EXHIBIT
10.1
CHANGE OF CONTROL
AGREEMENT
THIS AGREEMENT,
made as of the 31st day of May, 2005, by and between SUMMIT
BANK CORPORATION , a Georgia corporation
(“Summit”), the SUMMIT NATIONAL BANK ,
a national banking association (“the Bank”) (Summit and
the Bank being collectively hereinafter referred to as the
“Corporation”) and THOMAS J. FLOURNOY
, an individual resident of Georgia (“the Executive”)
for the purpose of establishing a severance arrangement between the
Corporation and the Executive in the event of a Change in Control
(as hereinafter defined) of the Corporation.
W I T N E S S E T H
:
WHEREAS, the
board of directors of the Corporation (the “Board”)
recognizes that the Executive’s contribution to the growth
and success of the Corporation has been substantial; and
WHEREAS, the
Executive has rendered valuable service to the Corporation in
various executive capacities; and
WHEREAS, the
Corporation desires to induce the Executive to remain in his
current employment by providing the Executive a measure of
security; and
WHEREAS, the
Corporation desires to continue to have the benefits of the
Executive’s full time and attention to the affairs of the
Corporation without diversion due to concerns about a possible
Change in Control (as hereinafter defined) of the
Corporation;
NOW, THEREFORE,
in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows;
1.
Definitions
. All the terms defined in this
section shall have the meanings given below throughout this
Agreement.
(a) “Base
Annual Salary” shall mean the greater of the
Executive’s annual base salary (i) at the rate in effect on
the Termination Date or (ii) at the highest rate in effect at any
time during the ninety day period prior to a Change in Control, and
shall include all amounts of his/her base salary that are deferred
under any qualified or non-qualified employee benefit plans of the
corporation or any other agreement or arrangement, but shall not
include amounts paid or payable as bonuses.
(b)
“Board” shall mean the Board of Directors of
Summit.
(c)
“Cause” shall mean the termination of the
Executive’s employment as a result of:
(i) any act
that (A) constitutes, on the part of the Executive, fraud,
dishonesty, gross malfeasance of duty, or conduct grossly
inappropriate to the Executive’s office, and (B) is
demonstrably likely to lead to a material injury to the Corporation
or resulted in or was intended to result in direct or indirect gain
to or personal enrichment of the Executive; or
(ii) the
conviction (from which no appeal may be or is timely taken) of the
Executive of a felony; or
(iii) the suspension or
removal of the Executive by federal or state banking regulatory
authorities acting under lawful authority pursuant to provisions of
federal or state law or regulation which may be in effect from time
to time;
provided , however , that in the case of clause
(i) above, such conduct shall not constitute Cause;
(x) unless (A) there shall have been
delivered to the Executive a written notice setting forth with
specificity the reasons that the Board believes that the
Executive’s conduct constitutes the criteria set forth in
clause (i), (B) the Executive shall have been provided the
opportunity to be heard in person by the Board (with the assistance
of the Executive’s counsel if the Executive so desires) and
(C) after such hearing, the termination is evidenced by a
resolution adopted in good faith by two-thirds of the members of
the Board (other than the Executive); or
(y) if such conduct (A) was believed
by the Executive in good faith to have been in or not opposed to
the interests of the Corporation, and (B) was not intended to and
did not result in the direct or indirect gain to or personal
enrichment of the Executive.
(d)
“Change in Control” shall mean the occurrence of
any of the following events:
(i) an
acquisition (other than directly from the Corporation) of any
voting securities of the Corporation ({“Voting
Securities”) by any “Person” (as the term person
is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934 (the “1934 Act”)) immediately
after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the 1934 Act)
of 25% or more of the combined voting power of the
Corporation’s then outstanding Voting Securities;
provided , however , that in determining whether a
Change in Control has occurred, Voting Securities which are
acquired in an acquisition by (1) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the Corporation or
(y) any corporation or other person of which a majority of its
voting power or its equity securities or equity interest is owned
directly or indirectly by the Corporation (a
“Subsidiary”), (2) the Corporation or any subsidiary,
or (3) any Person in connection with a “Non-Control
Transaction” (as hereinafter defined) shall not constitute an
acquisition for purposes for this clause (i).
(ii) The
individuals who, as of the date of this Agreement, are members of
the Board (the “Incumbent Board”) cease for any reason
to constitute at least 80% of the Board; provided ,
however , that if the election, or nomination for election
by the Corporation’s shareholders, of any new director was
approved by a vote of at least 80% of the Incumbent Board, such new
director shall for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided , further ,
however , that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed office as
a result of either an actual or threatened “Election
Contest” (as described in Rule 14a-11 promulgated under the
1934 Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a
“Proxy Contest”) including by reason of any agreement
intending to avoid or settle any Election Contest of Proxy Contest;
or
(iii) Approval by the
shareholders of the Corporation of:
(a)
a merger, consolidation or reorganization involving the
Corporation, unless:
(1)
the shareholders of the Corporation, immediately before such
merger, consolidation or reorganization own, directly or
indirectly, immediately following such a merger, consolidation or
reorganization, at least two-thirds of the combined voting power of
the outstanding voting securities of the corporation resulting from
such merger, consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation or reorganization, and
(2)
the individuals who were members of the Incumbent Board
immediately prior to the execution of the Agreement providing for
such merger, consolidation or reorganization constitute at least
80% members of the board of directors of the Surviving
Corporation.
(A transaction
described in clauses (1) and (2) above shall hereinafter be
referred to as “Non-Control Transaction.”)
(b) A complete
liquidation or dissolution of the Corporation; or
(c) An agreement
for the sale or other disposition of all or substantially all of
the assets of the Corporation to any Person (other than a transfer
to a Subsidiary).
(iv)
Notwithstanding anything contained in this Agreement to the
contrary, if the Executive’s employment is terminated prior
to a Change in Control and the Executive reasonably demonstrates
that such termination (A) was at the request o
