Exhibit 10.11


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) dated as of December 10, 2008, is
made by and between Independence Bancshares, a South Carolina corporation (the “Company”),
Independence National Bank (the “Bank”), a national bank and wholly owned
subsidiary of the Company (the Company and the Bank collectively referred to
herein as the “Employer”), and Lawrence R. Miller, an individual resident of
South Carolina (the “Executive”).  This
Agreement amends and restates that certain existing employment agreement
between the parties dated July 1, 2004.


 


The Employer presently
employs the Executive as its President and Chief Executive Officer.  The Employer recognizes that the Executive’s contribution
to the growth and success of the Employer is substantial.  The Employer desires to provide for the
continued employment of the Executive and to make certain changes in the
Executive’s employment arrangements which the Employer has determined will
reinforce and encourage the continued dedication of the Executive to the
Employer and will promote the best interests of the Employer and the Company’s
shareholders.  The Executive is willing
to terminate his interests and rights under the existing employment agreement
with the Bank and to continue to serve the Employer on the terms and conditions
herein provided.  Certain terms used in
this Agreement are defined in Section 17 hereof.


 


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.             Employment. 
The Employer shall continue to employ the Executive, and the Executive
shall continue to serve the Employer, as President and Chief Executive Officer
of the Bank and the Company upon the terms and conditions set forth
herein.  The Executive shall have such
authority and responsibilities consistent with his position as are set forth in
the Company’s or the Bank’s Bylaws or assigned by the Company’s or the Bank’s
Board of Directors (the “Board”) from time to time.  The Executive shall devote his full business
time, attention, skill and efforts to the performance of his duties hereunder,
except during periods of illness or periods of vacation and leaves of absence
consistent with Bank policy.  The
Executive may devote reasonable periods to service as a director or advisor to
other organizations, to charitable and community activities, and to managing
his personal investments, provided that such activities do not
materially interfere with the performance of his duties hereunder and are not
in conflict or competitive with, or adverse to, the interests of the Company or
the Bank.


 


The Executive is currently serving as a director of each of the Company
and the Bank.  The Company shall nominate
the Executive for election as a director at such times as necessary so that the
Executive will, if elected by shareholders, remain a director of the Company
throughout the term of this Agreement. 
The Executive hereby consents to serving as a director and to being
named as a director of the Company in documents filed with the Securities and
Exchange Commission.  The Board 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 Bank.


 


2.             Term. 
Unless earlier terminated as provided herein, the Executive’s employment
under this Agreement shall commence on the date hereof and be for a term of one
(1) year (“Initial Term”) and shall be extended for additional terms of
one (1) year each (“Additional Term”) unless a Notice of Termination shall
be delivered by Employer to Executive not less than six (6) months prior
to the end of the Initial Term or six (6) months prior to the end of any
Additional Term, if applicable. 
Notwithstanding the foregoing, the term of employment hereunder will end
on the date that the Executive attains the retirement age, if any, specified in
the Bylaws of the Bank or by the Directors of the Bank.


 


3.             Compensation and Benefits.


 


(a)           As of December 10, 2008, the
Employer shall pay the Executive an annual base salary of $160,600, which shall
be paid in accordance with the Employer’s standard payroll procedures.  The Board (or an appropriate committee of the
Board) shall review the Executive’s performance and salary at least annually
and may increase the Executive’s base salary if it determines in its sole
discretion that an additional increase is appropriate.


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(b)           The Executive shall be eligible each
year to receive a cash bonus equaling up to 50% of his annual salary if the
Bank achieves certain performance levels established from time to time by the
Board and based on the previous year’s financial performance.  For purposes of this Agreement, a bonus shall
not be deemed to be earned prior to the date it is actually paid to the
Executive except to the extent that the Employer specifically provides
otherwise in a writing delivered to the Executive.  Any bonus payment made pursuant to this Section 3(b) shall
be made the earlier of (i) seventy days after the previous year end for
which the bonus was earned by the Executive and became a payable of the
Employer or (ii) the first pay period following the Employer’s press
release announcing its previous year’s financial performance.


 


(c)           The Executive shall participate in
the Employer’s long-term equity incentive program and be eligible for the grant
of stock options, restricted stock, and other awards thereunder or under any
similar plan adopted by the Company.  Any
options or similar awards shall be issued to Executive at an exercise price of
not less than the stock’s current fair market value (as determined in
compliance with Treasury Regulation § 1.409A-1(b)(5)(iv)) as of the date of
grant, and the number of shares subject to such grant shall be fixed on the
date of grant.


 


(d)           The Executive shall participate in
all retirement, welfare, health or other benefits plans or programs of the
Employer now or hereafter applicable generally to employees of the Employer or
to a class of employees that includes senior executives of the Employer.


 


(e)           The Employer shall
provide the Executive with long-term disability insurance as well as a term
life insurance policy providing for death benefits totaling $500,000.00 payable
to the Executive’s spouse and heirs and $500,000 payable to the Employer, and
the Executive shall cooperate with the Employer in the securing and maintenance
of such policy.  If the Executive is
taxed by state or federal authorities with respect to the Employer’s payment of
the key man life insurance policy, the Executive’s compensation payable
hereunder shall be increased, on a tax gross-up basis, so as to reimburse the
Executive for the additional tax payable by the Executive as a result of the
Employer’s payment of the key man life insurance premiums taking into account
all taxes payable by the Executive with respect to such tax gross-up payments
hereunder, so that the Executive shall be, after payment of all taxes, in the
same financial position as if no taxes with respect to the key man life
insurance policy had been imposed upon him. 
The Employer shall require and pay the cost of an annual physical for
the Executive.


 


(f)            Employer agrees to provide the
Executive with an automobile either owned or leased by the Company or the Bank
of a make and model appropriate to the Executive’s status.  Employer agrees to provide for reasonable
operating expenses associated with the Executive’s automobile, including, but
not limited to insurance, taxes, and other related automobile expenses, to the
extent such expenses are deductible under Sections 162 or 167 of the Internal
Revenue Code.


 


(g)           In addition, the Employer shall pay
the dues and normal business expenses pertaining to the Executive’s memberships
in the Thornblade Country Club and the Poinsett Club and continue to do so for
so long as the Executive remains the President and Chief Executive Officer of
the Employer and this Agreement remains in force.  Executive agrees that should his employment
by Company terminate for any reason, he will cooperate with the Company and
execute any documents necessary to permit the Company to transfer these
memberships to another representative of the Company.  Any costs or expenses associated with such
transfer, however, shall solely be the responsibility of the Company.


 


(h)           The Employer shall reimburse the
Executive for reasonable travel and other expenses related to the Executive’s
duties, which reimbursements shall be made within sixty days of the Executive’s
incurring such expense.


 


(i)            The Employer shall provide the
Executive with four weeks’ paid vacation per year, which shall be taken in
accordance with any banking rules or regulations governing vacation
leave.  Any payments made by the Employer
to the Executive as compensation for paid vacation leave shall be paid in
accordance with the Employer’s standard payroll procedures.


 


4.             Termination.


 


(a)           The Executive’s employment under this
Agreement may be terminated prior to the end of the Initial Term and any
Additional Term, if applicable, only as follows (each a “Terminating Event”):


 


(i)            upon the death of the Executive;


 


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(ii)           upon the Disability of the Executive
for a period of 180 days;


 


(iii)          by the Employer without Cause upon
delivery of Notice of Termination to the Executive not less than six (6) months
prior to the end of the Initial Term or six (6) months prior to the end of
any Additional Term, if applicable, as specified in Section 2 above.  If the Executive’s employment is terminated
without Cause under this provision, subject to the possibility of a six-month
delay described below in this Section 4(a)(iii), beginning on the first
day of the month following date of the Executive’s termination, and continuing
on the first day of the month for the next twelve (12) months, the Employer
shall pay to the Executive severance compensation in the amount equal to 100%
of his then current monthly base salary, excluding any bonus.  If when the Executive’s employment terminates
he is a specified employee within the meaning of Section 409A of the
Internal Revenue Code, and if the benefits under this Section 4(e) would
be considered deferred compensation under Section 409A, and finally if an
exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) is
not available, the following benefits under this Section 4(e) shall
be paid to the Executive as follows: severance compensation in an amount equal
to seven times his then current monthly base salary will be paid in a single
lump sum on the date that is six months and one day following date of Executive’s
termination; thereafter on the first day of the month for the next five months,
the Employer shall pay to the Executive severance compensation in an amount
equal to 100% of his then current monthly base salary;


 


(iv)          by the Employer for Cause upon
delivery of a Notice of Termination to the Executive.  If the Executive’s employment is terminated
for Cause under this provision, the Executive shall receive only any sums due
him as base salary and/or reimbursement of expenses through the date of such
termination, which shall be paid in accordance with the Employer’s standard
payroll procedures;


 


(v)           by the Executive effective upon the
30th day after delivery of a Notice of
Termination.  If the Executive resigns
under this provision, the Executive shall receive any sums due him as base salary
and/or reimbursement of expenses through the date of such termination, which
shall be paid in accordance with the Employer’s standard payroll procedures;
and


 


(vi)          by the Executive for Good Reason upon
delivery of a Notice of Termination to the Employer within a 90-day period
beginning on the 30th day after the occurrence of a Change in
Control or within a 90-day period beginning on the one year anniversary of the
occurrence of a Change in Control.  If
the Executive’s employment is terminated by the Executive pursuant to this
provision, in addition to other rights and remedies available in law or equity,
the Executive shall also be entitled to the following: (1) the Employer
shall pay the Executive in cash within fifteen days of the date of termination
severance compensation in an amount equal to his then current monthly base
salary multiplied by 24 plus any bonus earned or accrued through the date of
termination (including any amounts awarded for previous years but which were
not yet vested); (2) for a period of two years, the Employer shall at its
expense continue on behalf of the Executive and his dependents and
beneficiaries all medical, life, disability or other benefits provided (a) to
the Executive at any time during the 90-day period prior to the Change in
Control or at any time thereafter or (b) to other similarly situated
executives who continue in the employ of the Employer.  Such coverage and benefits (including
deductibles and costs) shall be no less favorable to the Executive and his
dependents and beneficiaries than the most favorable of such coverages and
benefits referred to above.  The Employer’s
obligation hereunder with respect to the foregoing benefits shall be limited to
the extent that the Executive obtains any such benefits pursuant to a
subsequent employer’s benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined benefit plans is
no less favorable to the Executive than the coverages and benefits required to
be provided hereunder.  This subsection
shall not be interpreted so as to limit any benefits to which the Executive or
his dependents or beneficiaries may be entitled under any of the Employer’s
employee benefit plans, programs, or practices following the Executive’s
termination of employment, including, without limitation, retiree medical and
life insurance benefits; (3) the restrictions on any outstanding incentive
awards (including restricted stock) granted to the Executive under the Company’s
or the Bank’s long-term equity incentive program or any other incentive plan or
arrangement shall lapse and such awards shall become 100% vested, all stock
options and stock appreciation rights granted to the Executive shall become
immediately exercisable and shall become 100% vested, all performance units
granted to the Executive shall become 100% vested; (4) the restrictive
covenants contained in Section 9 shall be void and shall not apply to the
Executive; and (5) the title to any automobile purchased by the Employer
and provided to the Executive in accordance with the Employer’s obligations
under Section 3(d) above shall immediately be transferred to the
Executive, at no cost to the


 


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Executive, or, if the
Employer is providing a monthly allowance to the Executive for the lease of an
automobile, the Employer agrees that it will continue to make all lease
payments, tax payments and related expenses for the automobile until such time
as the lease in effect at the time of any Change in Control shall expire.


 


(b)           If the Executive’s employment is
terminated because of the Executive’s death, the Employer shall pay the
Executive’s estate any sums due him as base salary and/or reimbursement of
expenses through the end of the month during which death occurred in accordance
with the Employer’s standard payroll procedures.  The Employer shall also pay the Executive’s
estate any bonus earned or accrued through the date of death.  Any bonus for previous years which was not
yet paid will be paid pursuant to the terms as set forth in Section 3(b).  Any bonus that is earned in the year of death
will be paid on the earlier of (i) seventy days after the year end in
which the Executive died or (ii) the first pay period following the
Employer’s press release announcing its financial performance for the year in
which the Executive died.  To the extent
that the bonus is performance-based, the amount of the bonus will be calculated
by taking into account the performance of the Company for the entire year and
prorated through the date of the Executive’s death.


 


(c)           During the period of any Disability
leading up to the termination of the Executive’s employment under this
provision, the Employer shall continue to pay the Executive his full base
salary at the rate then in effect and all perquisites and other benefits (other
than any bonus) in accordance with the Employer’s standard payroll procedures
until the Executive becomes eligible for benefits under any long-term
disability plan or insurance program maintained by the Employer; provided that,
the amount of any such payments to the Executive shall be reduced by the sum of
the amounts, if any, payable to the Executive for the same period under any
other disability benefit or pension plan covering the Executive.  Furthermore, the Employer shall pay the
Executive any bonus earned or accrued through the date of Disability.  Any bonus for previous years which was not
yet paid will be paid pursuant to the terms as set forth in Section 3(b).  Any bonus that is earned in the year of
Disability will be paid on the earlier of (i) seventy days after the year
end in which the Executive became Disabled or (ii) the first pay period
following the Employer’s press release announcing its financial performance for
the year in which the Executive became Disabled.


 


(d)           With the exceptions of the provisions
of this Section 4, and the express terms of any benefit plan under which
the Executive is a participant, it is agreed that, upon termination of the
Executive’s employment, the Employer shall have no obligation to the Executive
for, and the Executive waives and relinquishes, any further compensation or
benefits (exclusive of COBRA benefits). 
Unless otherwise stated in this Section 4, the effect of
termination on any outstanding incentive awards, stock options, stock
appreciation rights, performance units, or other incentives shall be governed
by the terms of the applicable benefit or incentive plan and/or the agreements
governing such incentives.  At the time
of termination of employment, and as a condition to the Employer’s obligation
to pay any severance hereunder, the Employer and the Executive shall enter into
a release substantially in the form attached hereto as Exhibit A
acknowledging such remaining obligations and discharging both parties, as well
as the Employer’s officers, directors and employees with respect to their
actions for or on behalf of the Employer, from any other claims or obligations
arising out of or in connection with the Executive’s employment by the
Employer, including the circumstances of such termination.


 


(e)           In the event that the Executive’s
employment is terminated for any reason, the Executive shall (and does hereby)
tender his resignation as a director of the Employer and effective as of the
date of termination.


 


(f)            The parties intend that the
severance payments and other compensation provided for herein are reasonable
compensation for the Executive’s services to the Employer and shall not
constitute “excess parachute payments” within the meaning of Section 280G
of the Internal Revenue Code of 1986 and any regulations thereunder.  In the event that the Employer’s independent
accountants acting as auditors for the Employer on the date of a Change in
Control determine that the payments provided for herein constitute “excess
parachute payments”, then the compensation payable hereunder shall be reduced
to an amount the value of which is $1.00 less than the maximum amount that
could be paid to the Executive without the compensation being treated as “excess
parachute payments” under Section 280G. 
The allocations of the reduction required hereby among the termination
benefits payable to the Executive shall be determined by the Executive.


 


(g)           Notwithstanding any other provision
in this Agreement, if the Executive is determined by the Board, as of the date
of termination of employment with the Employer, to be a “specified employee,”
as such term is defined in Treasury Regulation § 1.409A-1(i), then all
severance payments and other payment, except for other


 


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payments of base salary
at the Employer’s standard payroll procedures, reimbursement of expenses, and
other than as a result of death, that would normally be paid within six months
and one day from the date of termination of employment shall be paid on the
first day of the seventh month following termination of employment.


 


5.             Ownership of Work Product. 
The Employer shall own all Work Product arising during the course of the
Executive’s employment (prior, present or future).  For purposes hereof, “Work Product” shall
mean all intellectual property rights, including all Trade Secrets, U.S. and
international copyrights, patentable inventions, and other intellectual
property rights in any programming, documentation, technology or other work
product that relates to the Employer, its business or its customers and that
the Executive conceives, develops, or delivers to the Employer at any time during
his employment, during or outside normal working hours, in or away from the
facilities of the Employer, and whether or not requested by the Employer.  If the Work Product contains any materials,
programming or intellectual property rights that the Executive conceived or
developed prior to, and independent of, the Executive’s work for the Employer,
the Executive agrees to point out the pre-existing items to the Employer and
the Executive grants the Employer a worldwide, unrestricted, royalty-free right,
including the right to sublicense such items. 
The Executive agrees to take such actions and execute such further
acknowledgments and assignments as the Employer may reasonably request to give
effect to this provision.


 


6.             Protection of Trade Secrets.  The Executive agrees to maintain in strict
confidence and, except as necessary to perform his duties for the Employer, the
Executive 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.


 


7.             Protection of Other Confidential Information.  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 twelve (12) months following
termination of the Executive’s employment. 
“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, education and
administrative manuals; customer and supplier information and purchase
histories; and employee lists.  The
provisions of Sections 6 and 7 above shall also apply to protect Trade Secrets
and Confidential Business Information of third parties provided to the Employer
under an obligation of secrecy.


 


8.             Return of Materials.  The Executive shall surrender to the
Employer, promptly upon its request and in any event upon termination of the
Executive’s employment, all media, documents, notebooks, computer programs,
handbooks, data files, models, samples, price lists, drawings, customer lists,
prospect data, or other material of any nature whatsoever (in tangible or
electronic form) in the Executive’s possession or control, including all copies
thereof, relating to the Employer, its business, or its customers.  Upon the request of the Employer, the
Executive shall certify in writing compliance with the foregoing requirement.


 


9.             Restrictive Covenants.


 


(a)           No Solicitation
of Customers.  During the Executive’s
employment with the Employer and for a period of twelve (12) months thereafter,
the Executive shall not (except on behalf of or with the prior written consent
of the Employer), either directly or indirectly, on the Executive’s own behalf
or in the service or on behalf of others, (i) solicit, divert, or
appropriate to or for a Competing Business, or (ii) attempt to solicit,
divert, or appropriate to or for a Competing Business any person or entity that
is or was a customer of the Employer or any of its Affiliates on the date of
termination and is located in the Territory and with whom the Executive has had
material contact.


 


(b)           No Recruitment of Personnel.  During the Executive’s employment with the
Employer and for a period of twelve (12) months thereafter, the Executive shall
not, either directly or indirectly, on the Executive’s own behalf or in the
service or on behalf of others, (i) solicit, divert or hire away; or (ii) attempt
to solicit, divert, or hire away to any Competing Business located in the
Territory, any employee of or consultant to the Employer or any of


 


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its Affiliates engaged or
experienced in the Business, regardless of whether the employee or consultant
is full-time or temporary, the employment or engagement is pursuant to written
agreement, or the employment is for a determined period or is at will.


 


(c)           Non-Competition Agreement.  During the Executive’s employment with the
Employer and for a period of twelve (12) months thereafter, the Executive shall
not (without the prior written consent of the Employer) compete with the Employer
or any of its Affiliates by, directly or indirectly, forming, serving as an
organizer, director or officer, of, or consultant to, or acquiring or
maintaining more than a one percent (1%) passive investment in, a depository
financial institution or holding company therefor if such depository
institution or holding company has one or more officers or branches located in
the Territory.


 


(d)           If the Executive’s employment is
terminated by the Executive pursuant to Section 4(a)(vi), the restrictive
covenants contained in this Section 9 shall be void and shall not apply to
the Executive.


 


10.           Independent Provisions.  The provisions in each of the above Sections
9(a), 9(b) and 9(c) are independent, and the unenforceability of any
one provision shall not affect the enforceability of any other provision.


 


11.           Successors; Binding Agreement.  The rights and obligations of this Agreement
shall bind and inure to the benefit of the surviving entity in any merger or
consolidation in which the Employer is a party, or any assignee of all or
substantially all of the Employer’s business and properties.  The Executive’s rights and obligations under
this Agreement may not be assigned by him, except that his right to receive
accrued but unpaid compensation, unreimbursed expenses and other rights, if
any, provided under this Agreement, which survive termination of this Agreement
shall pass after death to the personal representatives of his estate.


 


12.           Notice.  For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or sent
by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided,  however,
that all notices to the Employer shall be directed to the attention of the
Employer with a copy to the Secretary of the Employer.  All notices and communications shall be
deemed to have been received on the date of delivery thereof.


 


13.           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of South
Carolina without giving effect to the conflict of laws principles thereof.  Any action brought by any party to this
Agreement shall be brought and maintained in a court of competent jurisdiction
in the State of South Carolina.


 


14.           Non-Waiver.  Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.


 


15.           Enforcement. 
The Executive agrees that in the event of any breach or threatened
breach by the Executive of any covenant contained in Section 9(a), 9(b),
or 9(c) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
would certainly result.  Accordingly, an
award of legal damages, if without other relief, would be inadequate to protect
the Employer.  The Executive therefore
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or any attempted breach of any such covenant, and to obtain any other
available legal, equitable statutory or contractual relief.  Should the Employer have cause to seek such
relief, no bond shall be required from the Employer, and the Executive shall
pay reasonable attorney’s fees and court costs which the Employer may incur to
the extent the Employer prevails in its enforcement action.


 


16.           Saving Clause.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.  If any provision or clause of this Agreement,
or portion thereof, shall be held by any court or other tribunal of competent
jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the
remainder of such provision shall not be thereby affected and shall be given
full effect, without regard to the invalid portion. It is the intention of the
parties that, if any court construes any provision or clause of this Agreement,
or any portion thereof, to be illegal, void, or


 


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unenforceable because of
the duration of such provision or the area or matter covered thereby, such
court shall reduce the duration, area, or matter of such provision, and, in its
reduced form, such provision shall then be enforceable and shall be
enforced.  The Executive and the Employer
herby agree that they will negotiate in good faith to amend this Agreement from
time to time to modify the terms of Sections 9(a), 9(b), and 9(c), the
definition of the term “Territory,” and the definition of the term “Business,”
to reflect changes in the Employer’s business affairs so that the scope of the
limitations placed on the Executive’s activities by Section 9 accomplishes
the parties’ intent in relation to the then current facts and
circumstances.  Any such amendment shall
be effective only when completed in writing and signed by the Executive and the
Employer.


 


17.           Certain Definitions.


 


(a)           “Affiliate” shall mean any
business entity controlled by, controlling or under common control with the
Employer.


 


(b)           “Business” shall mean the
operation of a depository financial institution, including, without limitation,
the solicitation and acceptance of deposits of money and commercial paper, the
solicitation and funding of loans and the provision of other banking services,
and any other related business engaged in by the Employer or any of its
Affiliates as of the date of termination.


 


(c)           “Cause” shall consist of any of
(i) the commission by the Executive of a willful act (including, without
limitation, a dishonest or fraudulent act) or a grossly negligent act, or the
willful or grossly negligent omission to act by the Executive, which is
intended to cause, does cause or is reasonably likely to cause material harm to
the Employer (including harm to its business reputation); (ii) the
indictment of the Executive for the commission or perpetration by the Executive
of any felony or any crime involving dishonesty, moral turpitude or fraud; (iii) the
material breach by the Executive of this Agreement that, if susceptible of
cure, remains uncured ten (10) days following written notice to the
Executive of such breach; (iv) the receipt of any form of notice, written
or informal that any regulatory agency having jurisdiction over the Employer
intends to institute any form of formal or informal (e.g., a memorandum or
understanding which relates to the Executive’s performance) regulatory action
against the Executive or the Employer (provided that the Board determines in
good faith, with the Executive abstaining from participating in the
consideration of and vote on the matter, that the subject matter of such action
involves acts or omissions by or under the supervision of the Executive or that
termination of the Executive would materially advance the Employer’s compliance
with the purpose of the action or would materially assist the Employer in
avoiding or reducing the restrictions or adverse effects to the Employer
related to the regulatory action); (v) the exhibition by the Executive of
a standard of behavior within the scope of his employment that is materially
disruptive to the orderly conduct of the Employer’s business operations
(including, without limitation, substance abuse or sexual misconduct) to a
level which, in the Board’s good faith and reasonable judgment, with the
Executive abstaining from participating in the consideration of and vote on the
matter, is materially detrimental to the Employer’s best interest, that, if
susceptible of cure remains uncured ten (10) days following written notice
to the Executive of such specific inappropriate behavior; or (vi) the
failure of the Executive to devote his full business time and attention to his
employment as provided under this Agreement that, if susceptible of cure,
remains uncured thirty (30) days following written notice to the Executive of
such failure.  In order for the Board of
Directors to make a determination that termination shall be for Cause, the
Board must provide the Executive with notice of the grounds providing the
purported basis for termination and provide the Executive an opportunity to
meet with the Board in person to address the proposed grounds.


 


(d)           “Change in Control” shall mean
shall mean as defined by Treasury Regulation § 1.409A-3(i)(5).


 


(e)           “Competing Business” shall
mean any business that, in whole or in part, is the same or substantially the
same as the Business.


 


(f)            “Disability” or “Disabled”
shall mean as defined by Treasury Regulation § 1.409A-3(i)(4).


 


(g)           “Good Reason” shall mean as
defined by Treasury Regulation § 1.409A-1(n)(2).


 


(h)           “Notice of Termination” shall
mean a written notice of termination from the Employer or the Executive which
specifies an effective date of termination, indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for


 


7

















 


termination of the
Executive’s employment under the provision so indicated.


 


(i)            “Standard payroll procedures”
shall mean payment no less frequently than monthly.


 


(j)            “Terminate,” “terminated,”
“termination,” or “termination of employment” shall mean
separation from service as defined by Treasury Regulation § 1.409A-1(h).


 


(k)           “Territory” shall mean a
radius of thirty miles from (i) the main office of the Employer or (ii) any
branch office of the Employer.


 


18.           Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any understandings and arrangements, oral or written, between the parties
hereto with respect the subject matter hereof.


 


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


 


8

















 


 


IN WITNESS WHEREOF, the
Employer has caused this Agreement to be executed and its seal to be affixed
hereunto by its officers thereunto duly authorized and the Executive has signed
and sealed this Agreement, effective as of the date first above written.


 


	
   

  	
   

  	
   

  	
   

  	
  INDEPENDENCE
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ H. Neel Hipp, Jr.

  	
   

  	
  By: 

  	
  /s/ Charles D.
  Walters

  
	
  Name:

  	
  H. Neel
  Hipp, Jr.

  	
   

  	
  Name: 

  	
  Charles D.
  Walters

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Board Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  INDEPENDENCE
  NATIONAL BANK

  
	
  ATTEST:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ H. Neel Hipp, Jr.

  	
   

  	
  By: 

  	
  /s/ Charles D.
  Walters

  
	
  Name:

  	
  H. Neel
  Hipp, Jr.

  	
   

  	
  Name: 

  	
  Charles D. Walters

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Board Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Lawrence R.
  Miller

  
	
   

  	
   

  	
   

  	
   

  	
  Lawrence R.
  Miller

  



 


9






 












 


Exhibit A


 


Form of Release of Claims


 


SEVERANCE AGREEMENT AND RELEASE


 


This Severance Agreement
and Release (the “Agreement”) is made between Lawrence R. Miller, an individual
resident of South Carolina (“Employee”), and Independence National Bank (the “Bank”).


 


As used in this
Agreement, the term “Employee” shall include the employee’s heirs, executors,
administrators, and assigns, and the term “Bank” shall include the Bank, its
holding company, any other related or affiliated entities, and the current and
former officers, directors, shareholders, employees, and agents of them.


 


On December 10,
2008, the Bank and Employee entered into an Employment Agreement governing the
relationship between the parties.  Section 4
provides that the Bank may terminate the Employment Agreement without
cause.  Section 4 of the Employment
Agreement also provides that Employee shall be entitled to severance pay if the
Employment Agreement is terminated without cause, on the condition that
Employee enter into this release or a substantially similar release.


 


Employee desires to
receive severance pay and the Bank is willing to provide severance pay on the
condition the Employee enter into this Agreement.


 


Now, in consideration for
the mutual promises and covenants set forth herein, and in full and complete
settlement of all matters between Employee and the Bank, the parties agree as
follows:


 


1.                                      Termination Date:  The Employee
agrees that his employment with the Bank terminates as of                                 
(the “Termination Date”).


 


2.                                      Severance Payments: 
Subsequent
to his Termination Date, the Bank shall pay Employee severance pay as noted in
Paragraph 4(a)(iii) of the Employment Agreement, dated December 10,
2008, (the “Severance Payment”), less applicable deductions and withholdings.


 


3.                                      Legal Obligations


 


The parties acknowledge
that pursuant to Section 4(d) of the Employment Agreement, they
agreed that at the time of termination and as a condition of payment of
severance, they would enter into this release acknowledging any remaining
obligations and discharging each other from any other claims or obligations
arising out of or in connection with Employee’s employment by the Bank,
including the circumstances of such termination.


 


With the exceptions of
the provisions of Section 2, and the express terms of any benefit plan
under which the Employee is a participant, it is agreed that the Bank shall
have no obligation to the Employee for, and the Employee waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits).  Unless otherwise stated in
this Section 3, the effect of termination on any outstanding incentive
awards, stock options, stock appreciation rights, performance units, or other
incentives shall be governed by the terms of the applicable benefit or
incentive plan and/or the agreements governing such incentives.


 


Employee acknowledges that the Bank has no prior legal obligations to
make the payments described in Section 2 above which are exchanged for the
promises of Employee set forth in this Agreement.  It is specifically agreed that the payments
described in Section 2 are valuable and sufficient consideration for each
of the promises of Employee set forth in this Agreement and are payments in
addition to anything of value to which Employee is otherwise entitled.


 


4.                                      Waiver and Release:


 


a)                                      Employee unconditionally releases and
discharges the Bank and its predecessors, successors and assigns, its and their
current and former parents, affiliates, subsidiaries, divisions, and joint
ventures (individually and collectively, for purposes of this paragraph, “Bank”)  from any and all causes of action, suits,
damages, claims, 


 


10

















 


proceedings,
controversies, promises, grievances, complaints, charges, liabilities, debts,
taxes, allowances, demands, and remedies of any type that the Employee has ever
had, or may now have, against the Bank, whether asserted or unasserted, whether
known or unknown, concerning any matter occurring up to and including the date
of the signing of this Agreement.


 


b)                                     Employee acknowledges that he is waiving
and releasing, to the full extent permitted by law, all claims against the
Bank, including (but not limited to) all claims arising out of, or related in
any way to, his employment with the Bank or the termination of that employment,
including (but not limited to) any and all breach of contract claims, tort
claims, claims of wrongful discharge, claims for breach of an express or
implied employment contract, defamation claims, claims under the Civil Rights
Act of 1866, which prohibits discrimination on the basis of race or color,
Title VII of the Civil Rights Act of 1964 as amended, which prohibits
discrimination in employment based on race, color, national origin, religion or
sex, the Civil Right Act of 1991, which modifies the 1964 Act by providing
for the right to trial by jury on discrimination claims, the Family and Medical Leave Act of
1993, which provides for unpaid leave for family or medical reasons, the Equal
Pay Act of 1963, which prohibits paying men and women unequal pay for equal
work, the Age Discrimination in Employment Act of 1967, which prohibits age
discrimination in employment, the Americans with Disabilities Act of 1990,
which prohibits discrimination based on disability, the Rehabilitation Act of
1973, which prohibits discrimination on the basis of disability, the Employee
Retirement Income Security Act of 1974, which regulates employee benefit plans,
the Fair Labor Standards Act of 1938, which establishes a national minimum
wage, regulates overtime compensation, and prohibits employment of a minor, the
Older Workers Benefit Protection Act of 1990, which prohibits age
discrimination related to employee benefits, the Occupational Safety and Health
Act of 1970, which governs occupational health and safety in the workplace, the
Sarbanes-Oxley Act of 2002, which establishes standards of conduct
for all U.S. public company boards, management, and public accounting firms, the South Carolina Human Affairs Law, any
and all other applicable local, state and federal non-discrimination statutes,
the South Carolina Payment of Wages Law and all other statutes or regulations
relating to employment, the common law of the State of South Carolina, or any
other state, and any and all claims for attorneys’ fees.


 


This General Release
includes a release of all claims based on the treatment of any payments
hereunder under Section 409A of the Internal Revenue Code (the “Code”)
including specifically any penalties thereunder.


 


This General Release also
includes a release of all compensation and benefit claims, including, without
limitation, claims concerning salary, bonus, and any award(s), grant(s), or
purchase(s) under any equity and incentive compensation plan or program,
and separation pay under any Bank severance plan.


 


c)                                      This Waiver and Release provision ((a) through
(c) of this paragraph) shall be construed to release all claims to the
full extent allowed by law.  If any term
of this paragraph shall be declared unenforceable by a court or other tribunal
of competent jurisdiction, it shall not adversely affect the enforceability of
the remainder of this paragraph.


 


d)                                     The Bank unconditionally releases and
discharges Employee from any and all causes of action, suits, damages, claims,
proceedings, and demands that the Bank has ever had, or may now have, against
Employee, whether asserted or unasserted, whether known or unknown, concerning
any matter occurring up to and including the date of the signing of this
Agreement with the exception of any claims for breach of trust, or any act
which constitutes a felony or crime involving dishonesty, theft, or fraud.


 


5.                                      Restrictive Covenants and
Other Obligations


 


The parties agree that Section 5
— “Ownership of Work Product,” Section 6 — “Protection of Trade Secret,” Section 7
— “Protection of Confidential Information,” Section 8 — “Return of
Materials,” Section 9 — “Restrictive Covenants,” Section 10 — “Independent
Provisions,” Section 15 — “Enforcement,” and Section 16 — “Saving
Clause,” of the Employment Agreement shall remain in full force and effect and
that Employee will perform his obligations under those sections and those
sections of the Employment Agreement are incorporated by reference as if set
forth fully herein.  In the event
Employee breaches any obligation under this Section 5, the Bank’s
obligation to make severance payments to Employee shall terminate immediately
and the Bank shall have no further obligations to Employee.


 


11

















 


6.                                      Duty of
Loyalty/Nondisparagement


 


                                                The parties shall not (except as required
by law) communicate to anyone, whether by word or deed, whether directly or
through any intermediary, and whether expressly or by suggestion or innuendo,
any statement, whether characterized as one of fact or of opinion, that is
intended to cause or that reasonably would be expected to cause any person to
whom it is communicated to have a lowered opinion of the other party.


 


7.                                      Confidentiality Of The
Terms Of This Agreement


 


Employee agrees not to
publicize or disclose the contents of this Agreement, including the amount of
the monetary payments, except (i) to his immediate family; (ii) to
his attorney(s), accountant(s), and/or tax preparer(s); (iii) as may be
required by law; or (iv) as necessary to enforce the terms of this
Agreement.  Employee further agrees that
he will inform anyone to whom the terms of this Agreement are disclosed of the
confidentiality requirements contained herein. 
Notwithstanding the foregoing, the parties agree that where business
needs dictate, Employee may disclose to a third party that he has entered into
an agreement with the Bank, which agreement contains restrictive covenants
including noncompetition and nondisclosure provisions, one or more of which
prohibit him from performing the requested service.


 


Employee recognizes that
the disclosure of any information regarding this Agreement by him, his family,
his attorneys, his accountants or financial advisors, could cause the Bank
irreparable injury and damage, the amount of which would be difficult to
determine.  In the event the Bank
establishes a violation of this paragraph of the Agreement by Employee, his
attorneys, immediate family, accountants, or financial advisors, or others to
whom Employee disclosed information in violation of the terms of this
Agreement.  The Bank shall be entitled to
injunctive relief without the need for posting a bond and shall also be
entitled to recover from Employee the amount of attorneys’ fees and costs
incurred by the Bank in enforcing the provisions of this paragraph.


 


8.                                      Continued Cooperation


 


Employee agrees that he
will cooperate fully with the Bank in the future regarding any matters in which
he was involved during the course of his employment, and in the defense or
prosecution of any claims or actions now in existence or which may be brought
or threatened in the future against or on behalf of the Bank.  Employee’s cooperation in connection with
such matters, actions and claims shall include, without limitation, being
available to meet with the Bank’s officials regarding personnel or commercial
matters in which he was involved; to prepare for any proceeding (including,
without limitation, depositions, consultation, discovery or trial); to provide
affidavits; to assist with any audit, inspection, proceeding or other inquiry;
and to act as a witness in connection with any litigation or other legal
proceeding affecting the Bank.  Employee
further agrees that should he be contacted (directly or indirectly) by any person
or entity adverse to the Bank, he shall within 48 hours notify the then-current
Chairman of the Board of the Bank. 
Employee shall be reimbursed for any reasonable costs and expenses
incurred in connection with providing such cooperation.


 


9.                                      Entire Agreement;
Modification of Agreement


 


Except as otherwise
expressly noted herein, this Agreement constitutes the entire understanding of
the parties and supersedes all prior discussions, understandings, and
agreements of every nature between them relating to the matters addressed
herein.  Accordingly, no representation,
promise, or inducement not included or incorporated by reference in this
Agreement shall be binding upon the parties. 
Employee affirms that the only consideration for the signing of this
Agreement are the terms set forth above and that no other promises or
assurances of any kind have been made to him by the Bank or any other entity or
person as an inducement for him to sign this Agreement.  This Agreement may not be changed orally, but
only by an agreement in writing signed by the parties or their respective
heirs, legal representatives, successors, and assigns.


 


10.                               Partial Invalidity


 


The parties agree that
the provisions of this Agreement and any paragraphs, subsections, sentences, or
provisions thereof shall be deemed severable and that the invalidity or
unenforceability of any paragraph, subsection, sentence, or provision shall not
affect the validity or enforceability of the remainder of the Agreement.


 


12

















 


11.                               Waiver


 


The waiver of the breach
of any term or provision of this Agreement shall not operate as or be construed
to be a waiver of any other subsequent breach of this Agreement.


 


12.                               Successors and Assigns


 


This Agreement shall
inure to and be binding upon the Bank and Employee, their respective heirs,
legal representatives, successors, and assigns.


 


13.                               Governing Law


 


This Agreement shall be
construed in accordance with the laws of the state of South Carolina and any
applicable federal laws.


 


14.                               Headings


 


The headings or titles of
sections and subsections of this Agreement are for convenience and reference
only and do not constitute a part of this Agreement.


 


15.                               Notice


 


Any notice or
communication required or permitted under this Agreement shall be made in
writing and sent by overnight courier (confirmation of receipt required) or
certified mail (postage prepaid and return receipt requested) addressed as
follows:


 


If to Employee:


 


[INSERT]


 


If to the Bank:


 


[INSERT]


 


16.                               Tax Matters


 


The payment of any amount
pursuant to this Agreement shall be subject to all applicable withholding and
payroll taxes and other applicable deductions. Notwithstanding any provision to
the contrary in this Agreement or in any of the Bank’s equity plans (each, a “Plan”),
any payment otherwise required to be made to Employee under any Bank plan on
account of Employee’s “separation from service,” within the meaning of the Section 409A
Rules (as defined below), to the extent such payment (after taking into
account all exclusions applicable to such payment under the Section 409A
Rules) is properly treated as deferred compensation subject to the Section 409A
Rules, shall not be made until the first business day after (i) the
expiration of six (6) months from the date of Employee’s separation from
service, or (ii) if earlier, the date of Employee’s death (the “Delayed
Payment Date”). On the Delayed Payment Date, there shall be paid to Employee
or, if Employee has died, Employee’s estate, in a single cash lump sum, an amount
equal to aggregate amount of the payments delayed pursuant to the preceding
sentence. In the case of each Plan under which Employee is entitled to receive
amounts treated as deferred compensation subject to the Section 409A Rules and
which provides for payment of such amounts in the form of “a series of
installment payments”, as defined in Treas. Reg. §1.409A-2(b)(iii), (A) Employee’s
right to receive such payments shall be treated as a right to receive a series
of separate payments under Treas. Reg. §1.409A-2(b)(iii), and (B) to the
extent such Plan does not already so provide, it is hereby amended to so
provide, with respect to amounts payable to Employee thereunder. For purposes
of this subparagraph, the “Section 409A Rules” shall mean Section 409A
of the Code, the regulations issued thereunder, and all notices, rulings, and
other guidance issued by the Internal Revenue Service interpreting same.
Notwithstanding the foregoing, Employee shall be solely responsible, and the
Bank shall have no liability, for any taxes, acceleration of taxes, interest,
or penalties arising under the Section 409A Rules.


 


13

















 


17.                               Construction


 


Employee and the Bank
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by Employee and the Bank,
and no presumption or burden of proof shall arise favoring or disfavoring
either of them by virtue of the authorship of any of the provisions of this
Agreement.


 


18.                               Representations: 
Employee
acknowledges that:


 


a)                                      He has read this Agreement and
understands its meaning and effect.


 


b)                                     He has knowingly and voluntarily entered
into this Agreement of his own free will.


 


c)                                      By signing this Agreement, Employee has
waived, to the full extent permitted by law, all claims against the Bank based
on any actions taken by the Bank up to the date of the signing of this
Agreement, and the Bank may plead this Agreement as a complete defense to any
claim the Employee may assert.


 


d)                                     He would not otherwise be entitled to the
consideration described in this Agreement, and that the Bank is providing such
consideration in return for Employee’s agreement to be bound by the terms of
this Agreement.


 


e)                                      He has been given up to 21 days to
consider the terms of this Agreement.


 


f)                                        He has seven (7) days, after
Employee has signed the Agreement and it has been received by the Bank, to
revoke it by notifying the Chairman of the Board of his intent to revoke
acceptance.  For such revocation to be
effective, the notice of revocation must be received no later than 5:00 p.m.
on the seventh day after the signed Agreement is received by the Bank.  This Agreement shall not become effective or
enforceable until the revocation period has expired.


 


g)                                     He is not waiving or releasing any rights
or claims that may arise after the date the Employee signs this Agreement.


 


h)                                     HE HAS BEEN ADVISED TO CONSULT WITH AN
ATTORNEY BEFORE SIGNING THIS AGREEMENT.


 


	
  As to Employee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Lawrence R. Miller

  
	
   

  	
   

  	
   

  
	
  As to the Bank:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Chairman of the Board

  



 


14