PARAGON COMMERCIAL CORPORATION (NASDAQ:PBNC) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(e)On December 29, 2016, Paragon Commercial Corporation (the
Company) and Paragon Commercial Bank (the Bank) entered into
several agreements with their executive officers. These
agreements are summarized below and included as exhibits to this
report. The Bank is a wholly owned subsidiary of the Company. The
descriptions of the agreements set forth below do not purport to
be complete and are qualified in their entirety by reference to
the full text of such agreements, copies of which are included as
exhibits to this report and are incorporated herein by reference.
Capitalized terms appearing below are defined in the applicable
agreement.
Company) and Paragon Commercial Bank (the Bank) entered into
several agreements with their executive officers. These
agreements are summarized below and included as exhibits to this
report. The Bank is a wholly owned subsidiary of the Company. The
descriptions of the agreements set forth below do not purport to
be complete and are qualified in their entirety by reference to
the full text of such agreements, copies of which are included as
exhibits to this report and are incorporated herein by reference.
Capitalized terms appearing below are defined in the applicable
agreement.
Second Amendment to Employment Agreement with Robert C. Hatley.
On December 29, 2016, the Company and the Bank entered into a
Second Amendment to the Employment Agreement with Robert C.
Hatley. Mr. Hatley is president and chief executive officer of
the Company and the Bank. Mr. Hatley originally entered into the
Employment Agreement with the Company and the Bank effective
September 1, 2013. The Employment Agreement was subsequently
amended effective October 27, 2015. The Employment Agreement and
the First Amendment were filed as Exhibits 10.3.1 and 10.3.2,
respectively, to the Companys Registration Statement on Form S-1
(File No. 333-211627), filed with the Securities and Exchange
Commission on May 26, 2016 (the Registration Statement).
On December 29, 2016, the Company and the Bank entered into a
Second Amendment to the Employment Agreement with Robert C.
Hatley. Mr. Hatley is president and chief executive officer of
the Company and the Bank. Mr. Hatley originally entered into the
Employment Agreement with the Company and the Bank effective
September 1, 2013. The Employment Agreement was subsequently
amended effective October 27, 2015. The Employment Agreement and
the First Amendment were filed as Exhibits 10.3.1 and 10.3.2,
respectively, to the Companys Registration Statement on Form S-1
(File No. 333-211627), filed with the Securities and Exchange
Commission on May 26, 2016 (the Registration Statement).
The Second Amendment modifies Article 6 of the Employment
Agreement, which sets forth the benefits payable to Mr. Hatley in
the event of a Change in Control of the Company or the Bank.
Under the terms of the Second Amendment, if a Change in Control
occurs while the Employment Agreement is in effect, then Mr.
Hatley will be entitled to a lump sum cash payment equal to 2.99
times his annual compensation, along with certain insurance and
other benefits described in the Second Amendment. The version of
the Employment Agreement previously in effect required a
termination of Mr. Hatleys employment within eighteen months
after a Change in Control before the cash benefits would have
become payable.
Agreement, which sets forth the benefits payable to Mr. Hatley in
the event of a Change in Control of the Company or the Bank.
Under the terms of the Second Amendment, if a Change in Control
occurs while the Employment Agreement is in effect, then Mr.
Hatley will be entitled to a lump sum cash payment equal to 2.99
times his annual compensation, along with certain insurance and
other benefits described in the Second Amendment. The version of
the Employment Agreement previously in effect required a
termination of Mr. Hatleys employment within eighteen months
after a Change in Control before the cash benefits would have
become payable.
Restated Salary Continuation Agreement with Robert C. Hatley. On
December 29, 2016, the Bank also entered into a restated Salary
Continuation Agreement with Mr. Hatley. The restated agreement
became effective on January 1, 2017. The restated agreement
replaces the Banks Amended and Restated Salary Continuation
Agreement with Mr. Hatley, which was effective December 27, 2013,
and amended effective May 20, 2014. The prior agreement and
amendment were filed as Exhibits 10.6.1 and 10.6.2, respectively,
to the Registration Statement.
December 29, 2016, the Bank also entered into a restated Salary
Continuation Agreement with Mr. Hatley. The restated agreement
became effective on January 1, 2017. The restated agreement
replaces the Banks Amended and Restated Salary Continuation
Agreement with Mr. Hatley, which was effective December 27, 2013,
and amended effective May 20, 2014. The prior agreement and
amendment were filed as Exhibits 10.6.1 and 10.6.2, respectively,
to the Registration Statement.
Under the restated agreement, assuming Mr. Hatley remains
employed with the Bank through age sixty-five, he will be
entitled to an annual benefit payment of $120,000, paid in equal
monthly installments, for a period of twenty years following his
Separation from Service. The benefit is not payable if Mr.
Hatleys employment is terminated for Cause. If the Separation
from Service occurs before Mr. Hatley reaches age sixty-five,
then the amount of the annual benefit will be limited to the
vested Accrued Benefit as of the month-end prior to the
Separation from Service and will commence after Mr. Hatley
reaches age sixty-five. If the Separation from Service occurs
after Mr. Hatley reaches age sixty-five, then the annual benefit
will be increased to reflect interest on amounts that would have
been paid if payments had commenced at age sixty-five.
employed with the Bank through age sixty-five, he will be
entitled to an annual benefit payment of $120,000, paid in equal
monthly installments, for a period of twenty years following his
Separation from Service. The benefit is not payable if Mr.
Hatleys employment is terminated for Cause. If the Separation
from Service occurs before Mr. Hatley reaches age sixty-five,
then the amount of the annual benefit will be limited to the
vested Accrued Benefit as of the month-end prior to the
Separation from Service and will commence after Mr. Hatley
reaches age sixty-five. If the Separation from Service occurs
after Mr. Hatley reaches age sixty-five, then the annual benefit
will be increased to reflect interest on amounts that would have
been paid if payments had commenced at age sixty-five.
If Mr. Hatley (1) has a voluntary Separation from Service before
age sixty-five that is not for Good Reason and that occurs within
two years after a Change in Control or (2) has a Separation from
Service before age sixty-five that occurs more than two years
after a Change in Control, then the amount of the annual benefit
will be equal to the Accrued Benefit as of the month-end prior to
the Separation from Service and will commence after Mr. Hatley
reaches age sixty-five.
age sixty-five that is not for Good Reason and that occurs within
two years after a Change in Control or (2) has a Separation from
Service before age sixty-five that occurs more than two years
after a Change in Control, then the amount of the annual benefit
will be equal to the Accrued Benefit as of the month-end prior to
the Separation from Service and will commence after Mr. Hatley
reaches age sixty-five.
If a Separation from Service occurs that is an involuntary
termination without Cause or a Voluntary Termination with Good
Reason, in either case within two years after a Change in
Control, then the amount of the annual benefit will be the
Accrual Balance at the time Mr. Hatley reaches age sixty-five,
discounted to present value at the time of payment using a
discount rate selected by the Plan Administrator. This benefit
is payable in a single lump sum within three days after Mr.
Hatleys Separation from Service. If Mr. Hatley is age
sixty-five or older and his Separation from Service occurs
within two years after a Change in Control, then Mr. Hatley
will be entitled to an annual benefit payment of $120,000, paid
in equal monthly installments for a period of twenty years
following his Separation from Service, regardless of whether
the Separation from Service is voluntary or involuntary for any
reason other than Termination for Cause. If a Change in Control
occurs after Separation from Service but while Mr. Hatley is
receiving payments or is entitled to receive certain payments
under the restated agreement, then Mr. Hatley will receive any
remaining payments in a single lump sum within three days after
the Change in Control.
termination without Cause or a Voluntary Termination with Good
Reason, in either case within two years after a Change in
Control, then the amount of the annual benefit will be the
Accrual Balance at the time Mr. Hatley reaches age sixty-five,
discounted to present value at the time of payment using a
discount rate selected by the Plan Administrator. This benefit
is payable in a single lump sum within three days after Mr.
Hatleys Separation from Service. If Mr. Hatley is age
sixty-five or older and his Separation from Service occurs
within two years after a Change in Control, then Mr. Hatley
will be entitled to an annual benefit payment of $120,000, paid
in equal monthly installments for a period of twenty years
following his Separation from Service, regardless of whether
the Separation from Service is voluntary or involuntary for any
reason other than Termination for Cause. If a Change in Control
occurs after Separation from Service but while Mr. Hatley is
receiving payments or is entitled to receive certain payments
under the restated agreement, then Mr. Hatley will receive any
remaining payments in a single lump sum within three days after
the Change in Control.
If the Separation from Service is due to Mr. Hatleys Disability
and occurs before he reaches age sixty-five, then the amount of
the annual benefit will be limited to the Accrued Benefit as of
the month-end prior to the Separation from Service and will
commence after Mr. Hatley reaches age sixty-five.
and occurs before he reaches age sixty-five, then the amount of
the annual benefit will be limited to the Accrued Benefit as of
the month-end prior to the Separation from Service and will
commence after Mr. Hatley reaches age sixty-five.
In the event of Mr. Hatleys death, his beneficiary will
generally be entitled to a lump sum cash payment equal to the
Accrual Balance at the time of death.
generally be entitled to a lump sum cash payment equal to the
Accrual Balance at the time of death.
Mr. Hatley is fully vested in the Accrued Benefit under the
restated agreement.
restated agreement.
Restated Salary Continuation Agreement with Matthew C. Davis.
On December 29, 2016, the Bank entered into a restated Salary
Continuation Agreement with Matthew C. Davis, its executive
vice president and chief operating officer. The restated
agreement replaced the Banks Amended and Restated Salary
Continuation Agreement with Mr. Davis, which was effective
December 27, 2013, and amended effective May 20, 2014. The
prior agreement and amendment were filed as Exhibits 10.7.1 and
10.7.2, respectively, to the Registration Statement. The
restated agreement became effective January 1, 2017.
On December 29, 2016, the Bank entered into a restated Salary
Continuation Agreement with Matthew C. Davis, its executive
vice president and chief operating officer. The restated
agreement replaced the Banks Amended and Restated Salary
Continuation Agreement with Mr. Davis, which was effective
December 27, 2013, and amended effective May 20, 2014. The
prior agreement and amendment were filed as Exhibits 10.7.1 and
10.7.2, respectively, to the Registration Statement. The
restated agreement became effective January 1, 2017.
The terms of Mr. Daviss restated agreement are identical to Mr.
Hatleys restated agreement described above, with the following
exceptions:
Hatleys restated agreement described above, with the following
exceptions:
The annual benefit payment is $100,000.
The amount of the benefit payment will not be increased in
the event Separation from Service occurs after Mr. Davis
reaches age sixty-five.
the event Separation from Service occurs after Mr. Davis
reaches age sixty-five.
Mr. Davis is fully vested in the Accrued Benefit under the
restated agreement.
restated agreement.
New Salary Continuation Agreement with Matthew C. Davis. On
December 29, 2016, the Bank also entered into a new Salary
Continuation Agreement with Mr. Davis. The new agreement became
effective on January 1, 2017.
December 29, 2016, the Bank also entered into a new Salary
Continuation Agreement with Mr. Davis. The new agreement became
effective on January 1, 2017.
The terms of the new agreement are identical to Mr. Daviss
restated agreement described above, with the following
exceptions:
restated agreement described above, with the following
exceptions:
The annual benefit payment is $32,000.
The Accrued Benefit vests over a period of ten years from
January 1, 2017. The Initial Vesting Date is December 31,
2022. If Separation from Service occurs before the
Initial Vesting Date, then Mr. Davis is 0% vested in the
Accrued Benefit. Twenty percent of the Accrued Benefit
vests on each of December 31, 2022, 2023, 2024, 2025, and
2026. Mr. Davis will be fully vested if Separation from
Service occurs on or after December 31, 2026.
January 1, 2017. The Initial Vesting Date is December 31,
2022. If Separation from Service occurs before the
Initial Vesting Date, then Mr. Davis is 0% vested in the
Accrued Benefit. Twenty percent of the Accrued Benefit
vests on each of December 31, 2022, 2023, 2024, 2025, and
2026. Mr. Davis will be fully vested if Separation from
Service occurs on or after December 31, 2026.
Restated Salary Continuation Agreement with Steven E. Crouse.
On December 29, 2016, the Bank entered into a restated Salary
Continuation Agreement with Steven E. Crouse, its executive
vice president and chief financial officer. The restated
agreement replaced the Banks Amended and Restated Salary
Continuation Agreement with Mr. Crouse, which was effective
December 27, 2013, and amended effective May 20, 2014. The
prior agreement and amendment were filed as Exhibits 10.8.1
and 10.8.2, respectively, to the Registration Statement. The
restated agreement became effective January 1, 2017.
On December 29, 2016, the Bank entered into a restated Salary
Continuation Agreement with Steven E. Crouse, its executive
vice president and chief financial officer. The restated
agreement replaced the Banks Amended and Restated Salary
Continuation Agreement with Mr. Crouse, which was effective
December 27, 2013, and amended effective May 20, 2014. The
prior agreement and amendment were filed as Exhibits 10.8.1
and 10.8.2, respectively, to the Registration Statement. The
restated agreement became effective January 1, 2017.
The terms of Mr. Crouses restated agreement are identical to
Mr. Hatleys restated agreement described above, with the
following exceptions:
Mr. Hatleys restated agreement described above, with the
following exceptions:
The annual benefit payment is $132,000.
The amount of the benefit payment will not be increased
in the event Separation from Service occurs after Mr.
Crouse reaches age sixty-five.
in the event Separation from Service occurs after Mr.
Crouse reaches age sixty-five.
Mr. Crouse is fully vested in the Accrued Benefit under the
restated agreement.
restated agreement.
Item 9.01
Financial Statements and Exhibits.
(d)
Exhibits.
|
Exhibit No.
|
Description of Exhibit
|
|
|
10.1
|
Second Amendment to Employment Agreement with Robert
C. Hatley, effective December 29, 2016 |
|
|
10.2
|
Restated Salary Continuation Agreement with Robert C.
Hatley, effective January 1, 2017 |
|
|
10.3
|
Restated Salary Continuation Agreement with Matthew
C. Davis, effective January 1, 2017 |
|
|
10.4
|
Salary Continuation Agreement with Matthew C. Davis,
effective January 1, 2017 |
|
|
10.5
|
Restated Salary Continuation Agreement with Steven E.
Crouse, effective January 1, 2017 |