
event or circumstance which is not covered by (i) through
(iii) above which the Board determines affects control of the
Company and, in order to implement the purposes of this Agreement
as set forth above, adopts a resolution that such event or
circumstance constitutes a Change in Control of the purposes of
this Agreement.
4. “ Code ” - the
Internal Revenue Code of 1986, as amended.
5. “ Compensation
Committee ” - the Executive Compensation Committee of the
Board of Directors of the Company, or any successor
committee.
6. “ Disability ”
- total and permanent disability under the Corporation’s
long-term disability plan.
7. “ Excess Severance
Payment ” - the term “Excess Severance
Payment” shall have the same meaning as the term
“excess parachute payment” defined in
Section 280G(b)(1) of the Code.
8. “ Involuntary
Termination ” - termination of the Executive’s
employment by the Executive following a Change in Control which, in
the reasonable judgment of the Executive, is due to (i) a
change of the Executive’s responsibilities, position
(including status, office, title, reporting relationships or
working conditions), authority or duties (including changes
resulting from the assignment to the Executive of any duties
inconsistent with his positions, duties or responsibilities as in
effect immediately prior to the Change in Control); or (ii) a
reduction in the Executive’s compensation or benefits as in
effect immediately prior to the Change in Control, or (iii) a
forced relocation of the Executive’s primary place of
employment to a place more than fifty (50) miles from the
Executive’s primary place of employment immediately prior to
the Change in Control. Involuntary Termination does not include
Retirement, death or Disability of the Executive.
9. “ Present Value
” - The term “Present Value” shall have the same
meaning as provided in Section 280G(d)(4) of the
Code.
10. “ Severance Payment
” - The term “Severance Payment” shall have the
same meaning as the term “parachute payment” defined in
Section 280G(b)(2) of the Code.
11. “ Reasonable
Compensation ” - The term “Reasonable
Compensation” shall have the same meaning as provided in
Section 280G(b)(4) of the Code.
12. “ Retirement
”- termination of employment at or after the
Executive’s 65 th birthday.
IV. BENEFITS UPON TERMINATION
FOLLOWING A CHANGE IN CONTROL
1. Termination - The
Executive shall be entitled to, and the Company shall pay or
provide to the Executive, the benefits described in Section 2
below if (a) a Change in Control occurs during the term of
this Agreement, and (b) the Executive’s employment is
terminated within thirty (30) months following the Change in
Control either (i) by the Company (other than for
Cause
2
or by reason of the Executive’s
Retirement, death or Disability) or (ii) by the Executive
pursuant to Involuntary Termination; provided, however, that
if:
(a) during the term of this
Agreement there is a public announcement of a proposal for a
transaction that, if consummated, would constitute a Change in
Control or the Board receives and decides to explore an expression
of interest with respect to a transaction which, if consummated,
would lead to a Change in Control (either transaction being
referred to herein as the “Proposed Transaction”);
and
(b) the Executive’s employment
is thereafter terminated by the Company other than for Cause or by
reason of the Executive’s Retirement, death or Disability;
and
(c) the Proposed Transaction is
consummated within one (1) year after the date of termination
of the Executive’s employment.
then, for the purposes of this
Agreement, a Change in Control shall be deemed to have occurred
during the term of this Agreement and the termination of the
Executive’s employment shall be deemed to have occurred
within thirty (30) months following a Change in
Control.
An executive shall also be entitled
to receive the benefits described in Section 2 below if he
terminates employment for any reason during a 30-day period
beginning twelve months after the occurrence of a Change in
Control.
2. Benefits to be Provided -
If the Executive becomes eligible for benefits under Section 1
above, the Company shall pay or provide to the Executive the
benefits set forth in this Section 2.
(a) Salary - The Executive
will continue to receive his current salary (subject to withholding
of all applicable taxes and any amounts referred to in
Section 2(c) below) for a period of thirty (30) months
from his date of termination in the same manner as it was being
paid as of the date of termination; provided ,
however , that the salary payments provided for hereunder
shall be paid in a single lump sum payment, to be paid not later
than thirty (30) days after his termination of employment;
provided further , that the amount of such lump sum payment
shall be determined by taking the salary payments to be made and
discounting them to their Present Value. For purposes hereof, the
Executive’s “current salary” shall be the highest
rate in effect during the six-month period prior to the
Executive’s termination.
(b) Bonuses - The Executive
shall receive payments from the Company for the thirty
(30) months following the month in which this employment is
term
