Document:

INDEPENDENT CONTRACTOR AGREEMENT

 

THIS INDEPENDENT
CONTRACTOR AGREEMENT is made and entered into as of the ___ day of _______________, 2014 (“Effective Date”),
by and between NEWBRIDGE BANK, a North Carolina bank (hereinafter the “Bank”), and MICHAEL S. PATTERSON
(hereinafter “Contractor”).

 

WITNESSETH:

 

WHEREAS, the Bank is
engaged in the business of commercial banking and Contractor is knowledgeable with respect to, and experienced in, all phases of
that business;

 

WHEREAS, the Bank desires
to engage Contractor as an independent contractor for the purposes set forth herein, and Contractor desires to be so engaged, in
accordance with the terms and conditions herein set forth,

 

NOW, THEREFORE, for
and in consideration of the promises, covenants and agreements herein contained, the parties agree as follows:

 

1.           Engagement. The Bank agrees
to engage Contractor as an independent contractor upon the terms and conditions set forth in this Agreement.

 

2.           Scope of Engagement.
During the term of this Agreement, Contractor shall (a) provide services to the Bank’s management in connection with developing
opportunities for enhancing the Bank’s financial strength through acquisitions, (b) provide advice to the Bank’s management
in connection with developing core deposit gathering activities, addressing asset quality matters, enhancing operating efficiencies
and undertaking other initiatives to further enhance the Bank’s performance, and (c) undertake such other independent contractor
duties as may be agreed upon by the Bank and the Contractor. In undertaking such activities, Contractor shall perform, to the best
of Contractor’s abilities, such activities as are customarily rendered by and required of a person in such position. Contractor
shall devote his full “business” time, efforts and abilities to the performance of such activities on behalf of the
Bank, the advancement of the Bank's interests, and the achievement of the goals and objectives of the Bank. During the term of
this Agreement, Contractor will observe the policies and practices established by the Bank and will coordinate his activities with,
and report to, the Bank’s President and Chief Executive Officer.

 

3.           Compensation; Expenses; Office.

 

(a)           Contractor shall be paid a fee
of $12,500 per month, payable in two equal installments on the 15th day (or next following business day) and the last
day (or next following business day) of each calendar month. For any portion of a calendar month occurring within the term of this
Agreement, Contractor shall be paid a prorated amount calculated by dividing $12,500 by the number of days in the applicable calendar
month and by multiplying the result of such division by the number of applicable days.

 

    	 

    	 

    

 

(b)           Contractor shall be reimbursed
his out-of-pocket expenses for food, travel lodging and communication charges and shall be reimbursed for mileage at the rate the
Bank reimburses its employees, in each case as incurred in the performance of his obligations herein. Contractor shall present
evidence of such reimbursable expenses.

 

(c)            The Bank shall provide Contractor
with telephone, email capability, secretarial assistance and other support services.

 

4.            Indemnification. By virtue
of the approval of this Agreement by the Bank’s Board of Directors, the Bank agrees to provide indemnification to Contractor
to the extent and as permitted by the Articles of Incorporation and Bylaws of the Bank, N.C. Gen. Stat. Section 55-8-56, and Chapter
53C of the North Carolina General Statutes, subject to any applicable restrictions or limitations imposed in regulations of the
North Carolina Commissioner of Banks or the Federal Deposit Insurance Corporation.

 

5.           Cooperation in Legal Proceedings.
After the termination of this Agreement, Contractor agrees to cooperate with the Bank and any entity the Bank controls, by which
the Bank is controlled or which is under common control with the Bank (an “Affiliate”) in the defense or prosecution
of any claims or actions that may be brought against or on behalf of the Bank or one or more Affiliates, which relate to events
or occurrences that transpired while Contractor was providing services to the Bank. Contractor’s cooperation in connection
with such claims or actions shall include, but not be limited to, being available upon reasonable notice to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of the Bank or any of its Affiliates. Contractor also agrees to
cooperate with the Bank and any of its Affiliates in connection with any investigation or review of any federal, state, or local
regulatory authority as any such investigation or review relates to any acts or omissions that transpired while Contractor was providing
services to the Bank. Contractor understands that in any legal action, investigation, or review covered by this Section 5 that
the Bank expects Contractor to provide only accurate and truthful information or testimony. The Bank will pay all expenses reasonably
incurred by Contractor in comply with the provisions of this Section 5.

 

6.          Compliance with Regulatory
Restrictions. Notwithstanding anything to the contrary herein, and in addition to any other restrictions stated in this Agreement,
any compensation or other benefits paid to Contractor shall be limited to the extent required by any Regulatory Authority (as defined
in Section 9 of this Agreement). Contractor agrees that compliance by the Bank with such regulatory restrictions, to the
extent that compensation or other benefits paid to Contractor are limited, shall not be a breach of this Agreement by the Bank.
In the event that the Bank is required to make any adjustment to Contractor’s compensation or benefits in order to comply
with any applicable legal and regulatory requirements, such changes shall be made in a manner such that, to the maximum extent
legally possible, Contractor is put in the same economic position as it would have been absent such regulatory restriction or intervention.

 

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7.           Confidentiality. Contractor
covenants that Contractor shall keep all confidential, proprietary, and other information of the Bank not generally available to
third parties (“Confidential Information”) confidential during the term of this Agreement and thereafter, and
shall not use any Confidential Information for Contractor’s or any person’s benefit other than the Bank. Contractor
shall comply with all applicable federal and state laws and regulations pertaining to the confidentiality of information possessed
or controlled by the Bank. Upon the expiration or termination of this Agreement, Contractor shall return all Confidential Information
held in any form to the Bank.

 

8.           Non-Competition. Contractor
covenants that during the term of this Agreement and for a period of two (2) years following the expiration or termination of this
Agreement, Contractor will not provide services to any financial institution doing business within the banking markets in which
the Bank operates directly or indirectly as an employee, independent contractor, agent, principal, director or otherwise.

 

9.           Termination. It is anticipated
that the term of this Agreement shall continue a period of five (5) years from the Effective Date. Nevertheless, Contractor may
terminate this Agreement at any time upon sixty (60) days prior written notice to the Bank. The Bank may terminate Contractor’s
engagement for “Cause” (as defined below).

 

For purposes of this
Section 9, the Bank shall have “Cause” to terminate Contractor’s engagement upon:

 

(a)           A determination by the Bank,
in good faith, that Contractor (i) has breached in any material respect any of the terms or conditions of this Agreement, or (ii)
is engaging or has engaged in willful misconduct or conduct which is detriment to the business prospects of the Bank or which has
had or likely will have a material adverse effect on the Bank’s business or reputation. Prior to any termination by the Bank
of Contractor’s engagement for a breach, failure to perform or conduct described in this item (a), the Bank shall give Contractor
written notice which describes such breach, failure to perform or conduct and if during a period of five business (5) days following
such notice Contractor cures or corrects the same to the reasonable satisfaction of the Bank, then this Agreement shall remain
in full force and effect. However, notwithstanding the above, if the Bank has given written notice to Contractor on a previous
occasion of the same or a substantially similar breach, failure to perform or conduct, or of a breach, failure to perform or conduct
which the Bank determines in good faith to be of substantially similar import, or if the Bank determines in good faith that the
then current breach, failure to perform or conduct is not reasonably curable, then termination under this item (a) shall be effective
immediately and Contractor shall have no right to cure such breach, failure to perform or conduct.

 

(b)           The violation by Contractor
of any applicable federal or state law, or any applicable rule, regulation, order or statement of policy promulgated by any governmental
agency, bureau or authority having jurisdiction over the Bank or any of its Affiliates (a “Regulatory Authority”,
including without limitation the Federal Deposit Insurance Corporation, the North Carolina Commissioner of Banks or any other banking
regulator having jurisdiction over the Bank), which results from Contractor’s gross negligence, willful misconduct or intentional
disregard of such law, rule, regulation, order or policy statement and results in any substantial damage, monetary or otherwise,
to the Bank or any of its Affiliates or to the Bank’s reputation;

 

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(c)           The commission in the course
of Contractor’s engagement by the Bank of any act of fraud, embezzlement, theft or proven personal dishonesty (whether or
not resulting in criminal prosecution or conviction);

 

(d)           The conviction of Contractor
of any felony or any criminal offense involving dishonesty or breach of trust, or the occurrence of any event described in Section
19 of the Federal Deposit Insurance Act or any other event or circumstance which disqualifies Contractor from serving as a party
affiliated with the Bank or any of its Affiliates; or

 

(e)           Contractor becomes unacceptable
to, or is removed, suspended or prohibited from participating in the conduct of the Bank’s affairs (or if proceedings for
that purpose are commenced) by any Regulatory Authority.

 

10.           Succession. This Agreement
shall be binding upon and shall inure to the benefit of the Bank and its successors. The Bank is contracting to receive the benefit
of Contractor’s unique personal skills and experience and, accordingly, Contractor may not assign Contractor’s rights
or obligations herein. Contractor’s rights and obligations herein shall terminate upon his death.

 

11.           Invalid Provisions. Should
any provision of this Agreement be declared invalid for any reason by any court of competent jurisdiction, said provision shall
be deleted from the Agreement and the remainder of this Agreement shall not be affected thereby.

 

12.           Amendment and Waiver.
This Agreement may be amended only by a writing signed by all parties hereto. The waiver, by either party, of a breach of any provision
of this Agreement shall not be deemed to be a waiver of any subsequent breach.

 

13.           Notice. Any notice to
be given hereunder shall be in writing and either hand-delivered or mailed, by certified mail, postage prepaid, to the parties
at their addresses shown below their signatures hereon or such other address as any party shall have specified by notice to the
other party. All notices shall be deemed to have been received on the earlier of the date of actual delivery or the third (3rd)
business day after the mailing thereof.

 

14.           Miscellaneous. This Agreement
contains the entire agreement between the parties and supercedes all prior agreements and understandings, oral or written, with
respect to the subject matter thereof. This Agreement shall be governed by and construed in accordance with the laws of the State
of North Carolina. Section headings are for reference purposes only and shall not be deemed to control or affect the meaning or
construction of any provisions of this Agreement.

 

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IN WITNESS WHEREOF,
the Bank has caused this instrument to be executed in its corporate name by its duly authorized officer, and Contractor has hereunto
set his hand and seal, all as of the day and year first above written.

 

	 	NEWBRIDGE BANK
	 	 
	 	By:	 
	 	 	     Pressley A. Ridgill
	 	 	     President and Chief Executive Officer
	 	 	     1501 Highwoods Blvd, Suite 400
	 	 	     Greensboro, NC  27410
	 	 
	 	CONTRACTOR:
	 	 
	 	_________________________________________(SEAL)
	 	 	Michael S. Patterson
	 	 	_____________________________
	 	 	_____________________________

 

    	5SETTLEMENT AND RELEASE AGREEMENT

 

THIS SETTLEMENT AND RELEASE AGREEMENT (this
“Agreement”) is made as of the ___ day of ________________, 2014, by and between NEWBRIDGE BANK (the “Bank”),
a North Carolina commercial bank, and ____________________ (the “Executive”).

 

Introduction

 

Executive and CapStone
Bank (“CapStone”) entered into a ______________________, dated March 1, 2013 (the “Severance Agreement”).
CapStone has entered into an Agreement and Plan of Combination and Reorganization, dated November 1, 2013 (the “Combination
Agreement”), pursuant to which CapStone will be merged with and into the Bank (the “Merger”). The
Bank has notified Executive that it will unilaterally terminate the Severance Agreement (except as otherwise specifically agreed
by the Bank and Executive herein) following the effectiveness of the Merger and, subject to the Executive’s execution and
delivery of this Agreement to the Bank, pay to Executive the cash sum set forth on Appendix A attached hereto and incorporated
herein by reference (the “Settlement Payment”).

 

NOW, THEREFORE, in
consideration of the premises and the terms and conditions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.           Effectiveness.
This Agreement shall become effective immediately following the “Effective Time” of the Merger (as that term is defined
in the Combination Agreement) upon the Bank’s termination of the Severance Agreement and delivery of the Settlement Payment
to Executive (the “Termination Time”).

 

2.           Tax Considerations.
Executive acknowledges that the Bank intends to rely on Treas. Reg. 1.409A-3(j)(4)(ix)(B) in making the Settlement Payment and
that the applicability of the provisions of Treas. Reg. 1.409A-3(j)(4)(ix)(B) to Executive’s receipt of the Settlement Payment
as provided herein may be contingent on other employees of the Bank entering into similar settlement arrangements with the Bank.
Executive agrees that federal, state and local tax withholdings may be applied to the Settlement Payment as determined by the Bank
in its sole discretion consistent with applicable law.

 

3.           Release.

 

a.           In consideration
of the making of the Settlement Payment to Executive, Executive, for himself, his attorneys, heirs, executors, administrators,
successors and assigns, fully, finally and forever waives, releases and discharges the Bank, and all parent, subsidiary and/or
affiliated companies of the Bank, as well as the Bank and such companies’ respective successors, assigns, officers, owners,
directors, agents, representatives, attorneys, and employees (all of whom are referred to throughout this Agreement as the “Releasees”),
from all claims, claims for relief, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every
nature whatsoever, related to or arising out of the Severance Agreement.

 

    	 

    	 

    

 

Specifically included
in this waiver and release are, among other things, any and all claims related to any severance pay, change in control benefits,
provision of major medical insurance coverage (or cash payments in lieu of such coverage), participation rights in the Bank’s
welfare benefit plans, rights to contractual employment, bonus or other incentive payment rights, and rights to or reimbursement
of legal expenses, automobile expenses or country club dues which are provided for under the Severance Agreement.

 

b.           The foregoing waiver,
release and discharge does not apply to (1) base salary accrued (whether or not paid) up to the Termination Time; (2) the Bank’s
indemnification obligations to Executive pursuant to the Bank’s By-Laws or Articles of Incorporation; and (3) unreimbursed
business expenses incurred prior to the Termination Time for which Executive is entitled to reimbursement under the Bank’s
policies. The foregoing waiver, release and discharge does not waive, release or discharge claims that cannot be released by private
agreement.

 

4.           Advice of
Counsel. Executive acknowledges that he has been, and hereby is advised by the Bank to consult with an attorney in regard to
this matter, Executive understands that Executive is responsible for the costs of any such legal services incurred in connection
with such consultation.

 

5.           Non-Admission.
This Agreement shall in no way be construed as an admission by any of the Releasees that it, he or she has acted wrongfully with
respect to Executive or any other person or that Executive has any rights whatsoever against the Releasees. The Releasees specifically
disclaim any liability to or wrongful acts against Executive or any other person on the part of themselves, their employees, or
their agents.

 

6.           No Filing
of Claims. Executive represents and warrants that Executive has not filed, nor assigned to others the right to file, nor are
there currently pending, any complaints, charges, claims, grievances, or lawsuits against any of the Releasees with any administrative,
state, federal, or governmental entity or agency or with any court. Nothing herein is intended to or shall preclude Executive from
filing a complaint and/or charge with any appropriate federal, state, or local governmental agency or cooperating with said agency
in its investigation. Executive, however, agrees that he shall not be entitled to receive any relief or recovery in connection
with any complaint or charge brought against the Releasees, without regard as to who brought said complaint or charge.

 

		7.	Executive and Bank Acknowledgements.

 

a.           Executive acknowledges
and agrees and understands that the making of the Settlement Payment is not required by the Bank’s policies and procedures
and that the Settlement Payment is in addition to any and all pay and benefits to which Executive already may have been entitled
by contract or law, other than pursuant to the Severance Agreement, and constitutes good, valuable, and sufficient consideration
for Executive’s covenants and agreements contained in this Agreement. Executive further acknowledges that payment of the
Settlement Payment shall fully satisfy and forever extinguish all obligations to the Executive under the Severance Agreement.

 

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b.           Except as contemplated
by Section 3(b) above, Executive acknowledges, understands, and agrees that Executive has been paid in full for all hours that
Executive has worked for the Bank through the date of execution of this Agreement and that Executive has been paid any and all
compensation or bonuses which have been earned by Executive through the date of this Agreement.

 

c.           Notwithstanding
any provision of the Severance Agreement or this Agreement to the contrary, Executive acknowledges and agrees that the Bank’s
making of the Settlement Payment to Executive is good, valuable and sufficient consideration supporting the continued effectiveness
of the provisions of Sections 5 and 8 of the Severance Agreement and acknowledges and agrees that it is the intent of Executive
and the Bank that such provisions remain in full force and effect for the periods described therein.

 

d.           Executive acknowledges,
understands, and agrees that Executive is responsible for the payment of any and all local, state, and/or federal taxes which may
be attributable to the Settlement Payment and indemnifies and holds the Releasees harmless from such tax consequences, including
interest and/or penalties, arising out of such payment to Executive. No representations have been or are made herein by or to any
signatory to this Agreement regarding the tax consequences of this Agreement.

 

e.           Executive affirms
that the only consideration for his execution and delivery of this Agreement is that set forth in Appendix A and that no other
promise or agreement of any kind has been made to or with Executive by any person or entity to cause Executive to execute and
deliver this Agreement, and that Executive fully understands the meaning and intent of this Agreement, including but not limited
to, its final and binding effect.

 

8.           Agreement
Binding; Governing Law; Severability. The Bank and the Executive agree that the terms of this Agreement shall be final and
binding. Executive understands and acknowledges that this Agreement contains a full and final release of claims against the Releasees
arising out of or related to the Severance Agreement; and that Executive has agreed to its terms knowingly, voluntarily, and without
intimidation, coercion or pressure. This Agreement shall be interpreted, enforced and governed under the laws of the State of North
Carolina. The provisions of this Agreement are severable, and if any part of this Agreement is found to be unenforceable, the remainder
of this Agreement will continue to be valid and effective.

 

9.           Entire Agreement.
This Agreement sets forth the entire agreement between the Bank and the Executive with respect to the specific subject matter hereof
and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Bank and the Executive pertaining
to the specific subject matter of this Agreement.

 

10.           Successors
and Assigns. All covenants and agreements contained in this Agreement by or on behalf of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. Notwithstanding the
foregoing, this Agreement may not be assigned by Executive and any purported assignment shall be null and void.

 

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11.           Compliance
with Internal Revenue Code Section 409A. The Bank and Executive intend that their exercise of authority or discretion under
this Agreement shall comply with Section 409A of the Code. If at the Termination Time Executive is a specified employee, as defined
in Section 409A of the Code, and if any payments under this Agreement, will result in additional tax or interest to the Executive
because of Section 409A, then despite any contrary provision of this Agreement the Executive shall not be entitled to the payments
until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for
reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date
that does not result in additional tax or interest to the Executive under Section 409A. As promptly as possible after the end of
the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the
Executive in a single lump sum. If any provision of this Agreement does not satisfy the requirements of Section 409A, such provision
shall nevertheless be applied in a manner consistent with those requirements. If any provision of this Agreement would subject
Executive to additional tax or interest under Section 409A, the parties shall reform the provision. However, the parties shall
maintain to the maximum extent practicable the original intent of the applicable provision without subjecting Executive to additional
tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.

 

Executive has carefully
considered all provisions of this Agreement before executing and delivering it. Executive’s signature below indicates Executive’s
understanding and agreement with all of the terms of this Agreement.

 

IN WITNESS WHEREOF,
Executive and the Bank have executed this Agreement as of the date first written above.

 

	 	EXECUTIVE
	 	                   
	 	          
	 	Name:	         

 

	 	NEWBRIDGE BANK
	 	 
	 	By:	 
	 	 	Name:  Pressley A. Ridgill
	 	 	Title:  President and Chief Executive Officer

 

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