Exhibit 10.5
CHANGE OF CONTROL
AGREEMENT
THIS AGREEMENT
(“Agreement”) dated June 1, 2007, by and between
AMERICAN PATRIOT BANK, a Tennessee banking corporation (the
“Bank”), and Jerry Simmerly
(“Executive”).
W I T N E S S E T
H:
WHEREAS, Executive
has been effective in his service to Bank, and Bank recognizes the
valuable services that Executive has rendered and desires to be
assured that Executive will continue his active participation in
the business of Bank; and
WHEREAS, Executive
is willing to continue to serve Bank but desires assurance that in
the event of any Change of Control (as such term is hereinafter
defined) of the Bank’s holding company, American Patriot
Financial Group, Inc., a Tennessee corporation (the “Holding
Company”) he will continue to have the responsibility and
status he has earned.
NOW, THEREFORE, in
consideration of the promises and the mutual agreements herein
contained, Bank and Executive hereby agree as follows:
1.
In order to protect Executive against the possible consequences of
a Change of Control (as such term is hereinafter defined) of
Holding Company and thereby to induce Executive to continue to
serve as an executive officer of Bank, Bank agrees that if control
of Holding Company is changed, Executive shall be entitled to
receive within ten (10) business days of the Change of Control, a
lump-sum payment in cash in the amount of $1.00 less than three (3)
times the disqualified individual’s base amount of
compensation (Internal Revenue Code Sec. 280G(b)(2)(A)(ii)). The
term “base amount,” referred to in this provision, is
the Employee’s annualized includible compensation for a base
period, consisting of the most recent five tax years ending before
the date on which the ownership or control of the Bank or Holding
Company changed, or the portion of this period during which the
Employee performed personal services for or was an employee of the
Bank (Code Sec. 280G(b)(3) and (d)). “Annualized includible
compensation” for the base period is the average annual
compensation that was payable by the Bank and includible by the
Employee in gross income for the tax years of the base period (Code
Sec. 280G(d)(1)).
2.
Even in the event of termination of Executive’s service to
the Bank, Executive’s benefits hereunder shall be considered
severance pay in consideration of his past service, and pay in
consideration of his continued service from the date hereof, and
his entitlement thereto shall not be governed by any duty to
mitigate his damages by seeking further employment nor offset by
any compensation which he may receive from future employment.
3.
As used herein, the term “Change of Control” shall
mean:
(i)
A shareholder-approved merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Holding Company’s outstanding securities
are transferred to a person or persons different from the persons
holding those securities immediately prior to such
transaction;
(ii)
A sale, transfer, or other disposition of all or substantially all
of the Holding Company’s assets and complete liquidation or
dissolution of the Holding Co
