Document:

EXHIBIT
10.9

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (this “Agreement”)
is made and entered into as of this 20th day of July, 2004 by and between
TENNESSEE COMMERCE BANK (the “Employer” or “Bank”), and MICHAEL R. SAPP (the “Employee”
or “Executive”).

 

1.             Employment.  The Employer employs the Employee and the Employee accepts
employment upon the terms and conditions of this Agreement.  For the purposes of this Agreement, the
following terms shall have the meanings indicated:

 

(a)           Change in Control.  A “Change in Control” shall be deemed to have
occurred if:

 

(i)            any one person or entity, or more
than one person or entity acting as a group, acquires ownership of stock of the
Bank constituting more than 50% of the total voting power of the Bank;

 

(ii)           a merger or consolidation where the
holders of the voting stock of the Bank immediately prior to the effective date
of such merger or consolidation own less than 50% of the voting stock of the
entity surviving such merger or consolidation; or

 

(iii)          any one person or entity or more than
one person or entity acting as a group, acquires assets from the Bank that have
a total fair market value greater than 50% of the total fair market value of
all of the Bank’s assets immediately before the acquisition or acquisitions;
provided, however, that transfers of assets which otherwise would satisfy the
requirements of this subsection (iii) will not be treated as an acquisition of
such assets if the assets are transferred to:

 

(A)          any entity, 50% or more of the total value
or voting power of which is owned, directly or indirectly by the Bank;

 

(B)           any person or entity, or more than
one person or entity acting as a group, that owns, directly or indirectly, 50%
or more of the total value or voting power of all of the outstanding stock of
the Bank; or

 

(C)           any entity, as least 50% of the total
value or voting power of which is owned, directly or indirectly, by a person
who owns, directly or indirectly, 50% or more of the total value or voting
power of all the outstanding capital stock of the Bank.

 

Notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred solely as a result of any
transaction or reorganization undertaken for the primary purpose of
implementing a change in jurisdiction or charter of the Bank.  For purposes of this Agreement, an “affiliate”
of, or a person(s) “affiliated with” a specified person(s), is a person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person(s) specified.

 

 

(b)           Confidential
Information.  Confidential Information
shall mean any and all information the Employee acquires or to which the
Employee has access during  the Term that
has not been disclosed publicly by the Employer and is not a matter of common
knowledge in the fields of work of the Employer.  The Confidential Information shall include,
but not be limited to, trade secrets, technical data, mailing lists, the names
of suppliers and customers, and the arrangements made from time to time with
suppliers and customers.

 

(c)           Good
Cause.  “Good Cause” shall be deemed to
have occurred if either party has breached this Agreement and the non-breaching
party gives notice in writing, delivered to the breaching party and providing
ten (10) calendar days, from the date of delivery of the notice, within which
the breaching party has the opportunity to cure, if possible, the breach.  In addition, Good Cause for termination shall
exist if Employee engages in any of the following conduct while an employee of
the Employer:  (1) willful and knowing
dishonesty in communication of any kind on any material subject for any purpose
either to the Employer or to any person or entity for or on behalf of the Employer;
(2) use of more than an insubstantial and quantitatively small amount of time
during normal business hours of the Employer for activities not calculated and
reasonably designed to produce profit for the Employer; (3) theft,
embezzlement, false entries on records, misapplication of funds or property,
misappropriation of any asset, any conduct resulting in conversion of any kind,
or any actual or constructive fraud; (4) at any time during or after employment
at the Employer, imparting Confidential Information, whether proprietary or non-proprietary,
to any person other than (i) an authorized employee of the Employer; or (ii) as
required by law, or (iii) as part of a privileged communication to an attorney;
(5) gross neglect of duty, including, but not limited to, failure or refusal to
attend to the duties of employment at the Employer; (6) participating in any
conduct involving moral turpitude or which results in public disgrace
including, but not limited to, conduct for which there is probable cause to
believe that, if criminally prosecuted, such conduct would be adjudged
felonious; (7) counseling, advising, assisting, procuring or aiding any
employee of the Employer in any above-recited conflict of interest; (8)
knowing, believing or having reason to know or believe that an employee of the
Employer has, is, or is about to engage in any above-recited conflict of
interest and not revealing said knowledge or belief and the reason for it to
the Employer; (9) receiving, during the term of this Agreement, compensation,
income, anything of value, or a future interest in or future entitlement to
compensation, income or a thing of value, from any person or entity who or
which is engaged in the same or substantially the same business as the Employer
in the same product, service or geographical market, except stock dividends
and/or capital gains from passive investments in financial institutions by
Employee made in the ordinary course of business and as part of Employee’s
investment portfolio.  However, cause
shall not be deemed to exist merely because of a difference of opinion between
Employee and the Employer, or any employees, directors or officers of either,
as to philosophy of management or other personal beliefs.

 

(d)           Total
Disability.  The phrase “Total Disability”
means the inability of Employee to perform his normal required services
hereunder by reason of Employee’s mental or physical illness or incapacity,
which illness or incapacity is expected to be permanent and continuous during
the remainder of Employee’s life, as so determined by a 

 

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licensed physician selected by Employee and
reasonably satisfactory to the Employer’s Board of Directors.

 

2.             Term.  The term (“Term”) of this Agreement shall begin on the date
of the Agreement (Effective Date) and end on the second anniversary of such
date (the Employment Period).  The
Employment Period shall be a constant rolling period of two years, commencing
on the Effective Date, with the result that, for each day after the Effective
Date the Executive’s term of employment shall be two years.  The Termination Date may be modified upon:

 

(a)           Mutual
Agreement.  The mutual written agreement
of the Employer and the Employee.

 

(b)           Resignation.  The effective date of the Employee’s
resignation.

 

(c)           Death
or Disability.  The death or total
disability of the Employee.

 

(d)           Termination.  The Employer’s termination of the Employee’s
employment, upon written notice to the Employee, for Good Cause, as further
defined above, certified by a vote of the Board of Directors exclusive of the
Employee.

 

(e)           Breach.  The breach by the Employee of any provision
of this Agreement.

 

3.             Compensation.

 

(a)           Base
Salary.  As compensation for the
services to be rendered by Employee during the period of his employment
hereunder, and upon the condition that Employee shall fully and faithfully keep
and perform all of the terms and conditions hereof, Employer shall pay Employee
a salary of $151,800 per year, less income tax withholdings and other normal
employee deductions, plus any additional amounts designated as Base Salary
increases by the Board of Directors of the Employer, which amount is payable in
equal installments (no less frequent than monthly) in accordance with the
payroll practices from time to time adopted by the Employer.

 

(b)           Additional
Compensation.  During the Term of
this Agreement, Employee shall participate in an incentive program providing an
earning potential equivalent of up to 50% of the salary

 

(c)           Benefits.  The Bank shall provide the Employee with
medical, dental, vision and disability insurance (collectively, “Health
Insurance”), as well as a term life insurance policy (“Life Insurance”) with a
death benefit equal to $300,000.  The
Bank will provide the Employee with automobile benefits commensurate with his position
and at least comparable to other employees of the Employer.

 

This Agreement
shall not be deemed abrogated or terminated if the Board of Directors or
stockholders of Employer shall determine to increase the compensation of
Employee for any period of time.

 

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4.             Duties. 
The Employee is engaged as President of the Employer with such duties to
be established by the Board of Directors and/or as specified in the Bylaws of
the employer.

 

5.             Working Facilities. 
The Employee shall have a private office, stenographic help, and such
other facilities and services as are suitable to his position and appropriate
for the performance of his duties.

 

6.             Disclosure of Information. 
The Employee acknowledges that the Confidential Information is a
valuable, special, and unique asset of the Employer’s business.  The Employee will not, during or after the
term of his employment, disclose any Confidential Information to any person,
firm, corporation, association, or other entity for any reason or purpose
whatsoever.  In the event of a breach or
threatened breach by the Employee of the provisions of this paragraph, the
Employer shall be entitled to an injunction restraining the Employee from
disclosing, in whole or in part, the Confidential Information, or from
rendering any services to any person, firm, corporation, association, or other
entity to whom such Confidential Information, in whole or in part, has been
disclosed or is threatened to be disclosed. 
Nothing herein shall be construed as prohibiting the Employer from
pursuing any other remedies available to the Employer for such breach or
threatened breach, including the recovery of damages from the Employee.

 

7.             Expenses. 
The Employee may incur reasonable expenses for promoting the Employer’s
business, including expenses for entertainment, travel, and similar items.  The Employer will reimburse the Employee for
all such expenses upon the Employee’s periodic presentation of an itemized
account of such expenditures.

 

8.             Vacations. 
The Employee shall be entitled each year to a vacation of five (5)
weeks, during which time his compensation shall be paid in full.  A portion of such vacation shall be taken over
a two week consecutive period.

 

9.             Force Majeure and Disability.  If Employer is unable to conduct its business,
or a substantial portion thereof, by virtue of governmental regulation or
order, or by strike, war, fire, earthquake, hurricane, or similar acts of God,
or other calamity (declared or undeclared), or because of other similar or
dissimilar cause beyond control of Employer (all of which events are
hereinafter sometimes referred to as “Force Majeure”), or in the event Employee
suffers a Total Disability, Employer shall, in the event the Force Majeure
and/or Total Disability continue for at least eight aggregate weeks during any
four-month period, have the right to suspend the operation of this Agreement
for the duration of said Force Majeure and/or Total Disability (except for any
benefits payable to Employee under such benefit plans generally available to
all executive employees), and Employer shall, at its option, have the right to
add a period equal to such suspension to the Term hereof.  If the Term shall expire prior to the end of
the Termination Date because of the Employee’s Total Disability, the Employer
shall continue to pay the amounts specified in Section 3 during the Term of
this Agreement, provided however, that any such continued payments shall be
reduced, dollar-for-dollar, by the amount of any payments made to the Employee
pursuant to the Employer-sponsored disability plan, program or arrangement or
pursuant to disability insurance provided by the Employer to the Employee.  If the Employer’s Board of Directors
determines that the Employee, after suffering Total Disability, is unable to
manage his or her affairs, the Employer shall pay the amounts due under this
Section 9 as the

 

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Employee’s duly
appointed guardian, conservator, or other legal representative, instead of the
Employee.

 

10.          Termination With Cause. 
With Good Cause, the Employer may terminate this Agreement at any time
upon written notice to the Employee.  In
such event, the Employee, if requested by the Employer, shall continue to
render his services, and shall be paid his regular compensation up to the date
of termination, but no other payments or benefits shall be paid or vested to
him.

 

11           Change in Control Payment.  In the event that a Change in Control occurs during the term hereof, irrespective of
whether or not the Employee’s employment is terminated by the Bank or any
successor to the Bank, the Bank shall (i) pay the Employee an amount equal to
(w) the product of 2.99 times the sum of the Employee’s expected Base Salary
and Additional Compensation for the calendar year during which the Change in Control occurs (which
expected Base Salary and Additional Compensation shall be in no event less than
that earned by the Employee during the preceding calendar year), plus (x)
provide continued health and life insurance benefits, at the level maintained
by the Bank for the Employee, for the remaining term of the Agreement, and (ii)
grant the Employee the right to purchase the employer-owned or leased
automobile used by the employee as of the effective date of the Change in
Control at the lower of (y) the Trade-In Value (as that term is defined in the
current Kelley Blue Book) or (z) the book value as shown on the leasing
Employer’s books.  Any payments to be
made by the Bank to the Employee pursuant to clause (i) of this Subsection 10
shall be paid in the Bank’s discretion either in a lump sum or in equal
installments over a twenty-four (24) month period beginning on the effective
date of the Change in Control.  If it is
determined by the Bank’s independent auditors that any monetary or other
benefit received or deemed received by the Employee in the event of a Change in
Control is or will become subject to any excise tax under Section 4999 of the
Code or any similar tax under any United States federal, state, or local law,
the Bank shall pay to the Employee, within 30 business days, an amount equal to
the estimated excise tax but not to exceed $100,000.00.

 

12.          Death
During Employment.  If the Term shall
expire prior to the end of the Termination Date because of the Employee’s
death, the Employer shall thereafter make payments equal to 75% of the amount
specified in Section 3(a), (b), and (c), during the Term.  The payments described in this
Section 12 shall be made to the Employee’s spouse if the Employee is
married at the time of the Employee’s death, but if the Employee is not married
at the time of the Employee’s death or if the Employee is married at the time
of the Employee’s death and the Employee’s spouse dies before all the payments
are made under this Section 12, the remaining payments shall be made to
the Employee’s estate.

 

13.          Competition During and After
Term.  Employee agrees that during the Term hereof,
and for a period of one (1) year after the expiration of the Term, he will not,
either separately, jointly, or in association with others, directly or
indirectly, as an agent, employee, owner, partner, stockholder, or otherwise,
allow his name to be used by, or establish, engage in, or become interested in
any business, trade or occupation similar to the business being conducted by
Employer, in any county in any of the States of the United States in which  Employer’s business is presently  being conducted,  as long as Employer, or any person,  firm,  or  corporation

 

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deriving title to
the goodwill of, or shares from it, carries on a like business therein.Notwithstanding
the preceding sentence, Employee shall be allowed to engage in or be interested
in the businesses and activities  enumerated
in Schedule 1 annexed hereto, if any, provided that his interest or involvement
therein does not otherwise violate any other term or provision of this
Agreement other than the preceding sentence of this Section.  Employer and Employee acknowledge that during
the Term of Employee’s employment, Employee will acquire special knowledge
and/or skill that he can effectively utilize in competition with Employer.  Furthermore, although not a term or condition
of this Agreement, Employer and Employee acknowledge that, as of the date
hereof, it is reasonably contemplated that Employee’s services will be utilized
by Employer in executive, managerial, and/or supervisory capacities throughout
the areas in which Employer conducts its business, and in the general operation
of Employer’s business wherever it is being conducted, throughout the United
States.

 

Employee
agrees that the remedy at law for any breach by him of the covenants contained
herein will be inadequate, and that in the event of a violation of the covenants
contained herein, in addition to any and all legal and equitable remedies which
may be available, the said covenants may be enforced by an injunction in a suit
in equity, without the necessity of proving actual damage, and that a temporary
injunction may be granted immediately upon the commencement of any such suit,
and without notice.  The parties hereto
intend that the covenants contained in this Section shall be deemed to be a
series of separate covenants, one for each county of each state where Employer
does business.  If, in any judicial
proceeding, a court shall refuse to enforce any or all of the separate
covenants deemed included in such action, then such unenforceable covenants
shall be deemed eliminated from the provisions hereof for the purposes of such
proceeding to the extent necessary to permit the remaining separate covenants
to be enforced in such proceeding. 
Furthermore, if in any judicial proceeding a court shall refuse to
enforce  any covenant by reason of the
duration or extent thereof, such covenant shall be construed to have only the
maximum duration or extent permitted by law.

 

14.          Intellectual Property.  The Employee also shall disclose fully and
only to the Employer all ideas, methods, plans, developments, improvements, or
patentable inventions, that relate directly or indirectly to the business of
the Employer, that are known, made, or discovered by the Employee at any time
during the Term.  Nothing in this
Section, however, shall be construed as requiring any communication to the
Employer of the idea, method, plan, development, improvement, or invention if
protected by any lawful prohibition against the communication.  All disclosures are to be made promptly after
conception or discovery of the idea, method, plan, development, improvement, or
invention.  Any idea, method, plan,
development, improvement, or invention that the Employee is obligated to
disclose to the Employer under this Section shall be the property of the
Employer.  The Employee shall (a) provide
any and all assistance to the Employer in making any patent applications or
other applications for obtaining exclusive rights in, and (b) do all other
things reasonably necessary to vest in the Employer or its assigns, the ideas,
methods, plans, development, improvements, or inventions.  Nothing herein shall be construed as
prohibiting the Employer from pursuing any other remedies available to the
Employer for such breach or threatened breach, including the recovery of
damages from the Employee.

 

15.          Notices. 
Any notice required or desired to be given under this Agreement shall be
deemed given if in writing sent by certified mail to his residence, in the case
of the Employee, or to its principal office, in the case of the Employer.

 

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16.          Waiver of Breach. 
The waiver by the Employer of a breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee.  No
waiver shall be valid unless in writing and signed by an authorized officer of
the Employer.

 

17.          Assignment. 
The Employee acknowledges that the services to be rendered by him are
unique and personal.  Accordingly, the
Employee may not assign any of his rights or delegate any of his duties or obligations
under this Agreement.  The rights
and  obligations of the Employer under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer.

 

18.          Compliance with Other Agreements.  The Employee represents and warrants that the
execution of this Agreement and the performance of the Employee’s obligations
under this Agreement will not conflict with, result in the breach of any
provision of, cause the termination of, or constitute a default under any Agreement
to which the Employee is a party or by which the Employee is or may be bound.

 

19.          Litigation Expense.  In the event of a default under this
Agreement, the defaulting party shall reimburse the nondefaulting party for all
costs and expenses reasonably incurred by the nondefaulting party in connection
with the default, including without limitation attorney’s fees.  Additionally, in the event a suit or action
if filed to enforce this agreement or with respect to this Agreement, the
prevailing party or parties shall be reimbursed by the other party for all
costs and expenses incurred in connection with the suit or action, including
without limitation reasonable attorney’s fees at the trial level and on appeal.

 

20.          Severability.  In the event any section, subsection,
provision, or clause of this Agreement or any combination thereof is found to
be unenforceable at law, in equity, or under any presently existing other after
enacted legislation, regulation, or order of the United Sates, any state or
subdivision thereof or any municipality, those finding shall not in any way
affect the other sections, subsections, provision, or clauses of this
Agreement, which shall continue in full force and effect, and the unenforceable
provision shall be interpreted in a manner that imposed the maximum restriction
or obligation permitted by applicable law.

 

21.          Entire Agreement. 
This Agreement contains the entire understanding of the parties.  It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

 

22.          Governing Law. 
This Agreement shall be construed and enforced in accordance with the
laws of the State of Tennessee.

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement on

 

July 20,2004.

 

EMPLOYER:

 

TENNESSEE COMMERCE BANK

 

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  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Michael R. Sapp

  	
   

  

 

8EXHIBIT
10.10

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (this “Agreement”)
is made and entered into as of this 20thth day of July, 2004 by and between
TENNESSEE COMMERCE BANK (the “Employer” or “Bank”), and H. LAMAR COX (the “Employee”
or “Executive”).

 

1.                                      Employment.  The Employer employs the Employee and the Employee accepts
employment upon the terms and conditions of this Agreement.  For the purposes of this Agreement, the
following terms shall have the meanings indicated:

 

(a)                                  Change
in Control.  A “Change in Control”
shall be deemed to have occurred if:

 

(i)                                     any
one person or entity, or more than one person or entity acting as a group,
acquires ownership of stock of the Bank constituting more than 50% of the total
voting power of the Bank;

 

(ii)                                  a
merger or consolidation where the holders of the voting stock of the Bank
immediately prior to the effective date of such merger or consolidation own
less than 50% of the voting stock of the entity surviving such merger or
consolidation; or

 

(iii)                               any
one person or entity or more than one person or entity acting as a group,
acquires assets from the Bank that have a total fair market value greater than
50% of the total fair market value of all of the Bank’s assets immediately
before the acquisition or acquisitions; provided, however, that transfers of
assets which otherwise would satisfy the requirements of this subsection (iii)
will not be treated as an acquisition of such assets if the assets are
transferred to:

 

(A)                              any
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly by the Bank;

 

(B)                                any
person or entity, or more than one person or entity acting as a group, that
owns, directly or indirectly, 50% or more of the total value or voting power of
all of the outstanding stock of the Bank; or

 

(C)                                any
entity, as least 50% of the total value or voting power of which is owned,
directly or indirectly, by a person who owns, directly or indirectly, 50% or
more of the total value or voting power of all the outstanding capital stock of
the Bank.

 

Notwithstanding the foregoing, a Change in
Control shall not be deemed to have occurred solely as a result of any
transaction or reorganization undertaken for the primary purpose of
implementing a change in jurisdiction or charter of the Bank.  For purposes of this Agreement, an “affiliate”
of, or a person(s) “affiliated with” a specified person(s), is a person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person(s) specified.

 

 

(b)                                 Confidential Information.  Confidential Information shall mean any and
all information the Employee acquires or to which the Employee has access
during  the Term that has not been
disclosed publicly by the Employer and is not a matter of common knowledge in
the fields of work of the Employer.  The
Confidential Information shall include, but not be limited to, trade secrets,
technical data, mailing lists, the names of suppliers and customers, and the
arrangements made from time to time with suppliers and customers.

 

(c)                                  Good Cause.  “Good Cause” shall be deemed to have occurred
if either party has breached this Agreement and the non-breaching party gives
notice in writing, delivered to the breaching party and providing ten (10)
calendar days, from the date of delivery of the notice, within which the
breaching party has the opportunity to cure, if possible, the breach.  In addition, Good Cause for termination shall
exist if Employee engages in any of the following conduct while an employee of
the Employer:  (1) willful and knowing
dishonesty in communication of any kind on any material subject for any purpose
either to the Employer or to any person or entity for or on behalf of the Employer;
(2) use of more than an insubstantial and quantitatively small amount of time
during normal business hours of the Employer for activities not calculated and
reasonably designed to produce profit for the Employer; (3) theft,
embezzlement, false entries on records, misapplication of funds or property,
misappropriation of any asset, any conduct resulting in conversion of any kind,
or any actual or constructive fraud; (4) at any time during or after employment
at the Employer, imparting Confidential Information, whether proprietary or non-proprietary,
to any person other than (i) an authorized employee of the Employer; or (ii) as
required by law, or (iii) as part of a privileged communication to an attorney;
(5) gross neglect of duty, including, but not limited to, failure or refusal to
attend to the duties of employment at the Employer; (6) participating in any
conduct involving moral turpitude or which results in public disgrace
including, but not limited to, conduct for which there is probable cause to
believe that, if criminally prosecuted, such conduct would be adjudged
felonious; (7) counseling, advising, assisting, procuring or aiding any
employee of the Employer in any above-recited conflict of interest; (8)
knowing, believing or having reason to know or believe that an employee of the
Employer has, is, or is about to engage in any above-recited conflict of
interest and not revealing said knowledge or belief and the reason for it to
the Employer; (9) receiving, during the term of this Agreement, compensation,
income, anything of value, or a future interest in or future entitlement to
compensation, income or a thing of value, from any person or entity who or
which is engaged in the same or substantially the same business as the Employer
in the same product, service or geographical market, except stock dividends
and/or capital gains from passive investments in financial institutions by
Employee made in the ordinary course of business and as part of Employee’s
investment portfolio.  However, cause
shall not be deemed to exist merely because of a difference of opinion between
Employee and the Employer, or any employees, directors or officers of either,
as to philosophy of management or other personal beliefs.

 

(d)                                 Total Disability.  The phrase “Total Disability” means the
inability of Employee to perform his normal required services hereunder by
reason of Employee’s mental or physical illness or incapacity, which illness or
incapacity is expected to be permanent and continuous during the remainder of
Employee’s life, as so determined by a 

 

2

 

licensed physician selected by Employee and
reasonably satisfactory to the Employer’s Board of Directors.

 

2.                                      Term.  The term (“Term”) of this Agreement shall begin on the date
of the Agreement (Effective Date) and end on the second anniversary of such
date (the Employment Period).  The
Employment Period shall be a constant rolling period of two years, commencing
on the Effective Date, with the result that, for each day after the Effective
Date the Executive’s term of employment shall be two years.  The Termination Date may be modified upon:

 

(a)                                  Mutual Agreement.  The mutual written agreement of the Employer
and the Employee.

 

(b)                                 Resignation.  The effective date of the Employee’s
resignation.

 

(c)                                  Death or Disability.  The death or total disability of the
Employee.

 

(d)                                 Termination.  The Employer’s termination of the Employee’s
employment, upon written notice to the Employee, for Good Cause, as further
defined above, certified by a vote of the Board of Directors exclusive of the
Employee.

 

(e)                                  Breach.  The breach by the Employee of any provision
of this Agreement.

 

3.                                      Compensation.

 

(a)                                  Base Salary.  As compensation for the services to be
rendered by Employee during the period of his employment hereunder, and upon
the condition that Employee shall fully and faithfully keep and perform all of
the terms and conditions hereof, Employer shall pay Employee a salary of
$143,750 per year, less income tax withholdings and other normal employee
deductions, plus any additional amounts designated as Base Salary increases by
the Board of Directors of the Employer, which amount is payable in equal
installments (no less frequent than monthly) in accordance with the payroll
practices from time to time adopted by the Employer.

 

(b)                                 Additional Compensation.  During the Term of this Agreement, Employee
shall participate in an incentive program providing an earning potential
equivalent of up to 50% of the salary

 

(c)                                  Benefits.  The Bank shall provide the Employee with
medical, dental, vision and disability insurance (collectively, “Health
Insurance”), as well as a term life insurance policy (“Life Insurance”) with a
death benefit equal to $300,000.  The
Bank will provide the Employee with automobile benefits commensurate with his position
and at least comparable to other employees of the Employer.

 

This Agreement
shall not be deemed abrogated or terminated if the Board of Directors or
stockholders of Employer shall determine to increase the compensation of
Employee for any period of time.

 

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4.                                      Duties. 
The Employee is engaged as Chief Financial Officer of the Employer with
such duties to be established by the Board of Directors and/or as specified in
the Bylaws of the employer.

 

5.                                      Working Facilities. 
The Employee shall have a private office, stenographic help, and such
other facilities and services as are suitable to his position and appropriate
for the performance of his duties.

 

6.                                      Disclosure of Information. 
The Employee acknowledges that the Confidential Information is a
valuable, special, and unique asset of the Employer’s business.  The Employee will not, during or after the
term of his employment, disclose any Confidential Information to any person,
firm, corporation, association, or other entity for any reason or purpose
whatsoever.  In the event of a breach or
threatened breach by the Employee of the provisions of this paragraph, the
Employer shall be entitled to an injunction restraining the Employee from
disclosing, in whole or in part, the Confidential Information, or from
rendering any services to any person, firm, corporation, association, or other
entity to whom such Confidential Information, in whole or in part, has been
disclosed or is threatened to be disclosed. 
Nothing herein shall be construed as prohibiting the Employer from
pursuing any other remedies available to the Employer for such breach or
threatened breach, including the recovery of damages from the Employee.

 

7.                                      Expenses. 
The Employee may incur reasonable expenses for promoting the Employer’s
business, including expenses for entertainment, travel, and similar items.  The Employer will reimburse the Employee for
all such expenses upon the Employee’s periodic presentation of an itemized
account of such expenditures.

 

8.                                      Vacations. 
The Employee shall be entitled each year to a vacation of five (5)
weeks, during which time his compensation shall be paid in full.  A portion of such vacation shall be taken over
a two week consecutive period.

 

9.                                      Force Majeure and Disability. 
If Employer is unable to conduct its business, or a substantial portion
thereof, by virtue of governmental regulation or order, or by strike, war,
fire, earthquake, hurricane, or similar acts of God, or other calamity
(declared or undeclared), or because of other similar or dissimilar cause
beyond control of Employer (all of which events are hereinafter sometimes
referred to as “Force Majeure”), or in the event Employee suffers a Total
Disability, Employer shall, in the event the Force Majeure and/or Total
Disability continue for at least eight aggregate weeks during any four-month
period, have the right to suspend the operation of this Agreement for the
duration of said Force Majeure and/or Total Disability (except for any benefits
payable to Employee under such benefit plans generally available to all
executive employees), and Employer shall, at its option, have the right to add
a period equal to such suspension to the Term hereof.  If the Term shall expire prior to the end of
the Termination Date because of the Employee’s Total Disability, the Employer
shall continue to pay the amounts specified in Section 3 during the Term of
this Agreement, provided however, that any such continued payments shall be
reduced, dollar-for-dollar, by the amount of any payments made to the Employee
pursuant to the Employer-sponsored disability plan, program or arrangement or
pursuant to disability insurance  provided by  the  Employer  to the Employee.  If  the
 Employer’s  Board of  Directors  determines  that the Employee, after 

 

4

 

suffering Total
Disability, is unable to manage his or her affairs, the Employer shall pay the
amounts due under this Section 9 as the Employee’s duly appointed
guardian, conservator, or other legal representative, instead of the Employee.

 

10.                               Termination With Cause. 
With Good Cause, the Employer may terminate this Agreement at any time
upon written notice to the Employee.  In
such event, the Employee, if requested by the Employer, shall continue to
render his services, and shall be paid his regular compensation up to the date
of termination, but no other payments or benefits shall be paid or vested to
him.

 

11                                  Change
in Control Payment.  In the event
that a Change in Control occurs during
the term hereof, irrespective of whether or not the Employee’s employment is
terminated by the Bank or any successor to the Bank, the Bank shall (i) pay the
Employee an amount equal to (w) the product of 2.99 times the sum of the
Employee’s expected Base Salary and Additional Compensation for the calendar
year during which the Change in Control occurs (which expected Base Salary and
Additional Compensation shall be in no event less than that earned by the
Employee during the preceding calendar year), plus (x) provide continued health
and life insurance benefits, at the level maintained by the Bank for the
Employee, for the remaining term of the Agreement, and (ii) grant the Employee
the right to purchase the employer-owned or leased automobile used by the
employee as of the effective date of the Change in Control at the lower of (y)
the Trade-In Value (as that term is defined in the current Kelley Blue Book) or
(z) the book value as shown on the leasing Employer’s books.  Any payments to be made by the Bank to the
Employee pursuant to clause (i) of this Subsection 10 shall be paid in the Bank’s
discretion either in a lump sum or in equal installments over a twenty-four
(24) month period beginning on the effective date of the Change in
Control.  If it is determined by the Bank’s
independent auditors that any monetary or other benefit received or deemed
received by the Employee in the event of a Change in Control is or will become
subject to any excise tax under Section 4999 of the Code or any similar tax under
any United States federal, state, or local law, the Bank shall pay to the
Employee, within 30 business days, an amount equal to the estimated excise tax
but not to exceed $100,000.00.

 

12.                               Death During
Employment.  If the Term shall expire prior to the end of
the Termination Date because of the Employee’s death, the Employer shall
thereafter make payments equal to 75% of the amount specified in Section 3(a),
(b), and (c), during the Term.  The
payments described in this Section 12 shall be made to the Employee’s
spouse if the Employee is married at the time of the Employee’s death, but if
the Employee is not married at the time of the Employee’s death or if the
Employee is married at the time of the Employee’s death and the Employee’s
spouse dies before all the payments are made under this Section 12, the
remaining payments shall be made to the Employee’s estate.

 

13.                               Competition During and After
Term.  Employee agrees that during the Term hereof,
and for a period of one (1) year after the expiration of the Term, he will not,
either separately, jointly, or in association with others, directly or
indirectly, as an agent, employee, owner, partner, stockholder, or otherwise,
allow his name to be used by, or establish, engage in, or become interested in
any business, trade or occupation similar to the business being conducted by
Employer, in any county in any of the States of the United States  in which Employer’s  business is presently  being conducted, as  long as  Employer, or any person, firm,  or corporation 

 

5

 

deriving title to
the goodwill of, or shares from it, carries on a like business therein.  Notwithstanding the preceding sentence,
Employee shall be allowed to engage in or be interested in the businesses and
activities  enumerated in Schedule 1
annexed hereto, if any, provided that his interest or involvement therein does
not otherwise violate any other term or provision of this Agreement other than
the preceding sentence of this Section. 
Employer and Employee acknowledge that during the Term of Employee’s
employment, Employee will acquire special knowledge and/or skill that he can
effectively utilize in competition with Employer.  Furthermore, although not a term or condition
of this Agreement, Employer and Employee acknowledge that, as of the date
hereof, it is reasonably contemplated that Employee’s services will be utilized
by Employer in executive, managerial, and/or supervisory capacities throughout
the areas in which Employer conducts its business, and in the general operation
of Employer’s business wherever it is being conducted, throughout the United
States.

 

Employee
agrees that the remedy at law for any breach by him of the covenants contained
herein will be inadequate, and that in the event of a violation of the
covenants contained herein, in addition to any and all legal and equitable
remedies which may be available, the said covenants may be enforced by an
injunction in a suit in equity, without the necessity of proving actual damage,
and that a temporary injunction may be granted immediately upon the
commencement of any such suit, and without notice.  The parties hereto intend that the covenants
contained in this Section shall be deemed to be a series of separate covenants,
one for each county of each state where Employer does business.  If, in any judicial proceeding, a court shall
refuse to enforce any or all of the separate covenants deemed included in such
action, then such unenforceable covenants shall be deemed eliminated from the
provisions hereof for the purposes of such proceeding to the extent necessary
to permit the remaining separate covenants to be enforced in such
proceeding.  Furthermore, if in any
judicial proceeding a court shall refuse to enforce  any covenant by reason of the duration or
extent thereof, such covenant shall be construed to have only the maximum
duration or extent permitted by law.

 

14.                               Intellectual Property.  The Employee also shall disclose fully and
only to the Employer all ideas, methods, plans, developments, improvements, or
patentable inventions, that relate directly or indirectly to the business of
the Employer, that are known, made, or discovered by the Employee at any time
during the Term.  Nothing in this Section,
however, shall be construed as requiring any communication to the Employer of
the idea, method, plan, development, improvement, or invention if protected by
any lawful prohibition against the communication.  All disclosures are to be made promptly after
conception or discovery of the idea, method, plan, development, improvement, or
invention.  Any idea, method, plan,
development, improvement, or invention that the Employee is obligated to
disclose to the Employer under this Section shall be the property of the
Employer.  The Employee shall (a) provide
any and all assistance to the Employer in making any patent applications or
other applications for obtaining exclusive rights in, and (b) do all other
things reasonably necessary to vest in the Employer or its assigns, the ideas,
methods, plans, development, improvements, or inventions.  Nothing herein shall be construed as
prohibiting the Employer from pursuing any other remedies available to the
Employer for such breach or threatened breach, including the recovery of
damages from the Employee.

 

6

 

15.                               Notices. 
Any notice required or desired to be given under this Agreement shall be
deemed given if in writing sent by certified mail to his residence, in the case
of the Employee, or to its principal office, in the case of the Employer.

 

16.                               Waiver of Breach. 
The waiver by the Employer of a breach of any provision of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee.  No
waiver shall be valid unless in writing and signed by an authorized officer of
the Employer.

 

17.                               Assignment. 
The Employee acknowledges that the services to be rendered by him are
unique and personal.  Accordingly, the
Employee may not assign any of his rights or delegate any of his duties or
obligations under this Agreement.  The
rights and  obligations of the Employer
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the Employer.

 

18.                               Compliance with Other Agreements.  The Employee represents and warrants that the
execution of this Agreement and the performance of the Employee’s obligations
under this Agreement will not conflict with, result in the breach of any
provision of, cause the termination of, or constitute a default under any
Agreement to which the Employee is a party or by which the Employee is or may
be bound.

 

19.                               Litigation Expense.  In the event of a default under this
Agreement, the defaulting party shall reimburse the nondefaulting party for all
costs and expenses reasonably incurred by the nondefaulting party in connection
with the default, including without limitation attorney’s fees.  Additionally, in the event a suit or action
if filed to enforce this agreement or with respect to this Agreement, the
prevailing party or parties shall be reimbursed by the other party for all
costs and expenses incurred in connection with the suit or action, including
without limitation reasonable attorney’s fees at the trial level and on appeal.

 

20.                               Severability.  In the event any section, subsection,
provision, or clause of this Agreement or any combination thereof is found to
be unenforceable at law, in equity, or under any presently existing other after
enacted legislation, regulation, or order of the United Sates, any state or
subdivision thereof or any municipality, those finding shall not in any way
affect the other sections, subsections, provision, or clauses of this
Agreement, which shall continue in full force and effect, and the unenforceable
provision shall be interpreted in a manner that imposed the maximum restriction
or obligation permitted by applicable law.

 

21.                               Entire Agreement. 
This Agreement contains the entire understanding of the parties.  It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.

 

22.                               Governing Law. 
This Agreement shall be construed and enforced in accordance with the
laws of the State of Tennessee.

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement on

 

July 20,2004.

 

7

 

	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  TENNESSEE COMMERCE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  H. Lamar Cox

  	
   

  

 

8

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