EXHIBIT 10.3

 

TENNESSEE COMMERCE BANK

AMENDED and RESTATED

EMPLOYMENT AGREEMENT

For H. LAMAR COX

 

This Amended and Restated Employment Agreement (the “Agreement”) is made as of
this 19th day of May, 2009 (the “Effective Date”), by and between Tennessee
Commerce Bank and Tennessee Commerce Bancorp, Inc. (collectively, the
“Employer”), and H. Lamar Cox (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Employer and the Executive were parties to an Employment Agreement
dated December 30, 2008 (the “Prior Employment Agreement”);

 

WHEREAS, the Employer and the Executive wish to amend and restate the Prior
Employment Agreement; and

 

WHEREAS, the Employer desires to continue the services of and employ the
Executive, and the Executive desires to continue to provide services to the
Employer, pursuant to the terms and conditions of this Agreement; and

 

WHEREAS this Amended and Restated Agreement is intended to comply with the
requirements of Internal Revenue Code Section 409A and the Capital Purchase
Program (“CPP”). Accordingly, the intent of the parties hereto is that the
Agreement shall be operated and interpreted consistent with the requirements of
Section 409A and the CPP.

 

NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, the Employer and the Executive agree as follows:

 

1.             Employment. Upon the terms and subject to the conditions
contained in this Agreement, the Executive agrees to provide full-time services
for the Employer during the term of this Agreement, and the Executive hereby
accepts such employment. Executive agrees to devote his best efforts to the
business of the Employer, and shall perform his duties in a diligent,
trustworthy, and business-like manner, all for the purpose of advancing the
business of the Employer. Notwithstanding the above, the Executive may engage in
other business interests or investments which do not materially prevent the
Executive from performing his contemplated services hereunder on behalf of the
Employer and which do not conflict with any duty or obligation Executive owes to
the Employer under this Agreement. The Executive is currently serving as a
director of the Employer. The Employer shall nominate the Executive for election
as a director at such times as necessary so that the Executive will, if elected
by stockholders, remain a director of the Employer throughout the term of this
Agreement. The Executive hereby consents to serving as a director and to being
named as a director of the Employer in documents filed with the Securities and
Exchange Commission. The board of directors of the Employer shall undertake
every lawful effort to ensure that the Executive continues throughout the term
of employment to be elected or reelected as a director of the Employer. The
Executive shall be deemed to have resigned as a director of the Employer
effective immediately after termination of the Executive’s employment under
Section 6 of this Agreement, regardless of whether the Executive submits a
formal, written resignation as director.

 

2.             Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below.

 

“Change in Control” shall mean: a change in the ownership or effective control
of either or both of Tennessee Commerce Bank and Tennessee Commerce
Bancorp, Inc., or in the ownership of a substantial portion of the assets of
either or both of Tennessee Commerce Bank and Tennessee Commerce

 

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Bancorp, Inc., as such change is defined under the default definition in
Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable Treasury
Regulation.

 

“Cause” shall mean (a) fraud; (b) embezzlement; (c) conviction of or plea of
nolo contendere by the Executive of any felony; (d) a material breach of, or the
willful failure or refusal by the Executive to perform and discharge the
Executive’s duties, responsibilities and obligations under this Agreement;
(e) any act of moral turpitude or willful misconduct by the Executive intended
to result in personal enrichment of the Executive at the expense of the
Employer, or any of its affiliates or which has a material adverse impact on the
business or reputation of the Employer or any of its affiliates (such
determination to be made by the Board in its reasonable judgment);
(f) intentional material damage to the property or business of the Employer;
(g) gross negligence; or (h) the ineligibility of the Executive to perform his
duties because of a ruling, directive or other action by any agency of the
United States or any state of the United States having regulatory authority over
the Employer; but in each case only if (1) the Executive has been provided with
written notice of any assertion that there is a basis for termination for cause
which notice shall specify in reasonable detail specific facts regarding any
such assertion, (2) such written notice is provided to the Executive a
reasonable time (and in any event no less than three business days) before the
Board meets to consider any possible termination for cause, (3) at or prior to
the meeting of the Board to consider the matters described in the written
notice, an opportunity is provided to the Executive and his counsel to be heard
before the Board with respect to the matters described in the written notice,
(4) any resolution or other Board action held with respect to any deliberation
regarding or decision to terminate the Executive for cause is duly adopted by a
vote of at least two-thirds of the entire Board (excluding the Executive) at a
meeting of the Board duly called and held, and (5) the Executive is promptly
provided with a copy of the resolution or other corporate action taken with
respect to such termination. No act or failure to act by the Executive shall be
considered willful unless done or omitted to be done by him not in good faith
and without reasonable belief that his action or omission was in the best
interests of the Employer. The unwillingness of the Executive to accept any or
all of a material change in the nature or scope of his position, authorities or
duties, a reduction in his total compensation or benefits, a relocation that he
deems unreasonable in light of his personal circumstances, or other action by or
request of the Employer in respect of his position, authority, or responsibility
that he reasonably deems to be contrary to this Agreement, may not be considered
by the Board to be a failure to perform or misconduct by the Executive.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute, rule or regulation of similar effect.

 

“Confidential Information” shall mean all business and other information
relating to the business of the Employer, including without limitation,
technical or nontechnical data, programs, methods, techniques, processes,
financial data, financial plans, product plans, and lists of actual or potential
customers, which (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other Persons, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy or confidentiality. Such information and
compilations of information shall be contractually subject to protection under
this Agreement whether or not such information constitutes a trade secret and is
separately protectable at law or in equity as a trade secret. Confidential
Information does not include confidential business information which does not
constitute a trade secret under applicable law two years after any expiration or
termination of this Agreement.

 

“Disability” or “Disabled” means the Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months or (ii) is by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
the Employer.

 

“Good Reason” shall mean (i) without the Executive’s express written consent, a
material diminution in authority, duties or responsibilities; (ii) any reduction
by the Employer in the Executive’s

 

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Base Salary; (iii) any failure of the Employer to obtain the assumption of, or
the agreement to perform, this Agreement by any successor as contemplated in
Section 13 hereof; (iv) the Employer materially breaches this Agreement; or
(v) the Employer requiring the Executive to be permanently assigned to a
location other than the current or future headquarters of the Employer, except
for required travel on the Employer business to an extent substantially
consistent with the Executive’s present business travel obligations and as
described under Section 3, or, in the event the Executive consents to any
relocation, the failure by the Employer to pay (or reimburse the Executive) for
all reasonable moving expenses incurred by the Executive relating to a change of
the Executive’s principal residence in connection with such relocation and to
indemnify the Executive against any loss realized on the sale of the Executive’s
principal residence in connection with any such change of residence. Good Reason
shall be deemed to occur only when Executive provides notice to the Employer of
his judgment that a Good Reason event has occurred within 90 days of such
occurrence, and the Employer will have at least 30 days during which it may
remedy the condition.

 

“Person” shall mean any individual, corporation, limited liability Employer,
bank, partnership, joint venture, association, joint-stock Employer, trust,
unincorporated organization or other entity.

 

“Specified Employee” means an employee who at the time of Termination of
Employment is a key employee of the Employer, if any stock of the Employer is
publicly traded on an established securities market or otherwise. For purposes
of this Agreement, an employee is a key employee if the employee meets the
requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in
accordance with the regulations thereunder and disregarding section 416(i)(5))
at any time during the 12-month period ending on December 31 (the
“identification period”). If the employee is a key employee during an
identification period, the employee is treated as a key employee for purposes of
this Agreement during the twelve (12) month period that begins on the first day
of April following the close of the identification period.

 

“Termination of Employment” with the Employer means that the Executive shall
have ceased to be employed by the Employer for reasons other than death,
excepting a leave of absence approved by the Employer. Whether a termination of
employment has occurred is determined based on whether the facts and
circumstances indicate that the Employer and the Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Executive would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding twenty-four (24) month period (or the full period of
services to the Employer if the Executive has been providing services to the
Employer less than twenty-four (24) months).

 

“Voluntary Termination” shall mean the termination by Executive of Executive’s
employment which is not the result of Good Reason.

 

3.             Duties. During the term hereof, the Executive shall hold the
title of Chief Executive Officer of the Employer, and shall report directly to
the Board. The Executive shall have such duties and authority as are typical of
the Chief Executive Officer of a Employer such as the Employer, including,
without limitation, those specific in the Employer’s bylaws. The Executive shall
also promote, by entertainment or otherwise, as and to the extent permitted by
law, the business of the Employer The Executive’s duties may, from time to time,
be changed or modified at the discretion of the Board; provided however, except
with his written consent, Executive shall not be assigned to any position of
lower professional status.

 

4.             Employment Term. Unless earlier terminated as provided herein,
the Employer agrees to employ Executive, and the Executive hereby accepts
employment hereunder, for an initial term of two (2) years commencing on the
Effective Date, subject to the terms of this Agreement. Thereafter, the term of
this Agreement will automatically renew each day after the Effective Date for
one additional day so that the term of the Agreement shall always be two
(2) years unless notified of intent not to renew by either party.

 

5.             Compensation and Benefits. In consideration of Executive’s
services and covenants hereunder, Employer shall pay to Executive the
compensation and benefits described below (which

 

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compensation shall be paid in accordance with the normal compensation practices
of the Employer and shall be subject to such deductions and withholdings as are
required by law or policies of the Employer in effect from time to time,
provided that his salary pursuant to Section 5(a) below shall be payable not
less frequently than monthly):

 

(a)           Base Salary. As of the Effective Date of this Agreement, the
Employer agrees to pay the Executive during the term of this Agreement an
initial Base Salary at the rate of $350,000 per annum, payable in accordance
with Employer’s normal payroll practices with such payroll deductions and
withholdings as are required by law. The Executive’s Base Salary shall be
reviewed no less frequently than annually and may be increased (but not reduced)
at the discretion of the Board (or a committee thereof) and, as so increased,
shall constitute the Executive’s “Base Salary” hereunder.

 

(b)           Annual Incentive Payment. During the term of this Agreement,
provided that Executive is a full-time employee of the Employer on the final day
of the Employer’s fiscal year, in addition to other compensation to be paid
under this Section 5, the Executive shall receive a performance-based annual
incentive payment for the then completed fiscal year of the Employer (the
“Annual Incentive Payment”), which shall be a percentage of Base Salary. The
amount actually awarded and paid to the Executive each fiscal year will be
determined by the Board and will be based on specific performance criteria to be
identified in writing in advance to Executive under a separate communication.
The total amount of the Annual Incentive Bonus to be paid hereunder shall be
calculated by the Employer and paid to the Executive within 60 days of the end
of the Employer’s fiscal year to which the Annual Incentive Bonus applies. The
Employer’s calculation of the Annual Incentive Bonus amount shall be conclusive
and binding absent fraud or manifest and material error.

 

(c)           Vacation. The Executive shall be entitled to paid vacation of five
(5) weeks, or as specified in the Employer’s then current vacation policy, as
amended from time to time if greater.

 

(d)           Reimbursement of Expenses. The Employer shall reimburse the
Executive in accordance with Employer’s expense reimbursement policies for all
reasonable, ordinary and necessary business expenses incurred by the Executive
in the course of his duties conducted on behalf of the Employer. In addition,
the Employer shall pay Executive a reasonable allowance and pay Executive for
the Executive’s annual dues at a local country club, and expenses related to the
Executive’s use of such country club for matters related to the business of the
Employer. The Employer shall also reimburse Executive’s reasonable expenses for
continuing education courses necessary to maintain any certifications or
licenses Executive may hold.

 

(e)           Other Employee Benefits. The Executive shall be entitled to
participate in any employee benefit plans now existing or established hereafter
generally available to employees of the Employer or senior officers of the
Employer, and to all normal perquisites provided to senior officers of the
Employer, provided Executive is otherwise qualified to participate in such plans
or programs. As part of its normal course of business, the Employer may amend or
terminate employee benefits.

 

(f)            Benefits Not in Lieu of Compensation. No benefit or perquisite
provided to the Executive shall be deemed to be in lieu of Base Salary, bonus,
or other compensation, provided that the reporting of any benefits shall be
consistent with the Code.

 

(g)           Insurance. The Employer shall maintain or cause to be maintained
director and officer liability insurance covering the Executive throughout the
term of this Agreement.

 

6.             Termination. Employment with the Employer hereunder may be
terminated as follows:

 

(a)      The Employer. The Employer shall have the right to terminate
Executive’s employment hereunder at any time during the term hereof for Cause,
if the Executive becomes Disabled, upon the Executive’s death, or without Cause.

 

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(i)            Termination for Cause.  If the Employer terminates Executive’s
employment under this Agreement for Cause, the Employer’s obligations under this
Agreement, including any obligations of the Employer under Section 5 hereof,
shall cease as of the date of termination, except that Employer shall pay
Executive any earned but unpaid salary and benefits.

 

(ii)           Disability or Death.  If the Employer terminates Executive’s
employment under this Agreement pursuant to the Executive’s Disability or death,
the Employer’s obligations hereunder, including the obligations under Sections
5(a) above, shall cease on the date of Disability or death, as appropriate.
During the period of incapacity leading up to the termination of the Executive’s
employment under this provision, the Employer shall continue to pay the full
Base Salary at the rate then in effect and all perquisites and other benefits
(other than bonus) until Executive has satisfied the “elimination period”
specified under any disability plan or insurance program maintained by the
Employer, provided that the amount of the Employer’s payments under this
Section 6(a)(ii) to Executive shall be reduced by the sum of the amounts, if
any, payable to Executive for the same period under any Employer sick pay, paid
time off, or other leave program or any disability benefit or pension plan
covering Executive. In no event shall the Employer be required to pay the
Executive Base Salary or any other compensation or benefits twelve (12) months
after the onset of Executive’s Disability. Furthermore, Executive shall receive
any bonus earned or accrued through the date of incapacity, including any
unvested amounts awarded for previous years.

 

(iii)          Termination without Cause.  Subject to Section 6(c) below, if the
Employer terminates Executive’s employment without Cause, Executive shall be
entitled to receive as severance, less applicable taxes and other deductions, a
sum equal to two times the aggregate cash compensation provided in Sections
5(a) and 5(b) being paid at the time of termination (the “Severance Payment”).
For purposes of determining compensation which is not fixed (such as a bonus),
the annual amount of such unfixed compensation shall be deemed to be equal to
the average of such compensation over the three year period immediately prior to
the termination. Subject to Section 6(c) below, the Severance Payment shall be
payable without interest in equal installments, but no less frequently than
monthly, with the final installment due on the second anniversary of the date of
the termination of Executive’s employment in accordance with this
Section 6(a)(iii).

 

Subject to Section 6(c) below, in the event of termination without Cause,
(A) all rights of Executive pursuant to awards of share grants or options
granted by the Employer shall be deemed to have vested and shall be released
from all conditions and restrictions, except for restrictions on transfer
pursuant to the Securities Act of 1933, as amended. Notwithstanding the
foregoing, the Employer shall be under no obligation to provide life insurance
coverage or long-term disability income benefit coverage beyond the period
otherwise available to employees after termination of employment under the terms
and conditions of such plans or programs.

 

(b)           By Executive. Executive shall have the right to terminate his
employment hereunder if there is a Voluntary Termination or there is Good
Reason.

 

(i)            Voluntary Termination.  If Executive terminates his employment
hereunder pursuant to a Voluntary Termination, the Employer’s obligations under
this Agreement, including any obligations of the Employer under Section 5
hereof, shall cease as of the date of termination, except that Employer shall
pay Executive any earned but unpaid salary and benefits.

 

(ii)           Good Reason.  If Executive terminates his employment hereunder
for Good Reason, Executive, subject to Section 14 below, shall be entitled to
receive as severance, less applicable taxes and other deductions, the Severance
Payment as defined in Section 6(a)(iii) above. Subject to Section 6(c) below,
the Severance Payment shall be payable without interest in equal installments,
but no less frequently than monthly, with the final installment due on the
second anniversary of the date of the termination of Executive’s employment in
accordance with

 

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this Section 6(b)(ii). The Employer may prepay any or all of the Severance
Payment without fee or penalty.

 

Subject to Section 6(c) below, in addition, in the event of termination for Good
Reason, (A) all rights of Executive pursuant to awards of share grants or
options granted by the Employer shall be deemed to have vested and shall be
released from all conditions and restrictions, except for restrictions on
transfer pursuant to the Securities Act of 1933, as amended.

 

(c)           Payment of Severance.

 

(i)            Any severance and other benefit due hereunder shall commence
being paid to the Executive within thirty (30) days following the Termination of
Employment. Any severance and other benefit earned hereunder shall be in lieu of
any other claim for compensation whether under this Agreement, or under any wage
continuation law or at common law or otherwise, and any and all claims to
severance or similar payments or benefits which the Executive may otherwise have
or make.

 

(ii)           Notwithstanding anything contained herein to the contrary, in the
event of a violation or breach by Executive of any of the provisions of Sections
8 or 9, below, the Employer, in addition to, and not in limitation of, any other
rights, remedies, or damages available to the Employer at law or in equity,
shall be entitled to suspend, cease, and terminate the Employer’s obligations to
make the Severance Payment, and any other benefits, reimbursements, or rights of
the Executive arising under this Agreement, and to recover from the Executive
the Severance Payment, if any, previously paid to the Executive. In addition, in
the event that any legal challenge to the validity or enforceability of any
provision in Section 8 or 9 is asserted by or on behalf of the Executive, the
Executive shall immediately forfeit the Executive’s right to the Severance
Payment and all other benefits, reimbursements, and rights of Executive arising
under this Agreement. These remedies shall be in addition to, and not in
limitation of, any injunctive relief or other rights, remedies, or damages, to
which the Employer is or may be entitled as a result of this Agreement.

 

(iii)          Notwithstanding anything to the contrary herein, if the Executive
is suspended or temporarily prohibited from participating in the conduct of the
Employer’s affairs by a notice served under section 8(e)(3) or (g)(1) of Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1), the Employer’s
obligations under this Agreement shall be suspended as of the date of service
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Employer may in its discretion (i) pay the Executive all or part
of the compensation withheld while the obligations under this Agreement were
suspended and (ii) reinstate (in whole or in part) any of such obligations which
were suspended. Notwithstanding anything to the contrary herein, if the
Executive is removed or permanently prohibited from participating in the conduct
of the Employer’s affairs by an order issued under section 8 (e)(4) or (g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1), all
obligations of the Executive under this Agreement shall terminate as of the
effective date of the order, but any vested rights of the parties hereto shall
not be affected. Notwithstanding anything to the contrary herein, if the
Employer is in default (as defined in section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of the
date of default, but this Section shall not affect any vested rights of the
parties hereto. Any payments made to the Executive pursuant to this Agreement,
or otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. Section 1828(k) and any regulations promulgated thereunder.

 

7.             Change in Control Benefit. Notwithstanding anything to the
contrary in Section 6, if a Change in Control occurs, and the Executive’s
employment is involuntarily terminated during the period beginning one (1) year
prior to and ending two (2) years following a Change in Control for any reason
other than death, Disability or Cause, the Employer shall pay to the Executive a
benefit as defined in Section 7(a) below in lieu of any other payment or benefit
whatsoever.

 

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(a)           Amount.  The benefit payable to Executive under this Section 7
shall be an amount that is one (1) dollar less than that amount which, when
aggregated with all other “parachute payments,” would create an “excess
parachute payment” as such terms are defined in Section 280G of the Code, as
subsequently amended.

 

(b)           Payment. The amount due under the above Subsection (a) shall be
paid in a lump sum within thirty (30) days of termination of employment or, if
later, the Change in Control.

 

8.             Confidential Information. The Executive recognizes and
acknowledges that he will have access to certain information of the Employer and
its subsidiaries and that such information is confidential and constitutes
valuable, special and unique property of the Employer. The Executive agrees to
maintain in strict confidence and, except as necessary to perform his duties for
the Employer, agrees not to use or disclose any Trade Secrets of the Employer
during or after his employment. “Trade Secret” means information, including a
formula, pattern, compilation, program, device, method, technique, process,
drawing, cost data or customer list, that: (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. In addition, the
Executive agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during his employment and for a period of
36 months following termination of the Executive’s employment (regardless of
whether this Agreement terminates or expires). “Confidential Business
Information” shall mean any internal, non-public information (other than Trade
Secrets already addressed above) concerning the Employer’s financial position
and results of operations (including revenues, assets, net income, etc.); annual
and long-range business plans; product or service plans; marketing plans and
methods; training, educational and administrative manuals; customer and supplier
information and purchase histories; and employee lists. The provisions of this
Section 8 shall also apply to protect Trade Secrets and Confidential Business
Information of third parties provided to the Employer under an obligation of
secrecy.

 

9.             Delivery of Documents upon Termination. At the Employer’s
request, the Executive shall deliver to the Employer or its designee at the
termination of the Executive’s employment all correspondence, memoranda, notes,
records, drawings, sketches, plans, customer lists, product compositions, and
other documents and all copies thereof, made, composed or received by the
Executive, solely or jointly with others, that are in the Executive’s
possession, custody, or control at termination and that are related in any
manner to the past, present, or anticipated business of the Employer.

 

10.           Remedies. The Executive acknowledges that a remedy at law for any
breach or attempted breach of the Executive’s obligations under Sections 8 and 9
may be inadequate, agrees that the Employer may be entitled to specific
performance and injunctive and other equitable remedies in case of any such
breach or attempted breach and further agrees to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such
injunctive or other equitable relief. The Employer shall have the right to
offset against amounts to be paid to the Executive pursuant to the terms hereof
any amounts from time to time owing by the Executive to the Employer. The
termination of the Agreement shall not be deemed to be a waiver by the Employer
of any breach by the Executive of this Agreement or any other obligation owed
the Employer, and notwithstanding such a termination the Executive shall be
liable for all damages attributable to such a breach.

 

11.           Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
pursuant to the Tennessee law in Nashville, Tennessee. Judgment may be entered
on the arbitrator’s award in any court having jurisdiction.

 

12.           Indemnification.  The Executive shall be protected against any and
all legal actions when he is either a party, witness or a participant in any
legal action brought against the Employer or the Executive or a board member. He
will be protected through any programs that cover the outside directors or other
executives of the Employer.

 

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13.           Miscellaneous Provisions.

 

(a)           Successors of the Employer.  The Employer will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Employer, by agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Employer would be required to perform it if no such
succession had taken place. Failure of the Employer to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Employer in
the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive terminated his employment for Good Reason (or, solely
at the Executive’s option, compensation from the Employer in the same amount and
on the same terms as the Executive would be entitled under Section 7 above),
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of termination. As
used in this Agreement, “Employer” as hereinbefore defined shall include any
successor to its business and/or assets as aforesaid which executes and delivers
the agreement provided for in this Section 13 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law.

 

(b)           Executive’s Heirs, etc.  The Executive may not assign the
Executive’s rights or delegate the Executive’s duties or obligations hereunder
without the written consent of the Employer. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would still
be payable to the Executive hereunder as if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive’s designee or, if there be no such
designee, to the Executive’s estate.

 

(c)           Notices. Any notice, request, approval, consent, demand or other
communication shall be effective upon the first to occur of the following:
(i) upon receipt by the party to whom such notice, request, approval, consent,
demand or other communication is being given; or (ii) three (3) business days
after being duly deposited in the United States mail, registered or certified,
return receipt requested, and addressed as follows:

 

Executive:

H. Lamar Cox

 

 

 

 

 

Franklin, TN

 

 

 

 

Employer:

Tennessee Commerce Bank

 

 

 

 

 

The parties hereto may change their respective addresses by notice in writing
given to the other party to this Agreement.

 

(d)           Amendment or Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer as may be
specifically designated by the Board (which shall not include the Executive). No
waiver by either party hereto at any time of any breach by the other party
hereto of or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party that are not
set forth expressly in this Agreement.

 

(e)           Invalid Provisions.  Should any portion of this Agreement be
adjudged or held to be invalid, unenforceable or void, such holding shall not
have the effect of invalidating or voiding the remainder of this Agreement and
the parties hereby agree that the portion so held invalid, unenforceable or

 

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void shall if possible, be deemed amended or reduced in scope, or otherwise be
stricken from this Agreement to the extent required for the purposes of validity
and enforcement thereof.

 

(f)            Survival of the Executive’s Obligations.  The Executive’s
obligations under this Agreement shall survive regardless of whether the
Executive’s employment by the Employer is terminated, voluntarily or
involuntarily, by the Employer or the Executive, with or without Cause.

 

(g)           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

(h)           Governing Law.  This Agreement and any action or proceeding
related to it shall be governed by and construed under the laws of the State of
Tennessee.

 

(i)            Captions and Gender.  The use of Captions and Section headings
herein is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained herein. Similarly, the
use of the masculine gender with respect to pronouns in this Agreement is for
purposes of convenience and includes either sex who may be a signatory.

 

(j)            Effect on Prior Agreements.  This Agreement, and any attachments,
represent the entire understanding between the parties hereto and supersedes in
all respects any other prior Agreement or understanding between the Employer and
the Executive regarding the Executive’s employment.

 

14.           Section 409A.  This Agreement is intended to comply with the
requirements of Section 409A of the Code and regulations promulgated thereunder
(together, “Section 409A”), and shall, to the extent practicable, be construed
in accordance therewith. If any amount payable pursuant to this Agreement
constitutes a “deferral of compensation” subject to Section 409A and if, at the
date of the Executive’s “separation from service,” as such term is defined in
Section 409A, from the Employer (his “Separation from Service”), the Executive
is a “specified employee”, within the meaning of Section 409A, of the Employer
as determined by the Employer from time to time, then each such payment that
would otherwise be payable to the Executive within the six (6) month period
following the Executive’s Separation from Service shall be delayed and paid to
the Executive without interest on the first business day of the seventh month
following the Executive’s Separation from Service. For the avoidance of doubt,
for purposes of this Agreement, any amount which would not be considered a
“deferral of compensation” within the meaning of Section 409A by reason of
Treas. Reg. Sections 1.409A-1(b)(4) or 1.409A-1(b)(9) shall not be considered a
deferral of compensation for which payment shall be delayed in accordance with
the preceding sentence. For purposes of this Agreement, each payment to which
the Executive may be entitled pursuant to this Agreement, including each of the
severance payments, shall be considered a separate payment within the meaning of
Treas. Reg. Section 1.409A-2(b)(2). Notwithstanding the foregoing, to the extent
that this Agreement or any payment or benefit hereunder shall be deemed not to
comply with Section 409A, then neither the Employer, nor any of its principals,
employees, designees or agents, shall be liable to the Executive or to any other
person to the extent such failure to comply results from any actions, decisions
or determinations made in good faith.

 

15.           Compensation Modification.  Notwithstanding anything herein to the
contrary and to the extent consistent with the Capital Purchase Program (“CPP”),
during the time the United States Department of Treasury (“Treasury”) owns any
debt or equity securities of the Employer acquired pursuant to the CPP (the “CPP
Period”), the terms of this Section 15 hereby amend and shall override any
contrary or inconsistent terms contained in this Agreement and any and all other
employment, compensation and benefit agreements, plans and policies with respect
to the Executive that are in existence on the date hereof and that hereafter are
adopted (the “Compensation Arrangements”). This Section 15 shall be construed in
a manner that is consistent with Section 111(b) of the Emergency Economic
Stabilization Act of 2008, as amended by the American Recovery and Reinvestment
Act of 2009 and regulations issued thereunder (“EESA”). The Employer and
Executive further agree that the Employer shall not adopt any new benefit plan
with respect to Executive that does not comply with Section 111(b) of EESA as
implemented by any

 

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guidance or regulation thereunder that has been issued and is in effect as of
the date the Employer issues preferred stock and warrants to the Treasury.  The
Executive acknowledges that the Employer’s Compensation Committee has the sole
and absolute discretion to modify or revoke any bonus or incentive compensation
arrangement that would encourage the Executive to take unnecessary and excessive
risks that would threaten the value of the Employer.

 

a.             Recovery of Incentive Compensation. In the event Executive
receives compensation that was based on financial statements or performance
metric criteria that are determined to be materially inaccurate, Executive shall
repay the Employer upon demand the amount of the bonus or incentive compensation
received by Executive in excess of the amount that would have been paid to
Executive had the inaccurate statements or criteria been accurate.

 

b.             Golden Parachute Limit. In the event of Executive’s termination
of employment, severance payments to the Executive shall not be made to the
extent that the payment would otherwise constitute a “golden parachute” as
defined under Section 111(a) of the EESA and any regulations issued thereunder.

 

c.             Bonus and Incentive Compensation.  If, and to the extent required
by the CPP, Executive will not receive or accrue any bonus, retention award, or
incentive compensation.  This prohibition will not apply, however, to (a) the
payment of long-term restricted stock that (i) does not fully vest during the
CPP Period, (ii) does not have a value greater than one-third of Executive’s
total annual compensation amount and (iii) is subject to such other terms and
conditions as Treasury may determine are in the public interest or (b) any bonus
payment required to be paid under a written employment agreement executed on or
before February 11, 2009 and determined to be valid by Treasury.

 

d.             Waiver. Executive hereby voluntarily waives any claim for any
changes to the Compensation Arrangements that are made or contemplated in this
Section 15.  This waiver includes all claims Executive may have under the laws
of the United States or any state related to the requirements imposed by the
EESA, including, without limitation, a claim for any compensation or other
payments Executive would otherwise receive.

 

e.             Modification - Waivers. No provisions of this Section 15 may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, signed by the Executive and on behalf of the Employer by
such officer as may be specifically designated by the Board of Directors of the
Employer. No waiver by either party hereto at any time of any breach by the
other party hereto of, or in compliance with, any condition or provision of this
Section 15 to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.

 

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IN WITNESS WHEREOF, the Executive and a duly authorized Employer officer have
signed this Agreement to be effective as of the Effective Date.

 

EXECUTIVE

TENNESSEE COMMERCE BANK

 

 

 

 

/s/ H. Lamar Cox

 

/s/ Frank Perez

H. Lamar Cox

 

 

 

 

 

 

TENNESSEE COMMERCE BANCORP, INC.

 

 

 

 

 

/s/ Darrel E. Reifschneider

 

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