Document:

Exhibit 10

Exhibit 10.1

 

EMPLOYMENT

AGREEMENT

 

THIS

AGREEMENT is made as of the 1st day of April, 2002, between NetBank, Inc. (the

“Company”), a Georgia corporation, and Thomas

Lee Cable  (the “Executive”),

a resident of the State of Georgia,

to be effective as of the date described in Section 1.10 hereof.

 

RECITALS:

 

The

Company desires to employ the Executive and the Executive desires to accept

such employment.

 

In consideration of the

above premises and the mutual agreements hereinafter set forth, the parties

hereby agree as follows:

 

1.     Definitions.

Whenever used in this Agreement, the following terms and their

variant forms shall have the meaning set forth below:

 

1.1           “Agreement” shall mean this Agreement and any

Annexes and Exhibits incorporated herein together with any amendments hereto

made in the manner described in this Agreement.

 

1.2           “Affiliate” shall mean any business entity that

controls, is controlled by, or is under common control with, the Company.

 

1.3           “Average Monthly

Compensation” shall mean the quotient determined by dividing (A) the sum of

(i) the Executive’s Base Salary and (ii) Executive’s maximum Incentive

Compensation (as defined in Section 4.2(a)) for the year of termination by (B)

twelve (12).

 

1.4           “Base Salary” shall have the

meaning set forth in Annex A.  

 

1.5           “Business of the Company” shall mean the business

conducted by the Company and its Affiliates, which is currently banking,

residential mortgage lending, commercial lending and leasing and provision of

other financial services.

 

1.6           “Cause” shall mean:

 

1.6.1

       With respect to  termination by the Company,

 

(a) a material breach of the terms of this

Agreement by the Executive (including, without limitation, failure by the

Executive to perform his duties and responsibilities in the manner and to the

extent required under this Agreement, or a breach of any representation or

warranty of the Executive set forth herein); which breach remains uncured after

the expiration of thirty (30) days following the delivery of written notice of

such breach to the Executive by the Company; or

 

(b)

conduct by the Executive that amounts to personal dishonesty, willful

misconduct, breach of fiduciary duty involving personal profit, intentional

failure

 

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to perform stated duties,

willful violation of any law, rule or regulation (other than traffic violations

or similar offenses), or willful violation of any final cease and desist order

applicable to the Executive.

 

1.6.2

       With respect to termination by the

Executive,

 

(a)  a material breach of the terms of this

Agreement by the Company that remains uncured after the expiration of thirty

(30) days following the delivery of written notice of such breach to the

Company by the Executive; or

 

(b)  any requirement by the Company that the

Executive’s services be rendered primarily at a location or locations other

than the Business Location set forth in Annex A.

 

1.7           “Change in Control” has the meaning set forth in

Annex B attached hereto.

 

1.8           “Permanent Disability” shall

mean the total inability of the Executive to perform his duties under this

Agreement for a period of ninety (90) consecutive days as certified by a

physician chosen by the Company and reasonably acceptable to the Executive;

provided, however, if the Executive is  covered

by a disability insurance policy, the term “Permanent Disability” shall have

the meaning set forth in such policy.

 

1.9           “Proprietary

Information” shall mean:

 

(a) Information related to the Company or any

Affiliate,

 

(i)

which derives economic value, actual or potential, from not being generally

known to or readily ascertainable by other persons who can obtain economic

value from its disclosure or use; and

 

(ii)

which is the subject of efforts that are reasonable under the circumstances to  maintain its secrecy;

and              -

 

(b)

All tangible reproductions or embodiments of such information.

 

Assuming

the criteria in (a)(i) and (a)(ii) above are satisfied, Proprietary Information

includes, but is not limited to, technical and non-technical data related to

the compilations, programs, methods, techniques, finances, actual or potential

customers and suppliers, existing and future products, and employees of the

Company or its Affiliates.  Proprietary

Information also includes information which has been disclosed to the Company

or its Affiliates by a third party and which the Company or any Affiliate is

obligated to treat as confidential.

 

1.10         “Term” means the period commencing on the date

hereof and ending on the first anniversary of such date.

 

2

 

2.  Duties.

 

2.1           The Executive is employed in the

position set forth in Annex A and, subject to the direction of the Company,

shall perform and discharge well and faithfully the duties which may be

assigned to him from time to time by the Company in connection with the conduct

of its business.  The Executive may be

assigned duties that may be primarily concentrated in one or more direct or

indirect subsidiaries of the Company.

 

2.2           In addition to the duties and

responsibilities specifically assigned to the Executive pursuant to Section 2.1

hereof, the Executive shall: (a) devote substantially all of his time, energy

and skill during regular business hours to the performance of the duties of his

employment (reasonable vacations and reasonable absences due to illness

excepted), and faithfully and industriously perform such duties; (b) diligently

follow and implement all management policies and decisions communicated to him

by the Company; and (c) timely prepare all reports and accounting as may be

requested of the Executive.

 

2.3           The Executive shall devote

substantially his entire business time, attention and energies to the Business

of the Company and shall not during the term of this Agreement be engaged

(whether or not during normal business hours) in any other business or

professional activity which is competitive in nature; or interferes with his

ability to perform his duties fully; or which promotes an activity inconsistent

with the nature or status of the Company, whether or not such activity is

pursued for gain, profit or other pecuniary advantage; but this shall not be

construed as preventing the Executive from (a) investing his personal assets in

businesses which (subject to item (b) below) are not in competition with the

Business of the Company and which will not require any services on the part of

the Executive in their operation or affairs and in which his participation is

solely that of an investor, (b) purchasing securities in any corporation whose

securities are regularly traded provided that such purchase shall not result in

his collectively owning beneficially at any time five percent (5%) or more of

the equity securities of any business in competition with the Business of the

Company, and (c) participating in civic and professional affairs and

organizations and conferences, preparing or publishing papers or books or

teaching so long as such activity does not materially interfere with the

performance of his duties hereunder.

 

3.  Term and Termination.

 

3.1           Term. This Agreement shall

remain in effect for the Term.  However,

notwithstanding the provisions of Section 1.10, this Agreement shall terminate

upon the death or Permanent Disability of Executive.

 

3.2           Termination. 

During the Term, the employment of the Executive under this Agreement

may  be terminated only as follows:

 

3.2.1  By the Company:

 

(a)  For Cause, with no prior notice except as

provided in Section 1.6.1; or

 

(b) Without Cause at any time, provided that the Company shall give the

Executive thirty (30) days prior written notice of its intent to terminate.

 

3

 

3.2.2  By the Executive:

 

(a)  For Cause, with no prior notice except as

provided in Section 1.6.2; or

 

(b) Without Cause, provided that the Executive shall give the Company

thirty (30) days prior written notice of his intent to terminate.

 

3.2.3  By the Executive following a Change in

Control of the Company, provided that the Executive shall give written notice

to the Company of his  intention to

terminate this Agreement and terminates employment prior to the expiration of

the Term.

 

3.2.4  At any time upon mutual, written agreement

of the parties.

 

3.3           Effect of Termination.  The effect of termination of the employment

of the  Executive pursuant to

Section 3.2 shall be as set forth in this Section 3.3.

 

3.3.1  In the event of termination by the Company:

 

(a)  For Cause, pursuant to Section 3.2.1(a), the

Company shall have no further obligation to the Executive, except for the payment

of any amounts due and owing under Section 4 on the effective date of

termination.

 

(b) Without Cause, pursuant to Section 3.2.1(b), the Company shall be

required to meet its obligations to the Executive under Section 3.4 below.

 

3.3.2  In the event of termination by the

Executive:

 

(a)  For Cause, pursuant to

Section 3.2.2(a), the Company shall be required to meet its obligations to the

Executive under Section 3.4 below.

 

(b)

Without Cause, pursuant to  Section

3.2.2(b), the Company shall have  no

further obligation to the Executive, except for the payment of

any amounts due and owing under Section 4 on the effective date of termination.

 

3.3.3  In the event of termination by the Executive

in connection with a Change in Control pursuant to Section 3.2.3, the Company

shall be required to meet its obligations to the Executive under Section 3.4

below.

 

3.3.4  In the event of termination upon mutual

agreement of the parties pursuant to Section 3.2.4, the Company shall have no

further obligation to the Executive except for the payment of any amounts due

and owing under Section 4.1 on the effective date of termination unless

otherwise set forth in the written agreement.

 

3.3.5  Notwithstanding anything in this Section 3.3

to the contrary, following any termination of the Executive’s employment, the

Executive shall be entitled to receive

 

4

 

benefits pursuant to the

employee benefit plans in which the Executive participated during his

employment with the Company in accordance with the terms of such plans.

 

3.4           Termination Payments. In the

event Executive’s employment is terminated under this Agreement prior to the

expiration of the Term pursuant to Section 3.3.1(b), Section 3.3.2(a), or

Section 3.3.3, the Company shall pay to the Executive as severance pay and

liquidated damages a lump sum amount equal to the product of the (a) Average

Monthly Compensation multiplied by (b) twelve (12), which amount shall in lieu

of any other severance benefits that the Executive might otherwise have been

entitled to under any other plan, practice, arrangement or agreement of the

Company.  In addition, for a period of

twelve months following the effective date of the termination (the “Severance

Period”), the Company shall continue to provide to the Executive, to the extent

practicable, the benefits described in Section 4.3; provided, however, that in

lieu of providing health benefits, the Company shall pay the Executive an

amount equal to the difference between (x) the cost of COBRA health

continuation coverage that would be charged by the Company to a former employee

and eligible dependents for the greater of the Severance Period or the period

during which the Executive and his eligible dependents are entitled to COBRA

health continuation coverage from the Company and (y) the amount for which the

Executive would have been responsible to pay under the health benefit plans in

effect for the Executive immediately prior to his termination.  To the extent the Company determines that

the continuation of any other benefits by the Company is not practicable, the

Company may pay the Executive an amount equal to what would have been the

Company’s cost of providing the coverage for such benefits during the Severance

Period to the Executive and his eligible dependents as if the coverage had

continued.  Notwithstanding the above

provisions of this Section 3.4, the Company may elect to retain the Executive

on the payroll of the Company or an Affiliate (with existing benefits

continuing through standard payroll deduction) for all or any part of the

Severance Period in lieu of the payment of a lump sum; provided that such

election by the Company shall not reduce the total amount due to Executive by

the Company pursuant to this Section 3.4.

 

In the event that by the

first business day following the first anniversary of the date of this

Agreement (the “Optional Date”) either the Term is not extended or this

Agreement is not replaced, the Executive shall have the right, but only on such

Optional Date, to terminate his or her employment with the Company by written

notice to the Company’s Chief Human Resources Executive.  If the Executive so terminates in accordance

with this paragraph, the Company shall pay to the Executive as severance pay an

amount equal to the product of the (a) Average Monthly Compensation multiplied

by (b) six (6), which amount shall be in lieu of any other severance

benefits that the Executive might otherwise have been entitled to under any

other plan, practice, arrangement or agreement of the Company.

 

Notwithstanding any other

provision of this Agreement to the contrary, if the aggregate of the payments

provided for in this Agreement and the other payments and benefits which the

Executive has the right to receive from the Company (the “Total Payments”)

would constitute a  “parachute

payment,” as defined in Section 28OG(b)(2) of the Internal Revenue Code, as

amended (the “Code”), the Executive shall receive the Total Payments unless the

(a) after-tax amount that would be retained by the Executive (after taking into

account all federal, state and local income taxes payable by the Executive and

the amount of any excise taxes payable by the Executive pursuant to Section

4999 of the Code (the “Excise Taxes”)) if the Executive were to receive the

Total Payments has a lesser aggregate value than (b) the after-tax amount that

 

5

 

would be retained by the

Executive (after taking into account all federal, state and local income taxes

and Excise Taxes payable by the Executive) if the Executive were to receive the

maximum amount of the Total Payments that the Executive could receive without

being subject to the Excise Tax (the “Reduced Payments”), in which case the

Executive shall be entitled only to the Reduced Payments. If the Executive is

to receive the Reduced Payments, the Executive shall be entitled to determine

which of the Total Payments, and the relative portions of each, are to be

reduced.

 

4.  Compensation.  The Executive shall receive the following

salary and benefits:

 

4.1           Base Salary. During the Term,

the Executive shall be compensated at an annual rate equal to the Base Salary set forth in

Annex A. The Base Salary and performance shall be reviewed by the Chief

Executive Officer annually, and the Executive shall be entitled to receive

annually an increase in such amount, if any, as may be determined by the Chief

Executive Officer. Such salary shall be payable in accordance with the

Company’s normal payroll practices.

 

4.2           Incentive Compensation.

 

(a)           The Executive shall be eligible for

an annual incentive bonus determined in accordance with the provisions of Annex

A attached hereto (the “Incentive Compensation”).

 

(b)           The Executive shall be entitled to

participate in such stock option programs as are made available to senior

management of the Company from time to time. Any options granted will comply in

all respects with the terms of the NetBank, Inc. Stock Option Plan.

 

4.3           Benefits.

 

(a)           In addition to the Base Salary and

Incentive Compensation, the Executive shall be entitled to such other benefits

as may be available from time to time for employees of the Company.  All such benefits shall be awarded and

administered in accordance with the Company’s standard policies and practices.

Such benefits may include, by way of example only, profit sharing plans,

retirement or investment funds, dental, health, life and disability insurance

benefits, and such other benefits as the Company deems appropriate.

 

(b)

          The Company specifically agrees

to reimburse the Executive for reasonable business expenses incurred by him in

performance of his duties hereunder, as approved from time to time in

accordance with the Company’s policy; provided that the Executive shall, as a

condition of reimbursement, submit verification of the nature and amount of

such expenses in accordance with reimbursement policies from time to time

adopted by the Company and in sufficient detail to comply with Internal Revenue

Service regulations.

 

(c)           On a non-cumulative basis the

Executive shall be entitled to four weeks of vacation each year, during which

his compensation shall be paid in full, and which

 

6

 

shall be taken as approved

in advance by the Company, taking into account the requirements of the Company.

 

4.4           Withholding. The Company may

deduct from each payment of compensation hereunder all amounts required to be

deducted and withheld in accordance with applicable federal and state income,

FICA and other withholding requirements.

 

5.  Proprietary Information.

 

5.1           Treatment of Proprietary

Information.  As a management

official of the Company, the Executive has access to Proprietary Information.

The Executive agrees to maintain the confidentiality of all Proprietary

Information throughout the Term and after the termination of this Agreement.

 

5.2           Obligations of Executive.  During the period described in Section 5.1,

the Executive will hold the Proprietary Information in trust and strictest

confidence, and will not use, reproduce, distribute, disclose or otherwise

disseminate the Proprietary Information except to the extent necessary to

perform the duties assigned to him by the Company.

 

5.3           Delivery upon Termination.

Upon termination of his employment with the Company, the Executive will

promptly deliver to the Company all property belonging to the Company,

including, without limitation, all Proprietary Information then in his

possession or control.

 

6. 

Non-Solicitation.  The Executive

agrees that during his employment by the Company and, in the event of his

termination, other than pursuant to Sections 3.2.1(b) or 3.2.2(a), for a period

of twelve (12) months thereafter, he will not (except on behalf of or with the

prior written consent of the Company) on his own behalf or in the service or on

behalf of others, do any of the following:

 

6.1

          Customers.  Solicit, divert or appropriate, or  attempt to solicit, divert or appropriate,

directly or by assisting others, any business from any of the Company’s

customers, including actively-sought prospective customers, with whom the

Executive has or had material contact during the last two (2) years of his

employment, for purposes of providing products or services that are competitive

with those provided by the Company or its Affiliates.

 

6.2           Vendors. 

Solicit, divert or appropriate, or  attempt

to solicit, divert or appropriate, directly or by assisting others, any

products any products

or services being provided to the Company from any of its vendors with whom the

Executive has or had material contact during the last two (2) years of his

employment to the extent such solicitation, diversion or appropriation would

interfere with any such vendor’s ability to continue to provide the products or

services to the Company or its Affiliates in the same manner and to the same

extent as those provided to the Company or its Affiliates immediately prior to

the Executive’s actions.

 

6.2           Employees. 

Solicit, recruit

or hire away, or attempt to solicit, recruit or hire away, directly or by

assisting others, any employee of the Company or its Affiliates, whether or

 

7

 

not such employee

is a full-time employee or a temporary employee of the Company or its

Affiliates, and whether or not such employment is pursuant to written agreement

and whether or not such employment is for a determined period or is at will.

 

7. 

Non-Competition.  The

Executive agrees that during his employment by the Company and, in the event of

his termination, other than pursuant to Sections 3.2.1(b) or 3.2.2(a), for a

period of twelve (12) months thereafter, he will not (except on behalf of or with the prior

written consent of the Company), within the Non-Competition Area (as defined in

Annex A), either directly or indirectly, on his own behalf or in the service or

on behalf of others, in any capacity which involves duties and responsibilities

similar to those undertaken for the Company, engage in any business which is

the same as or essentially the same as the Business of the Company.

 

8.  Remedies.  The Executive agrees that

the covenants contained in Sections 5 through 7 of this Agreement are of the

essence of this Agreement; that each of the covenants is reasonable and

necessary to protect the business, interests and properties of the Company; and

that irreparable loss and damage will be suffered by the Company should he

breach any of the covenants. Therefore, the Executive agrees and consents that,

in addition to all the remedies provided by law or in equity, the Company shall

be entitled to a temporary restraining order and temporary and permanent

injunctions to prevent a breach or contemplated breach of any of the covenants.

The Company and the Executive agree that all remedies available to the Company

or the Executive, as applicable, shall be cumulative.

 

9.  Severability.  The parties agree that each

of the provisions included in this Agreement is separate, distinct, and

severable from the other provisions of this Agreement, and that the invalidity

or unenforceability of any Agreement provision shall not affect the validity or

enforceability of any other provision of this Agreement. Further, if any

provision of this Agreement is ruled invalid or unenforceable by a court of

competent jurisdiction because of a conflict between the provision and any applicable

law or public policy, the provision shall be redrawn to make the provision

consistent with and valid and enforceable under the law or public policy.

 

10.  Notice.  All notices and other

communications required or permitted under this Agreement shall be in writing

and, if mailed by prepaid first-class mail  or

certified mail, return receipt requested, shall be deemed to have been received

on the earlier of the date shown on the receipt or three (3) business days

after the postmarked date thereof.  In

addition, notices hereunder may be delivered by hand, facsimile transmission or

overnight courier, in which event the notice shall be deemed effective when

delivered or transmitted.  All notices

and other communications under this Agreement shall be given to the parties

hereto at the following addresses:

 

8

 

	

   

  	

  (i)

  	

   

  
	

   

  	

  If to the Company, to it

  at:

  	

   

  
	

   

  	

  NetBank, Inc.

  	

   

  
	

   

  	

  Royal Centre Three

  	

   

  
	

   

  	

  Suite 100

  	

   

  
	

   

  	

  Alpharetta, Georgia 30022

  	

   

  
	

   

  	

  Attn:  Chief Human Resources Executive

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  (ii)

  	

   

  
	

   

  	

  If to the Executive, to  him or her at:

  
	

   

  	

   

  	

   

  
	

   

  	

  Thomas L. Cable

  	

   

  
	

   

  	

  [home address]

  	

   

  
	

   

  	

   

  	

   

  
				

 

11.  Assignment. 

Neither party hereto may assign or delegate this Agreement or any of

its rights and obligations hereunder without the written consent of the other

party hereto.

 

12.  Waiver.  A waiver by the Company of

any breach of this Agreement by the Executive shall not be effective unless in

writing, and no waiver shall operate or be construed as a waiver of the same or

another breach on a subsequent occasion.

 

13.  Attorneys’ Fees.   In the event of litigation between the

parties concerning this Agreement, the party prevailing in such litigation

shall be entitled to receive from the other party all reasonable costs and

expenses, including without limitation attorneys’ fees, incurred by the

prevailing party in connection with such litigation, and the other party shall

pay such costs and expenses to the prevailing party promptly upon demand by the

prevailing party.

 

14.  Applicable Law.  This Agreement shall be construed and

enforced under and in accordance with Federal law, where applicable, and then

with the laws of the State of Georgia.

 

15.  Entire Agreement; No Additional

Benefit.  This Agreement

embodies the entire and final  agreement

of the parties on the subject matter stated in the Agreement.  No amendment or modification of this

Agreement shall be valid or binding upon the Company or the Executive unless

made in writing and signed by both parties. All prior understandings and

agreements relating to the subject matter of this Agreement are hereby

expressly terminated.   The Executive

and the Company acknowledge that, as of the date on which the Term commences,

this Agreement supersedes any employment agreement, Non-Disclosure, Non-Solicitation

and Non-Competition Agreement for Employees between the Executive and the

Company and/or any Affiliate thereof and any other agreement between them

concerning the subject matter hereof, including any change in control agreement

between the Executive and the Company and/or any Affiliate.  The Executive and the Company also

acknowledge that even though the Executive may be paid from the payroll of a

direct or indirect subsidiary of the Company, the Executive is entitled to no

additional employment benefits than those from the Company as set forth herein.

 

9

 

16.  Rights of Third

Parties.  Nothing herein

expressed is intended to or shall be construed to confer upon or give to any

person, firm or other entity, other than the parties hereto and their permitted

assigns, any rights or remedies under or by reason of this Agreement.

 

17.  Survival. The obligations of the

Executive pursuant to Sections 5, 6 and 7 shall survive the termination of the

employment of the Executive hereunder.

 

IN WITNESS WHEREOF, the Company and the

Executive have executed and delivered this Agreement as of the date first  shown above.

 

	

   

  	

   

  	

  THE COMPANY:

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  NETBANK, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/ Douglas K. Freeman

  
	

   

  	

   

  	

  Name:  Douglas K. Freeman

  	

   

  
	

   

  	

   

  	

  Title:    Chief Executive Officer

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  THE EXECUTIVE:

  	

   

  
	

   

  	

   

  	

  /s/ Thomas Lee Cable

  	

   

  
	

   

  	

   

  	

  Thomas Lee Cable

  	

   

  
						

 

10

 

Annex A

 

	

  Position:

  	

   

  	

  Chief Technology Officer

  
	

   

  	

   

  	

   

  
	

  Base Salary:

  	

   

  	

  $133,899.92

  
	

   

  	

   

  	

   

  
	

  Incentive Compensation:

  	

   

  	

  Potential of 20% of Base

  Salary

  
	

   

  	

   

  	

   

  
	

  Business Location:

  	

   

  	

  Other than for periods

  spent traveling in connection with the performance of the Executive’s duties

  hereunder, the Executive shall be based in the Alpharetta, Georgia area.

  
	

   

  	

   

  	

   

  
	

  Non-Competition Area:

  	

   

  	

  The counties of Fulton,

  DeKalb, Cobb, Gwinett, Cherokee, Henry, Clayton, Douglass, Fayette, Coweta,

  Rockdale, Newton, Barrow and Forsyth

  

 

11

 

Annex

B

 

“Change in Control” means any one of the

following events:

 

(1)           the acquisition by any individual, entity or “group”,

within the meaning of Section 13(d) (3) or Section 14(d) (2) of the Securities

Exchange Act of 1934, as amended, (a “Person”) of beneficial ownership (within

the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of

1934) of voting securities of the Company where such acquisition causes any

such Person to own twenty-five percent (25%) or more of the combined voting

power of the then outstanding voting securities then entitled to vote generally

in the election of directors (the “Outstanding Voting Securities”); provided,

however, that for purposes of this paragraph (1) of this definition, the

following shall not be deemed to result in a Change in Control, (i) any acquisition

directly from the Company, unless such a Person subsequently acquires

additional shares of Outstanding Voting Securities other than from the Company,

in which case any such subsequent acquisition shall be deemed to be a Change in

Control; (ii) any acquisition by any employee benefit plan (or related trust)

sponsored or maintained by the Company or any corporation controlled by the

Company; or (iii) any acquisition by merger, consolidation, share exchange,

combination, reorganization, sale or transfer or like transaction that is NOT

otherwise described in paragraph (2) or (4) below as long as no Person (other

than an employee benefit plan or related trust sponsored or maintained by the

Company, any corporation controlled by the Company or any company resulting

from such business combination) obtains beneficial ownership of twenty-five

percent (25%) or more of the then Outstanding Voting Securities;

 

(2)           a merger, consolidation, share exchange, combination,

reorganization or like transaction involving the Company in which the

stockholders of the Company immediately prior to such transaction do not own at

least fifty percent (50%) of the value or voting power of the issued and

outstanding capital stock of the Company or its successor immediately after such

transaction;

 

(3)           the sale or transfer (other than as security for the

Company’s obligations) of more than fifty percent (50%) of the assets of the

Company in any one transaction, a series of related transactions or a series of

transactions occurring within a one (1) year period in which the Company, any

corporation controlled by the Company or the stockholders of the Company

immediately prior to the transaction do not own at least fifty percent (50%) of

the value or voting power of the issued and outstanding equity securities of

the acquiror immediately after the transaction;

 

(4)           the sale or transfer of more than fifty percent (50%) of

the value or voting power of the issued and outstanding capital stock of the

Company by the holders thereof in any one transaction, a series of related

transactions or a series of transactions occurring within a one (1) year period

in which the Company, any corporation controlled by the Company or the

stockholders of the Company immediately prior to the transaction do not own at

least fifty percent (50%) of the value or voting power of the issued and

outstanding equity securities of the acquiror immediately after the

transaction; or

 

(5)           the dissolution or liquidation of the

Company.

 

12Exhibit 10

Exhibit 10.2

EMPLOYMENT

AGREEMENT

 

THIS AGREEMENT is made as of the 1st day of April, 2002, between

NetBank, Inc. (the “Company”), a Georgia corporation, and Laura P. Moon  (the “Executive”), a resident of the State of Georgia, to be effective as of the

date described in Section 1.10 hereof.

 

RECITALS:

 

The

Company desires to employ the Executive and the Executive desires to accept

such employment.

 

In consideration of the

above premises and the mutual agreements hereinafter set forth, the parties

hereby agree as follows:

 

1.     Definitions.

Whenever used in this Agreement, the following terms and their

variant forms shall have the meaning set forth below:

 

1.1           “Agreement” shall mean this

Agreement and any Annexes and Exhibits incorporated herein together with any

amendments hereto made in the manner described in this Agreement.

 

1.2           “Affiliate” shall mean any

business entity that controls, is controlled by, or is under common control

with, the Company.

 

1.3           “Average Monthly Compensation”

shall mean the quotient determined by dividing (A) the sum of (i) the

Executive’s Base Salary and (ii) Executive’s maximum Incentive Compensation (as

defined in Section 4.2(a)) for the year of termination by (B) twelve (12).

 

1.4           “Base Salary” shall have the

meaning set forth in Annex A.

 

1.5           “Business of the Company” shall mean the business

conducted by the Company and its Affiliates, which is currently banking,

residential mortgage lending, commercial lending and leasing and provision of

other financial services.

 

1.6           “Cause” shall mean:

 

1.6.1        With respect to  termination by the Company,

 

(a) a material breach of the terms of this

Agreement by the Executive (including, without limitation, failure by the

Executive to perform his duties and responsibilities in the manner and to the

extent required under this Agreement, or a breach of any representation or

warranty of the Executive set forth herein); which breach remains uncured after

the expiration of thirty (30) days following the delivery of written notice of

such breach to the Executive by the Company; or

 

(b)

conduct by the Executive that amounts to personal dishonesty, willful

misconduct, breach of fiduciary duty involving personal profit, intentional

failure

 

1

 

to perform stated duties,

willful violation of any law, rule or regulation (other than traffic violations

or similar offenses), or willful violation of any final cease and desist order

applicable to the Executive.

 

1.6.2        With respect to

termination by the Executive,

 

(a)  a material breach of the

terms of this Agreement by the Company that remains uncured after the

expiration of thirty (30) days following the delivery of written notice of such

breach to the Company by the Executive; or

 

(b)  any requirement by the Company

that the Executive’s services be rendered primarily at a location or locations

other than the Business Location set forth in Annex A.

 

1.7           “Change in Control” has the

meaning set forth in Annex B attached hereto.

 

1.8           “Permanent Disability” shall

mean the total inability of the Executive to perform his duties under this

Agreement for a period of ninety (90) consecutive days as certified by a

physician chosen by the Company and reasonably acceptable to the Executive;

provided, however, if the Executive is  covered

by a disability insurance policy, the term “Permanent Disability” shall have

the meaning set forth in such policy.

 

1.9           “Proprietary Information” shall mean:

 

(a)           Information

related to the Company or any Affiliate,

 

(i)

which derives economic value, actual or potential, from not being generally

known to or readily ascertainable by other persons who can obtain economic

value from its disclosure or use; and

 

(ii) which is the subject of efforts that are reasonable under the

circumstances to  maintain its

secrecy; and                -

 

(b) All tangible reproductions or embodiments of such information.

 

Assuming

the criteria in (a)(i) and (a)(ii) above are satisfied, Proprietary Information

includes, but is not limited to, technical and non-technical data related to

the compilations, programs, methods, techniques, finances, actual or potential

customers and suppliers, existing and future products, and employees of the

Company or its Affiliates.  Proprietary

Information also includes information which has been disclosed to the Company

or its Affiliates by a third party and which the Company or any Affiliate is

obligated to treat as confidential.

 

1.10         “Term” means the period commencing on the date

hereof and ending on the first anniversary of such date.

 

2

 

2.  Duties.

 

2.1           The Executive is employed in the

position set forth in Annex A and, subject to the direction of the Company,

shall perform and discharge well and faithfully the duties which may be assigned

to him from time to time by the Company in connection with the conduct of its

business.  The Executive may be assigned

duties that may be primarily concentrated in one or more direct or indirect

subsidiaries of the Company.

 

2.2           In addition to the duties and

responsibilities specifically assigned to the Executive pursuant to Section 2.1

hereof, the Executive shall: (a) devote substantially all of his time, energy

and skill during regular business hours to the performance of the duties of his

employment (reasonable vacations and reasonable absences due to illness

excepted), and faithfully and industriously perform such duties; (b) diligently

follow and implement all management policies and decisions communicated to him

by the Company; and (c) timely prepare all reports and accounting as may be

requested of the Executive.

 

2.3           The Executive shall devote

substantially his entire business time, attention and energies to the Business

of the Company and shall not during the term of this Agreement be engaged (whether

or not during normal business hours) in any other business or professional

activity which is competitive in nature; or interferes with his ability to

perform his duties fully; or which promotes an activity inconsistent with the

nature or status of the Company, whether or not such activity is pursued for

gain, profit or other pecuniary advantage; but this shall not be construed as

preventing the Executive from (a) investing his personal assets in businesses

which (subject to item (b) below) are not in competition with the Business of

the Company and which will not require any services on the part of the

Executive in their operation or affairs and in which his participation is

solely that of an investor, (b) purchasing securities in any corporation whose

securities are regularly traded provided that such purchase shall not result in

his collectively owning beneficially at any time five percent (5%) or more of

the equity securities of any business in competition with the Business of the

Company, and (c) participating in civic and professional affairs and

organizations and conferences, preparing or publishing papers or books or

teaching so long as such activity does not materially interfere with the

performance of his duties hereunder.

 

3.  Term and Termination.

 

3.1           Term. This

Agreement shall remain in effect for the Term. 

However, notwithstanding the provisions of Section 1.10, this Agreement

shall terminate upon the death or Permanent Disability of Executive.

 

3.2           Termination. 

During the Term, the employment of the Executive under this Agreement

may  be terminated only as follows:

 

3.2.1

By the Company:

 

(a)  For Cause, with no prior notice except as

provided in Section 1.6.1; or

 

(b) Without Cause at any time, provided that the Company shall give the

Executive thirty (30) days prior written notice of its intent to terminate.

 

3

 

3.2.2 By the Executive:

 

(a)  For Cause, with no prior notice except as

provided in Section 1.6.2; or

 

(b) Without Cause, provided that the Executive shall give the Company

thirty (30) days prior written notice of his intent to terminate.

 

3.2.3

        By the Executive following a Change in Control of the Company,

provided that the Executive shall give written notice to the Company of his  intention to terminate this Agreement and

terminates employment prior to the expiration of the Term.

 

3.2.4        At

any time upon mutual, written agreement of the parties.

 

3.3           Effect of Termination. The effect of termination of

the employment of the  Executive

pursuant to Section 3.2 shall be as set forth in this Section 3.3.

 

3.3.1

       In the event of termination by the

Company:

 

(a)  For Cause, pursuant to Section 3.2.1(a), the

Company shall have no further obligation to the Executive, except for the

payment of any amounts due and owing under Section 4 on the effective date of

termination.

 

(b) Without Cause, pursuant to Section 3.2.1(b), the Company shall be

required to meet its obligations to the Executive under Section 3.4 below.

 

3.3.2

       In the event of termination by the

Executive:

 

(a)  For Cause, pursuant to

Section 3.2.2(a), the Company shall be required to meet its obligations to the

Executive under Section 3.4 below.

 

(b) Without Cause, pursuant to  Section

3.2.2(b), the Company shall have  no

further obligation to the Executive, except for the payment of any amounts due and owing under Section 4

on the effective date of termination.

 

3.3.3        In the event of

termination by the Executive in connection with a Change in Control pursuant to

Section 3.2.3, the Company shall be required to meet its obligations to the

Executive under Section 3.4 below.

 

3.3.4

       In the event of termination upon

mutual agreement of the parties pursuant to Section 3.2.4, the Company shall

have no further obligation to the Executive except for the payment of any

amounts due and owing under Section 4.1 on the effective date of termination

unless otherwise set forth in the written agreement.

 

3.3.5  Notwithstanding anything in this Section 3.3

to the contrary, following any termination of the Executive’s employment, the

Executive shall be entitled to receive

 

4

 

benefits pursuant to the

employee benefit plans in which the Executive participated during his

employment with the Company in accordance with the terms of such plans.

 

3.4           Termination Payments. In the

event Executive’s employment is terminated under this Agreement prior to the

expiration of the Term pursuant to Section 3.3.1(b), Section 3.3.2(a), or

Section 3.3.3, the Company shall pay to the Executive as severance pay and

liquidated damages a lump sum amount equal to the product of the (a) Average

Monthly Compensation multiplied by (b) twelve (12), which amount shall in lieu

of any other severance benefits that the Executive might otherwise have been

entitled to under any other plan, practice, arrangement or agreement of the

Company.  In addition, for a period of

twelve months following the effective date of the termination (the “Severance

Period”), the Company shall continue to provide to the Executive, to the extent

practicable, the benefits described in Section 4.3; provided, however, that in

lieu of providing health benefits, the Company shall pay the Executive an

amount equal to the difference between (x) the cost of COBRA health continuation

coverage that would be charged by the Company to a former employee and eligible

dependents for the greater of the Severance Period or the period during which

the Executive and his eligible dependents are entitled to COBRA health

continuation coverage from the Company and (y) the amount for which the

Executive would have been responsible to pay under the health benefit plans in

effect for the Executive immediately prior to his termination.  To the extent the Company determines that

the continuation of any other benefits by the Company is not practicable, the

Company may pay the Executive an amount equal to what would have been the

Company’s cost of providing the coverage for such benefits during the Severance

Period to the Executive and his eligible dependents as if the coverage had

continued.  Notwithstanding the above

provisions of this Section 3.4, the Company may elect to retain the Executive

on the payroll of the Company or an Affiliate (with existing benefits

continuing through standard payroll deduction) for all or any part of the

Severance Period in lieu of the payment of a lump sum; provided that such

election by the Company shall not reduce the total amount due to Executive by

the Company pursuant to this Section 3.4.

 

In the event

that by the first business day following the first anniversary of the date of

this Agreement (the “Optional Date”) either the Term is not extended or this

Agreement is not replaced, the Executive shall have the right, but only on such

Optional Date, to terminate his or her employment with the Company by written

notice to the Company’s Chief Human Resources Executive.  If the Executive so terminates in accordance

with this paragraph, the Company shall pay to the Executive as severance pay an

amount equal to the product of the (a) Average Monthly Compensation multiplied

by (b) six (6), which amount shall be in lieu of any other severance benefits that the Executive might

otherwise have been entitled to under any other plan, practice, arrangement or

agreement of the Company.

 

Notwithstanding

any other provision of this Agreement to the contrary, if the aggregate of the

payments provided for in this Agreement and the other payments and benefits

which the Executive has the right to receive from the Company (the “Total Payments”)

would constitute a  “parachute payment,” as defined in

Section 28OG(b)(2) of the Internal Revenue Code, as amended (the “Code”), the

Executive shall receive the Total Payments unless the (a) after-tax amount that

would be retained by the Executive (after taking into account all federal,

state and local income taxes payable by the Executive and the amount of any

excise taxes payable by the Executive pursuant to Section 4999 of the Code (the

“Excise Taxes”)) if the Executive were to receive the Total Payments has a

lesser aggregate value than (b) the after-tax amount that

 

5

would be

retained by the Executive (after taking into account all federal, state and

local income taxes and Excise Taxes payable by the Executive) if the Executive

were to receive the maximum amount of the Total Payments that the Executive

could receive without being subject to the Excise Tax (the “Reduced Payments”),

in which case the Executive shall be entitled only to the Reduced Payments. If

the Executive is to receive the Reduced Payments, the Executive shall be

entitled to determine which of the Total Payments, and the relative portions of

each, are to be reduced.

 

4.  Compensation.  The

Executive shall receive the following salary and benefits:

 

4.1           Base Salary. During the Term,

the Executive shall be compensated at an annual rate equal to the Base Salary

set forth in Annex A. The Base

Salary and performance shall be reviewed by the Chief Executive Officer

annually, and the Executive shall be entitled to receive annually an increase

in such amount, if any, as may be determined by the Chief Executive Officer.

Such salary shall be payable in accordance with the Company’s normal payroll

practices.

 

4.2           Incentive Compensation.

 

(a)           The Executive shall be eligible for

an annual incentive bonus determined in accordance with the provisions of Annex

A attached hereto (the “Incentive Compensation”).

 

(b)           The Executive shall

be entitled to participate in such stock option programs as are made available

to senior management of the Company from time to time. Any options granted will

comply in all respects with the terms of the NetBank, Inc. Stock Option Plan.

 

4.3           Benefits.

 

(a)           In addition to the Base Salary and

Incentive Compensation, the Executive shall be entitled to such other benefits

as may be available from time to time for employees of the Company.  All such benefits shall be awarded and

administered in accordance with the Company’s standard policies and practices.

Such benefits may include, by way of example only, profit sharing plans,

retirement or investment funds, dental, health, life and disability insurance

benefits, and such other benefits as the Company deems appropriate.

 

(b)           The Company

specifically agrees to reimburse the Executive for reasonable business expenses

incurred by him in performance of his duties hereunder, as approved from time

to time in accordance with the Company’s policy; provided that the Executive

shall, as a condition of reimbursement, submit verification of the nature and

amount of such expenses in accordance with reimbursement policies from time to

time adopted by the Company and in sufficient detail to comply with Internal

Revenue Service regulations.

 

(c)           On a non-cumulative basis the

Executive shall be entitled to four weeks of vacation each year, during which

his compensation shall be paid in full, and which

 

6

 

shall be taken as approved

in advance by the Company, taking into account the requirements of the Company.

 

4.4           Withholding. The Company may

deduct from each payment of compensation hereunder all amounts required to be

deducted and withheld in accordance with applicable federal and state income,

FICA and other withholding requirements.

 

 

 

5.  Proprietary Information.

 

5.1           Treatment of

Proprietary Information.  As a

management official of the Company, the Executive has access to Proprietary

Information. The Executive agrees to maintain the confidentiality of all

Proprietary Information throughout the Term and after the termination of this

Agreement.

 

5.2           Obligations of Executive.  During the period described in Section 5.1,

the Executive will hold the Proprietary Information in trust and strictest

confidence, and will not use, reproduce, distribute, disclose or otherwise

disseminate the Proprietary Information except to the extent necessary to

perform the duties assigned to him by the Company.

 

5.3           Delivery upon

Termination. Upon termination of his employment with the Company, the

Executive will promptly deliver to the Company all property belonging to the

Company, including, without limitation, all Proprietary Information then in his

possession or control.

 

6. 

Non-Solicitation.  The

Executive agrees that during his employment by the Company and, in the event of

his termination, other than pursuant to Sections 3.2.1(b) or 3.2.2(a), for a

period of twelve (12) months thereafter, he will not (except on behalf of or

with the prior written consent of the Company) on his own behalf or in the

service or on behalf of others, do any of the following:

 

6.1           Customers.  Solicit, divert or appropriate, or  attempt to solicit, divert or appropriate,

directly or by assisting others, any business from any of the Company’s

customers, including actively-sought prospective customers, with whom the

Executive has or had material contact during the last two (2) years of his

employment, for purposes of providing products or services that are competitive

with those provided by the Company or its Affiliates.

 

6.2           Vendors.  Solicit, divert or appropriate, or  attempt to solicit, divert or appropriate,

directly or by assisting others, any products any products or services

being provided to the Company from any of its vendors with whom the Executive

has or had material contact during the last two (2) years of his employment to

the extent such solicitation, diversion or appropriation would interfere with

any such vendor’s ability to continue to provide the products or services to

the Company or its Affiliates in the same manner and to the same extent as

those provided to the Company or its Affiliates immediately prior to the

Executive’s actions.

 

6.2           Employees.  Solicit, recruit or hire away, or

attempt to solicit, recruit or hire away, directly or by assisting others, any

employee of the Company or its Affiliates, whether or

 

 

7

 

not such employee is a full-time employee or a temporary employee of

the Company or its Affiliates, and whether or not such employment is pursuant

to written agreement and whether or not such employment is for a determined

period or is at will.

 

7. 

Non-Competition.  The Executive agrees that during his employment by the Company

and, in the event of his termination, other than pursuant to Sections 3.2.1(b)

or 3.2.2(a), for a period of twelve (12) months thereafter, he will not (except on behalf of or with the prior

written consent of the Company), within the Non-Competition Area (as defined in

Annex A), either directly or indirectly, on his own behalf or in the service or

on behalf of others, in any capacity which involves duties and responsibilities

similar to those undertaken for the Company, engage in any business which is

the same as or essentially the same as the Business of the Company.

 

8. 

Remedies.  The

Executive agrees that the covenants contained in Sections 5 through 7 of this

Agreement are of the essence of this Agreement; that each of the covenants is

reasonable and necessary to protect the business, interests and properties of

the Company; and that irreparable loss and damage will be suffered by the

Company should he breach any of the covenants. Therefore, the Executive agrees

and consents that, in addition to all the remedies provided by law or in

equity, the Company shall be entitled to a temporary restraining order and

temporary and permanent injunctions to prevent a breach or contemplated breach

of any of the covenants. The Company and the Executive agree that all remedies

available to the Company or the Executive, as applicable, shall be cumulative.

 

9. 

Severability.  The

parties agree that each of the provisions included in this Agreement is

separate, distinct, and severable from the other provisions of this Agreement,

and that the invalidity or unenforceability of any Agreement provision shall not

affect the validity or enforceability of any other provision of this Agreement.

Further, if any provision of this Agreement is ruled invalid or unenforceable

by a court of competent jurisdiction because of a conflict between the

provision and any applicable law or public policy, the provision shall be

redrawn to make the provision consistent with and valid and enforceable under

the law or public policy.

 

10.   

Notice.    All

notices and other communications required or permitted under this Agreement shall

be in writing and, if mailed by prepaid first-class mail  or certified mail, return receipt

requested, shall be deemed to have been received on the earlier of the date

shown on the receipt or three (3) business days after the postmarked date

thereof.  In addition, notices hereunder

may be delivered by hand, facsimile transmission or overnight courier, in which

event the notice shall be deemed effective when delivered or transmitted.  All notices and other communications under

this Agreement shall be given to the parties hereto at the following addresses:

 

8

 

	

   

  	

  (i)

  	

   

  
	

   

  	

  If to the Company, to it at:

  	

   

  
	

   

  	

  NetBank, Inc.

  	

   

  
	

   

  	

  Royal Centre Three

  	

   

  
	

   

  	

  Suite 100

  	

   

  
	

   

  	

  Alpharetta, Georgia 30022

  	

   

  
	

   

  	

  Attn: 

  Chief Human Resources Executive

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  (ii)

  	

   

  
	

   

  	

  If to the Executive, to  him or her at:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Laura P. Moon

  	

   

  
	

   

  	

  [home address]

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
				

 

 

11.  Assignment. 

Neither party

hereto may assign or delegate this Agreement or any of its rights and

obligations hereunder without the written consent of the other party hereto.

 

12. 

Waiver.  A

waiver by the Company of any breach of this Agreement by the Executive shall

not be effective unless in writing, and no waiver shall operate or be construed

as a waiver of the same or another breach on a subsequent occasion.

 

13. 

Attorneys’ Fees.   In the event of litigation between the parties concerning this

Agreement, the party prevailing in such litigation shall be entitled to receive

from the other party all reasonable costs and expenses, including without

limitation attorneys’ fees, incurred by the prevailing party in connection with

such litigation, and the other party shall pay such costs and expenses to the

prevailing party promptly upon demand by the prevailing party.

 

14.  Applicable Law.  This Agreement shall be construed and

enforced under and in accordance with Federal law, where applicable, and then

with the laws of the State of Georgia.

 

15.  Entire Agreement; No Additional

Benefit.  This Agreement

embodies the entire and final  agreement

of the parties on the subject matter stated in the Agreement.  No amendment or modification of this

Agreement shall be valid or binding upon the Company or the Executive unless

made in writing and signed by both parties. All prior understandings and

agreements relating to the subject matter of this Agreement are hereby

expressly terminated.   The Executive

and the Company acknowledge that, as of the date on which the Term commences,

this Agreement supersedes any employment agreement, Non-Disclosure, Non-Solicitation

and Non-Competition Agreement for Employees between the Executive and the

Company and/or any Affiliate thereof and any other agreement between them

concerning the subject matter hereof, including any change in control agreement

between the Executive and the Company and/or any Affiliate.  The Executive and the Company also

acknowledge that even though the Executive may be paid from the payroll of a

direct or indirect subsidiary of the Company, the Executive is entitled to no

additional employment benefits than those from the Company as set forth herein.

 

9

 

16. 

Rights of Third Parties.  Nothing

herein expressed is intended to or shall be construed to confer upon or give to

any person, firm or other entity, other than the parties hereto and their

permitted assigns, any rights or remedies under or by reason of this Agreement.

 

17.  Survival. The

obligations of the Executive pursuant to Sections 5, 6 and 7 shall survive the

termination of the employment of the Executive hereunder.

 

IN WITNESS WHEREOF, the

Company and the Executive have executed and delivered this Agreement as of the

date first  shown above.

 

	

   

  	

  THE COMPANY:

  
	

   

  	

   

  	

   

  
	

   

  	

  NETBANK, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Douglas K. Freeman

  
	

   

  	

  Name: 

  	

  Douglas K.

  Freeman

  
	

   

  	

  Title:

  	

  Chief

  Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  THE

  EXECUTIVE:

  
	

   

  	

  /s/ Laura P.

  Moon

  	

   

  
	

   

  	

  Laura

  P. Moon

  
				

 

 

10

Annex A

 

	

  Position:

  	

   

  	

  EVP and

  Chief Accounting Officer

  
	

   

  	

   

  	

   

  
	

  Base Salary:

  	

   

  	

  $132,508.37

  
	

   

  	

   

  	

   

  
	

  Incentive

  Compensation:

  	

   

  	

  Potential of

  20% of Base Salary

  
	

   

  	

   

  	

   

  
	

  Business

  Location:

  	

   

  	

  Other than

  for periods spent traveling in connection with the performance of the

  Executive’s duties hereunder, the Executive shall be based in the Alpharetta,

  Georgia area.

  
	

   

  	

   

  	

   

  
	

  Non-Competition

  Area:

  	

   

  	

  The counties

  of Fulton, DeKalb, Cobb, Gwinett, Cherokee, Henry, Clayton, Douglass,

  Fayette, Coweta, Rockdale, Newton, Barrow and Forsyth

  

 

 

11

 

Annex B

 

“Change in Control” means any

one of the following events:

 

                (1)           the

acquisition by any individual, entity or “group”, within the meaning of Section

13(d) (3) or Section 14(d) (2) of the Securities Exchange Act of 1934, as

amended, (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3

promulgated under the Securities Exchange Act of 1934) of voting securities of

the Company where such acquisition causes any such Person to own twenty-five

percent (25%) or more of the combined voting power of the then outstanding

voting securities then entitled to vote generally in the election of directors

(the “Outstanding Voting Securities”); provided, however, that for purposes of

this paragraph (1) of this definition, the following shall not be deemed to

result in a Change in Control, (i) any acquisition directly from the Company,

unless such a Person subsequently acquires additional shares of Outstanding

Voting Securities other than from the Company, in which case any such

subsequent acquisition shall be deemed to be a Change in Control; (ii) any

acquisition by any employee benefit plan (or related trust) sponsored or

maintained by the Company or any corporation controlled by the Company; or

(iii) any acquisition by merger, consolidation, share exchange, combination,

reorganization, sale or transfer or like transaction that is NOT otherwise

described in paragraph (2) or (4) below as long as no Person (other than an

employee benefit plan or related trust sponsored or maintained by the Company,

any corporation controlled by the Company or any company resulting from such

business combination) obtains beneficial ownership of twenty-five percent (25%)

or more of the then Outstanding Voting Securities;

 

                (2)           a

merger, consolidation, share exchange, combination, reorganization or like

transaction involving the Company in which the stockholders of the Company

immediately prior to such transaction do not own at least fifty percent (50%)

of the value or voting power of the issued and outstanding capital stock of the

Company or its successor immediately after such transaction;

 

                (3)           the

sale or transfer (other than as security for the Company’s obligations) of more

than fifty percent (50%) of the assets of the Company in any one transaction, a

series of related transactions or a series of transactions occurring within a

one (1) year period in which the Company, any corporation controlled by the

Company or the stockholders of the Company immediately prior to the transaction

do not own at least fifty percent (50%) of the value or voting power of the

issued and outstanding equity securities of the acquiror immediately after the

transaction;

 

                (4)           the

sale or transfer of more than fifty percent (50%) of the value or voting power

of the issued and outstanding capital stock of the Company by the holders

thereof in any one transaction, a series of related transactions or a series of

transactions occurring within a one (1) year period in which the Company, any

corporation controlled by the Company or the stockholders of the Company

immediately prior to the transaction do not own at least fifty percent (50%) of

the value or voting power of the issued and outstanding equity securities of

the acquiror immediately after the transaction; or

 

                (5)           the

dissolution or liquidation of the Company.

 

12

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