Document:

Exhibit 10.1

 

Exhibit 10.1

AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT is made and entered into as of the
29th day of August 2007 and amends and restates the Change-in-Control Agreement dated
May 23, 2007 by and between TSB FINANCIAL CORPORATION (the “Company”), a North Carolina
corporation, and John B. Stedman, Jr. (“Employee”), an individual residing in Charlotte, North
Carolina.

Background Statement

     WHEREAS, The Scottish Bank (the “Bank”) is a wholly owned subsidiary of the Company, and
Employee is a valued employee of the Bank.

     WHEREAS, Employee and the Company wish to amend and restate the Original Agreement to assure
compliance with Section 409A of the Internal Revenue Code and to correct minor typographical
errors.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and of other good
and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:

	 	1.	 	Termination following a Change-in-Control. If a Change-in-Control (as
defined in Section 1(iii) hereof) occurs and if, within one year following the
Change-in-Control, the employment of Employee is terminated (x) by the Company or the
Bank other than for Cause or (y) by Employee for Good Reason, Employee’s Compensation
shall continue to be paid, subject to applicable withholding, by the Company for a
period of 12-months following such termination of employment. In lieu of receiving
payment of Compensation for such 12-month period in installments, the Employee may
elect, at any time prior to the earlier to occur of a Change-in-Control or action by
the Board of Directors of the Company with respect to an event which would, upon
consummation, result in a Change-in-Control (which election shall be evidence by
notice filed with the Company), to be paid the present value of any such Compensation
in a lump sum within 30 days of termination of the Employee’s employment under
circumstances entitling such Employee to Compensation hereunder. The calculation of
the amount due shall be made by the independent accounting firm then performing the
Company’s independent audit, and such calculation, including by not limited to the
discount factor used to determine present value, shall be conclusive.
	 
	 	 	 	For purposes of this Agreement, the following terms shall have the meanings
indicated:

 

 

	 	(i)	 	Cause. Termination by the Company or the Bank for “Cause”
shall mean (A) termination on account of willful misconduct of a material
nature by the Employee in connection with performance of his duties as an
employee; (B) use of alcohol or narcotics that affects his ability to perform
his duties as an employee; (C) conviction of a felony or serious misdemeanor
involving moral turpitude; (D) embezzlement or theft from the Company or the
Bank; (E) gross inattention to or dereliction of duty; or (F) performance by
the Employee of any other willful acts which Employee knew or reasonably
should have known would be materially detrimental to the Company or the Bank.
	 
	 	(ii)	 	Good Reason. Termination by the Employee for “Good Reason”
shall mean termination of Employee’s employment by Employee following the
failure of the Company to rectify any of the following changes in Employee’s
employment within 30 days after receipt of notice by the Company from Employee
of such change given within 90 days after the effective date of such change:
(A) a material diminution in Employee’s authority, duties or responsibilities
as in effect immediately preceding the Change-in-Control; (B) a material
diminution in the rate of Employee’s base salary as in effect immediately
preceding the Change-in-Control, (C) a requirement that Employee report to a
corporate officer and not report directly to the Company’s Board of Directors,
(D) a material diminution in the budget over which Employee has authority, or
(E) the relocation of Employee, without Employee’s consent, to a location
outside a 25 mile radius the Company’s principal location immediately
preceding the Change-in-Control.
	 
	 	(iii)	 	Change-in-Control. For purposes of the Agreement,
“Change-in-Control” shall mean (A) the consummation of a merger,
consolidation, share exchange or similar transaction of the Company with any
other corporation as a result of which the holders of the voting capital stock
of the Company as a group would receive less than 50% of the voting capital
stock of the surviving or resulting corporation; (B) the sale or transfer
(other than as security for obligations of the Company) of substantially all
the assets of the Company; (C) in the absence of a prior expression of
approval by the Board of Directors, the acquisition of more than 20% of the
Company’s voting capital stock by any person within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than a person, or group including a person, who beneficially
owned, as of May 23, 2007, more than 5% of the Company’s securities; (D)
during any period of two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Company cease for any
reason to constitute at least a majority thereof unless

 

 

	 	 	 	the election, or the nomination for election by the Company’s
shareholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; or (E) any other change-in-control of the Company
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Exchange Act or
the acquisition of control, within the meaning of Section 2(a)(2) of the
Bank Holding company Act of 1956, as amended, or Section 602 of the Change
in Bank Control Act of 1978, of the Company by any person, company or
other entity.
	 
	 	(iv)	 	Compensation. Employee’s Compensation shall consist of the
following: (A) Employee’s annual base salary, as paid by the Company or the
Bank, in effect immediately preceding the Change-in-Control and (B) the
average of any bonus paid by the Company or the Bank to Employee during the
two most recent fiscal year ending prior to such Change-in-Control pursuant to
any of the Company’s incentive bonus plan.

	 	2.	 	Additional Benefits. Upon termination of Employee’s employment entitling
Employee to Compensation set forth in Section 1 hereof, the Company shall maintain in
full force and effect for the continued benefit of Employee for such 12-month period
health insurance (including coverage for Employee’s dependents to the extent dependent
coverage is provided by the Company for its employees generally) under such plans and
programs in which Employee was entitled to participate immediately prior to the date
of such termination of employment, provided that Employee’s continued participation is
possible under the general terms and provisions of such plans and programs. In the
event that Employee’s participation in any such plan or program is barred, the Company
shall arrange to provide Employee with health insurance benefits for such 12-month
period substantially similar to those which Employee would otherwise have been
entitled to receive under such plans and programs from which his continued
participation is barred. However, in no event will Employee receive from the Company
the health insurance contemplated by this Section 2 if Employee received comparable
insurance from any other source.
	 
	 	3.	 	Limit on Payments. It is the intention of the Company and Employee that no
portion of the payment made under this Agreement, or payments to or for Employee under
any other agreement or plan, be deemed to be an excess parachute payment as defined in
Section 280G of the Internal Revenue Coded of 1986, as amended (the “Code”) or any
successor provision. The Company and Employee agree that the present value of any
payment hereunder and any other payment to or for the benefit of Employee in the
nature of compensation, receipt of which is contingent or

 

 

	 	 	 	a Change-in-Control of the Company, and to which Section 280G of the Code or any
successor provision thereto applies, shall not exceed an amount equal to one dollar
less than the maximum amount that Employee may receive without becoming subject to
the tax imposed by Section 4999 of the Code or any successor provision or which the
Company may pay without loss of deduction under Section 280G of the Code or any
successor provisions. Present value for purposes of this Agreement shall be
calculated in accordance with Section 1274(b)(2) of the Code or any successor
provision. In the event that the provisions of Section 280G and 4999 of the Code
or any successor provisions are repealed without succession, this Section 3 shall
be of no further force or effect.

	 	4.	 	Effect of Agreement. Nothing contained in this Agreement shall confer upon
Employee any rights to continued employment by the Company or the Bank or shall
interfere in any way with the right of the Company or the Bank to terminate his
employment at any time for any reason. The provisions of this Agreement shall not
affect in any way the right or power of the company to change its business structure
or to effect a merger, consolidation, share exchange or similar transaction, or to
dissolve or liquidate, or sell or transfer all or part of its business or assets.
	 
	 	5.	 	Source of Payment. All payments provided for under this Agreement shall be
paid in cash from the general funds of the Company, and no special or separate fund
shall be established, and no other segregation of assets shall be made to assure
payment, except as provided to the contrary in funded benefits plans. Employee shall
have no right, title or interest whatsoever in or to any investments that the Company
may make to aid the Company in meeting its obligations hereunder. Nothing contained
herein, and no action taken pursuant to the provisions hereof, shall create or be
construed to create a trust of any kind or a fiduciary relationship between the
Company and Employee or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.
	 
	 	6.	 	General Provisions.
	 
	 	(i)	 	Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, Employee and the Company and their respective permitted successors and
assigns. Neither this Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries, or legal representatives without the
Company’s prior written consent. As used in the Agreement, “Company” shall mean that
company as defined herein and any successor to its business and/or assets as aforesaid
that executes and delivers the agreement provided for in the Section 6(i) or that

 

 

	 	 	 	otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
	 
	 	(ii)	 	Entire Agreement and Amendment. This Agreement replaces any and all previous
agreements, representations and understandings relating to the same or similar subject
matter which the Employee and the Company may have entered into with the Company in
connection with Employee’s employment by the Bank. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.
	 
	 	(iii)	 	Headings and Gender. The headings of paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
	 
	 	(iv)	 	Governing Law. This agreement has been executed and delivered in the State of
North Carolina, and its validity, interpretation, performance and enforcement shall be
governed by the laws of such state.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day
and year first above stated.

	 	 	 	 	 
	 	TSB FINANCIAL CORPORATION

 	 
	 	By:  	/s/ James H. Barnhardt, Jr.
 	 
	 	 	James H. Barnhardt, Jr., 	 
	 	 	Chairman of the Board of Directors 	 
	 
	 	EMPLOYEE:

 	 
	 	/s/ John B. Stedman, Jr.
 	 
	 	John B. Stedman, Jr.Exhibit 10.2

 

Exhibit 10.2

AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT

     THIS AMENDED AND RESTATED CHANGE-IN-CONTROL AGREEMENT is made and entered into as of the 29th
day of August 2007 and amends and restates the Change-in-Control Agreement dated May 23, 2007 (the
“Original Agreement”) by and between TSB FINANCIAL CORPORATION (the “Company”), a North Carolina
corporation, and R. Allan Schlick (“Employee”), an individual residing in Charlotte, North
Carolina.

Background Statement

     WHEREAS, The Scottish Bank (the “Bank”) is a wholly owned subsidiary of the Company, and
Employee is a valued employee of the Bank.

     WHEREAS, Employee and the Company wish to amend and restate the Original Agreement to modify
the triggers for payment, to assure compliance with Section 409A of the Internal Revenue Code and
to correct minor typographical errors.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and of other good
and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:

	 	1.	 	Termination following a Change-in-Control. If a Change-in-Control (as
defined in Section 1(iii) hereof) occurs, Employee shall be paid, on the date that is
four months after the date of consummation of the Change-in-Control, a lump sum
payment equal to the present value of 12 months of Employee’s Compensation, subject to
applicable withholding; provided, however, that if prior to the four-month anniversary
of the date of consummation of the Change-in-Control, (a) Employee terminates
employment with the Bank or the successor to the Company without Good Reason or (b)
Employee is terminated by the successor to the Company or the Bank for Cause, no
payment shall be due hereunder. If Employee’s employment is terminated by the Company
or the Bank other than for Cause or by Employee for Good Reason within such four-month
period, the lump sum payment shall made within 30 days of termination. The
calculation of the amount due shall be made by the independent accounting firm then
performing the Company’s independent audit, and such calculation, including by not
limited to the discount factor used to determine present value, shall be conclusive.
	 
	 	 	 	For purposes of this Agreement, the following terms shall have the meanings
indicated:

 

 

	 	(i)	 	Cause. Termination by the Company or the Bank for “Cause”
shall mean (A) termination on account of willful misconduct of a material
nature by the Employee in connection with performance of his duties as an
employee; (B) use of alcohol or narcotics that affects his ability to perform
his duties as an employee; (C) conviction of a felony or serious misdemeanor
involving moral turpitude; (D) embezzlement or theft from the Company or the
Bank; (E) gross inattention to or dereliction of duty; or (F) performance by
the Employee of any other willful acts which Employee knew or reasonably
should have known would be materially detrimental to the Company or the Bank.
	 
	 	(ii)	 	Good Reason. Termination by the Employee for “Good Reason”
shall mean termination of Employee’s employment by Employee following the
failure of the Company to rectify any of the following changes in Employee’s
employment within 30 days after receipt of notice by the Company from Employee
of such change given within 90 days after the effective date of such change:
(A) a material diminution in Employee’s authority, duties or responsibilities
as in effect immediately preceding the Change-in-Control; (B) a material
diminution in the rate of Employee’s base salary as in effect immediately
preceding the Change-in-Control, (C) a material diminution in the authority,
duties or responsibilities of the supervisor to whom Employee is required to
report, (D) a material diminution in the budget over which Employee has
authority, or (E) the relocation of Employee, without Employee’s consent, to a
location outside a 25 mile radius the Company’s principal location immediately
preceding the Change-in-Control.
	 
	 	(iii)	 	Change-in-Control. For purposes of the Agreement,
“Change-in-Control” shall mean (A) the consummation of a merger,
consolidation, share exchange or similar transaction of the Company with any
other corporation as a result of which the holders of the voting capital stock
of the Company as a group would receive less than 50% of the voting capital
stock of the surviving or resulting corporation; (B) the sale or transfer
(other than as security for obligations of the Company) of substantially all
the assets of the Company; (C) in the absence of a prior expression of
approval by the Board of Directors, the acquisition of more than 20% of the
Company’s voting capital stock by any person within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than a person, or group including a person, who beneficially
owned, as May 23, 2007, more than 5% of the Company’s securities; (D) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company cease for any reason
to constitute at least a majority thereof unless

 

 

	 	 	 	the election, or the nomination for election by the Company’s
shareholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; or (E) any other change-in-control of the Company
of a nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Exchange Act or
the acquisition of control, within the meaning of Section 2(a)(2) of the
Bank Holding company Act of 1956, as amended, or Section 602 of the Change
in Bank Control Act of 1978, of the Company by any person, company or
other entity.

	 	(iv)	 	Compensation. Employee’s Compensation shall consist of the
following: (A) Employee’s annual base salary, as paid by the Company or the
Bank, in effect immediately preceding the Change-in-Control and (B) the
average of any bonus paid by the Company or the Bank to Employee during the
two most recent fiscal year ending prior to such Change-in-Control pursuant to
any of the Company’s incentive bonus plan.

	 	2.	 	Additional Benefits. Upon Employee’s termination of employment (other than a
termination by the Bank or the Company or its successor for Cause), the Company shall
maintain in full force and effect for the continued benefit of Employee for a 12-month
period health insurance (including coverage for Employee’s dependents to the extent
dependent coverage is provided by the Company for its employees generally) under such
plans and programs in which Employee was entitled to participate immediately prior to
the date of such termination of employment, provided that Employee’s continued
participation is possible under the general terms and provisions of such plans and
programs. In the event that Employee’s participation in any such plan or program is
barred, the Company shall arrange to provide Employee with health insurance benefits
for such 12-month period substantially similar to those which Employee would otherwise
have been entitled to receive under such plans and programs from which his continued
participation is barred. However, in no event will Employee receive from the Company
the health insurance contemplated by this Section 2 if Employee received comparable
insurance from any other source.
	 
	 	3.	 	Limit on Payments. It is the intention of the Company and Employee that no
portion of the payment made under this Agreement, or payments to or for Employee under
any other agreement or plan, be deemed to be an excess parachute payment as defined in
Section 280G of the Internal Revenue Coded of 1986, as amended (the “Code”) or any
successor provision. The Company and Employee agree that the present value of any
payment hereunder and any other payment to or for the benefit of Employee in the
nature of compensation, receipt of which is contingent or

 

 

	 	 	 	a Change-in-Control of the Company, and to which Section 280G of the Code or any
successor provision thereto applies, shall not exceed an amount equal to one dollar
less than the maximum amount that Employee may receive without becoming subject to
the tax imposed by Section 4999 of the Code or any successor provision or which the
Company may pay without loss of deduction under Section 280G of the Code or any
successor provisions. Present value for purposes of this Agreement shall be
calculated in accordance with Section 1274(b)(2) of the Code or any successor
provision. In the event that the provisions of Section 280G and 4999 of the Code
or any successor provisions are repealed without succession, this Section 3 shall
be of no further force or effect.

	 	4.	 	Effect of Agreement. Nothing contained in this Agreement shall confer upon
Employee any rights to continued employment by the Company or the Bank or shall
interfere in any way with the right of the Company or the Bank to terminate his
employment at any time for any reason. The provisions of this Agreement shall not
affect in any way the right or power of the company to change its business structure
or to effect a merger, consolidation, share exchange or similar transaction, or to
dissolve or liquidate, or sell or transfer all or part of its business or assets.
	 
	 	5.	 	Source of Payment. All payments provided for under this Agreement shall be
paid in cash from the general funds of the Company, and no special or separate fund
shall be established, and no other segregation of assets shall be made to assure
payment, except as provided to the contrary in funded benefits plans. Employee shall
have no right, title or interest whatsoever in or to any investments that the Company
may make to aid the Company in meeting its obligations hereunder. Nothing contained
herein, and no action taken pursuant to the provisions hereof, shall create or be
construed to create a trust of any kind or a fiduciary relationship between the
Company and Employee or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.
	 
	 	6.	 	General Provisions.
	 
	 	(i)	 	Binding Effect. This Agreement shall be binding upon, and inure to the
benefit of, Employee and the Company and their respective permitted successors and
assigns. Neither this Agreement nor any right or interest hereunder shall be
assignable by Employee, his beneficiaries, or legal representatives without the
Company’s prior written consent. As used in the Agreement, “Company” shall mean that
company as defined herein and any successor to its business and/or assets as aforesaid
that executes and delivers the agreement provided for in the Section 6(i) or that

 

 

	 	 	 	otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.

	 	(ii)	 	Entire Agreement and Amendment. This Agreement replaces any and all previous
agreements, representations and understandings relating to the same or similar subject
matter which the Employee and the Company may have entered into with the Company in
connection with Employee’s employment by the Bank. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.
	 
	 	(iii)	 	Headings and Gender. The headings of paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
	 
	 	(iv)	 	Governing Law. This agreement has been executed and delivered in the State of
North Carolina, and its validity, interpretation, performance and enforcement shall be
governed by the laws of such state.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day
and year first above stated.

	 	 	 	 	 
	 	TSB FINANCIAL CORPORATION

 	 
	 	By:  	/s/ James H. Barnhardt, Jr.
 	 
	 	 	James H. Barnhardt, Jr., 	 
	 	 	Chairman of the Board of Directors 	 
	 
	 	EMPLOYEE:

 	 
	 	/s/ R. Allan Schlick
 	 
	 	R. Allan Schlick

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