Blueprint






Exhibit 10.1


 


 







AMENDMENT TO



PARAGON COMMERCIAL BANK



SALARY CONTINUATION AGREEMENT



FOR



MATTHEW C. DAVIS


 


This
AMENDMENT TO PARAGON COMMERCIAL
BANK SALARY CONTINUATION AGREEMENT (this
“Amendment”) is entered into as of this
26th day
of April, 2017, by and between Paragon Commercial Bank, a
North Carolina-chartered
bank (the “Bank”), and Matthew C. Davis, an executive
of the Bank (the “Executive”).


 


WHEREAS, the Bank and the Executive are
parties to two Paragon Commercial Bank Salary Continuation
Agreements, each dated December 29, 2016, (collectively, the
“Agreement”) under which the Bank has agreed to provide
a salary continuation benefit to the Executive, and


 


WHEREAS, TowneBank, the Bank, and
Paragon Commercial Corporation (“Paragon”) have entered into the Agreement and Plan of
Reorganization dated as of April 26, 2017 (the “Merger
Agreement”), under which the Bank will merge with and into
TowneBank, with TowneBank being the surviving corporation (the
“Merger”);


 


WHEREAS, in connection with the Merger,
TowneBank, the Bank and Executive are entering into an Employment
Agreement, dated as of April 26, 2017, conditioned upon
consummation of the Merger, and under which TowneBank is assuming
all of Paragon’s obligations under the
Agreement;


 


WHEREAS, the Merger is a Change in
Control within the meaning of Section 1.5 of the Agreement, and
will result in full vesting of the Executive’s Accrued
Benefit under the Agreement upon consummation of the
Merger;


 


WHEREAS, the parties may amend the
Agreement under Section 8.1 thereof and now wish to do so in
connection with the Merger; and


 


WHEREAS, in accordance with Section 8.5
of the Agreement, the parties intend that this Amendment shall be
binding on and inure to the benefit of TowneBank, upon consummation
of the Merger, as successor of the Bank.


 


NOW THEREFORE, in consideration of these
premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Executive and the Bank hereby
agree as follows.


 


Section 1.17 “Voluntary Termination with Good
Reason” is amended, effective upon consummation of the
Merger and you being employed by Paragon Bank on the effective date
of the Merger, as evidenced by the date and time shown on the
certificate of merger issued by the Virginia State Corporation
Commission effecting the Merger (the “Merger Date”), to
add a new subsection (z) to the end thereof, such that the amended
Section 1.17 reads as follows:


 




 








 






 


 


“Voluntary
Termination with Good Reason” means a voluntary Separation
from Service by the Executive within 24 months after a Change in
Control if the following conditions (x) and (y) are satisfied, but
subject to condition (z):


 


(x)           a
voluntary Separation from Service by the Executive will be
considered a Voluntary Termination for Good Reason if any of the
following occur without the Executive’s advance written
consent –


 

(1)    
a material diminution of the Executive’s base
salary,


 

(2) a material
diminution of the Executive’s authority, duties, or
responsibilities,


 

(3) a material
diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to
report,


 

(4) a material
diminution in the budget over which the Executive retains
authority,


 

(5) a material change
in the geographic location at which the Executive must perform
services for the Bank, or


 

(6) any other action or
inaction that constitutes a material breach by the Bank of the
agreement under which the Executive provides services to the
Bank.


 


(y)           the
Executive must give notice to the Bank of the existence of one or
more of the conditions described in clause (x) within 90 days after
the initial existence of the condition, and the Bank shall have 30
days thereafter to remedy the condition. In addition, the
Executive’s voluntary termination because of the existence of
one or more of the conditions described in clause (x) must occur
within 24 months after the earlier of the initial existence of the
condition or the Change in
Control.

 


(z)           The
Participant and the Bank agree that Participant’s entering
into the Employment Agreement with TowneBank, dated April 26, 2017,
shall constitute advance written consent to any diminution or
change under items (2) through (4) of clause (x) that arises from
Participant’s position, title, supervisor, authorities,
duties, or responsibilities as they exist as of the Merger Date;
provided that the foregoing consent shall not be deemed given for
any subsequent material diminutions or changes occurring after the
Merger Date and not contemplated by the Participant and the Bank as
of the Merger Date.


 




 








 






 


References to Parties. All references to
“Paragon Commercial Bank,”
the “Bank” or to “Paragon Commercial
Corporation” in the Agreement shall be amended to substitute
“TowneBank.”

 


Effectiveness of this Amendment.
Notwithstanding anything in this Amendment to the contrary, in the
event that the Merger Agreement is terminated pursuant to its terms
prior to the Merger Date, this Amendment will expire and be of no
further force or effect on the date of termination of the Merger
Agreement.


 


IN WITNESS WHEREOF, the Executive and a
duly authorized officer of the Bank


have
executed this Amendment as of the date first written
above.


 


 


	EXECUTIVE:

	

 

	

 

	
PARAGON
COMMERCIAL BANK	

 


	 

	

 

	

 

	
 

	

 


	 

	

 

	

 

	
 

	

 


	/s/ Matthew C.
Davis	

 

	

 

	/s/ Robert C.
Hatley	

 


	
Matthew C.
Davis

	

 

	

 

	Robert C.
Hatley	

 


	
Title 

	

 

	

 

	President and Chief
Executive Officer	

 







 


 


 


 


 


 


 


 



[Signature page – Amendment to Paragon Commercial Bank Salary
Continuation Agreement for Matthew C. Davis]