8-K Employment Agreements

0000764811-14-000087.txt : 20141006 0000764811-14-000087.hdr.sgml : 20141006 20141006133633 ACCESSION NUMBER: 0000764811-14-000087 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20141001 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20141006 DATE AS OF CHANGE: 20141006 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CommunityOne Bancorp CENTRAL INDEX KEY: 0000764811 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 561456589 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13823 FILM NUMBER: 141142398 BUSINESS ADDRESS: STREET 1: 1017 E. MOREHEAD STREET STREET 2: SUITE 200 CITY: CHARLOTTE STATE: NC ZIP: 28204 BUSINESS PHONE: 9808196213 MAIL ADDRESS: STREET 1: 1017 E. MOREHEAD STREET STREET 2: SUITE 200 CITY: CHARLOTTE STATE: NC ZIP: 28204 FORMER COMPANY: FORMER CONFORMED NAME: FNB United Corp. DATE OF NAME CHANGE: 20060428 FORMER COMPANY: FORMER CONFORMED NAME: FNB CORP/NC DATE OF NAME CHANGE: 19920703 8-K 1 a8-kemploymentagreements.htm 8-K 8-K Employment Agreements

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 1, 2014

COMMUNITYONE BANCORP

(Exact name of registrant as specified in its charter)



North Carolina	000-13823	56-1456589



(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

1017 East Morehead Street, Charlotte North Carolina 28204

(Address of principal executive offices)

Registrant's telephone number, including area code: (336) 626-8300

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



[	]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[	]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[	]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[	]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) Robert L. Reid Employment Agreement

On October 1, 2014 (“Effective Date”), CommunityOne Bancorp (the "Company") and its subsidiary, CommunityOne Bank, N.A. (the “Bank”), entered into an employment agreement (the "Employment Agreement") with its President and Chief Executive Officer, Robert L. Reid. The Employment Agreement supersedes and replaces Mr. Reid's previous employment agreement with the Company and the Bank, dated October 21, 2011, and is substantially similar to that employment agreement. The Agreement has a three year term (the "Term"), but if not earlier terminated, the Term may be extended for a one year period at each anniversary of the Effective Date; provided that the Board of Directors of the Company and the Bank (the “Board”) shall review whether such an extension is appropriate, taking into consideration all relevant factors, including Mr. Reid’s performance during the previous year, and either the Company and the Bank or Mr. Reid shall provide written notice at least 90 days prior to the anniversary that the extension should not be granted. The Employment Agreement provides Mr. Reid with the following compensation and benefits:


•	Annual base salary of no less than $475,000, subject to periodic adjustment by the Compensation and Nominating Committee of the Board in its sole discretion;


•	Annual cash bonus in a targeted amount of 40% of base salary, with the actual amount to be paid based on the achievement of corporate performance goals and/or other conditions established by the Compensation and Nominating Committee of the Board;


•	Participation in any long-term bonus or incentive plans maintained by the Company for its senior executives;


•	Participation in the Company’s employee medical, dental and life insurance plans and other customary benefit plans (except that Mr. Reid is not eligible to receive medical, dental or life insurance benefits coverage from the Company).

Mr. Reid’s base salary has been set by the Compensation and Nominating Committee at $500,000 annually, effective as of October 1, 2014.

In the event that Mr. Reid’s employment is terminated by the Company without “cause” or by Mr. Reid for “good reason” for other than in connection with a “Change in Control” (as each term is defined in the Employment Agreement”), Mr. Reid is entitled to severance benefits as follows: (a) a cash payment equal to two times the sum of (i) his base salary and (ii) the average of annual bonuses paid for the three most recently completed fiscal years preceding the date of termination; provided, however, that if no annual bonus opportunity was established for Mr. Reid for any fiscal year, the target bonus shall be deemed to be the amount of the annual bonus paid for that year; and (b) accelerated vesting of any equity compensation awards held by him. If Mr. Reid’s employment is terminated by the Company without “cause” or by Mr. Reid for “good reason” in connection with a “Change in Control,” Mr. Reid’s cash payment would be equal to two times the sum of (i) his base salary and (ii) the product of 1/40% x the dollar amount of Mr. Reid’s target bonus, plus he would receive accelerated vesting of any equity compensation awards held by him. If the Company terminates Mr. Reid for cause, the Company will have no obligations to the executive after the date of termination.

During the time Mr. Reid is employed by the Company and the Bank and for twenty four (24) months following termination of his employment without cause or for “good reason” because of a “Change in Control,” or for twelve (12) months following termination of his employment following termination of his employment without cause or for “good reason” for other than a “Change in Control,”

in each case where a severance payment has been made, Mr. Reid may not, without the written consent of the Company or the Bank, directly or indirectly engage in specified competitive activities within the territory where the Company operates and contiguous counties or solicit any Company customer to discontinue using the Company’s the Bank’s or any other affiliate’s services or interfere with or disrupt any relations between the company and its affiliates, and any employee, customer, supplier, principal, distributor lessors or licensors.

If the Company terminates Mr. Reid for “cause” (as defined in the Employment Agreement) after an opportunity to cure, the Company will have no obligations to Mr. Reid after the date of termination.

The preceding description of the Employment Agreement is a summary of its material terms, does not purport to be complete, and is qualified in its entirety by reference to the Employment Agreement, a copy of which is being filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Employment Agreements with other Named Executive Officers

The Company and the Bank also entered into employment agreements on the Effective Date of October 1, 2014 with David L. Nielsen, Chief Financial Officer, Beth S. DeSimone, General Counsel, Angus M. McBryde, III, Treasurer and Gregory P. Murphy, Chief Workout Officer (the “Named Executive Officers”). These employment agreements are substantially similar to their previous agreements. The base salaries are the same as in the previous employment agreement with each Named Executive Officer, but the target bonus percentages were reduced in each case to 35% of base salary. Each employment agreement also has substantially the same terms, including a renewal, termination, severance and non-compete provisions as that provided in Mr. Reid's Employment Agreement. The preceding description of the employment agreements of the Named Executive Officers is a summary of each agreement’s material terms, does not purport to be complete, and is qualified in its entirety by reference to the copy of the form employment agreement which is being filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

In addition to entering into employment contracts, the Board on October 1, 2014 granted Messrs. Reid, Nielsen, McBryde and Murphy and Ms. DeSimone restricted stock and stock options under the 2012 Incentive Plan. A copy of the form of Restricted Stock Agreement and Stock Option Agreement for issuances to the Named Executive Officers under the 2012 Incentive Plan are filed as Exhibit 10.3 and 10.4, respectively, to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibits are filed herewith:



Number	Description
10.1	Employment Agreement, dated October 1, 2014, by and between CommunityOne Bancorp, CommunityOne Bank, N.A. and Robert L. Reid
10.2	Form of Employment Agreement, dated October 1, 2014, by and between CommunityOne Bancorp, CommunityOne Bank, N.A. and Named Executive Officers
10.3	Form of Restricted Stock Agreement under the 2012 Incentive Plan
10.4	Form of Stock Option Agreement under the 2012 Incentive Plan

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



October 6, 2014		COMMUNITYONE BANCORP
(Date)		(Registrant)

		/s/ David L. Nielsen
		David L. Nielsen
		Chief Financial Officer

EXHIBIT INDEX

(d) Exhibits

The following exhibits are filed herewith:



Number	Description
10.1	Employment Agreement, dated October 1, 2014, by and between CommunityOne Bancorp, CommunityOne Bank, N.A. and Robert L. Reid
10.2	Form of Employment Agreement, dated October 1, 2014, by and between CommunityOne Bancorp, CommunityOne Bank, N.A. and Named Executive Officers
10.3	Form of Restricted Stock Agreement under the 2012 Incentive Plan
10.4	Form of Stock Option Agreement under the 2012 Incentive Plan

EX-10.1 2 a8kempagrmntsex101.htm EMPLOYMENT AGREEMENT 8K Emp Agrmnts Ex 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 1, 2014 by and among CommunityOne Bancorp, a North Carolina corporation (the “Company”), CommunityOne Bank, National Association, a national banking association (the “Bank”), and Robert L. Reid (the “Executive”).

WHEREAS, the Company and the Bank are committed to sound compensation practices designed to encourage their executive officers and employees to adopt best risk management practices and ensure the safety and soundness of the Bank;

WHEREAS, the Company, the Bank, and the Executive intend that this Agreement meet the requirements of applicable laws regarding executive compensation;

WHEREAS, the Company and the Bank desire to retain the Executive to provide management services to the Company and the Bank on the terms and conditions set forth in this Agreement, and the Executive desires to provide such services on such terms and conditions;

WHEREAS, the parties specifically intend that this Agreement replace in its entirety the Employment Agreement the Company, the Bank and the Executive, dated October 21, 2011; and

WHEREAS, this Agreement has been specifically reviewed and approved by the Board of Directors of the Company (the “Company Board”) and the Board of Directors of the Bank (the “Bank Board”).

NOW, THEREFORE, in consideration of the terms and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.Services, Duties and Responsibilities.

(a)The Company hereby agrees to employ the Executive as its President and Chief Executive Officer during the service period fixed by Section 4 hereof (the “Service Period”) and the Bank hereby agrees to employ the Executive as its President and Chief Executive Officer during the Service Period. At all times during the Service Period, the Executive shall be the President and Chief Executive Officer of the Company and the Bank. The Executive shall report to the Company Board and the Bank Board and shall have such duties and responsibilities as are consistent with the positions of President and Chief Executive Officer of a bank holding company and a community bank of similar size and complexity as the Company and the Bank, respectively (the “Services”). The Executive’s principal work location shall be at the Company’s principal executive offices; provided that the Executive may be required to travel as reasonably necessary in order to perform his duties and responsibilities hereunder.

(b)During the Service Period, excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote substantially all of the Executive’s working time, energy and attention to the performance of his duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business of the Company and the Bank.

(c)During the Service Period, the Executive may not, without the prior written consent of the Company Board, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of competitive business or service (other than as an executive of the Company and the Bank); provided that the Executive may, to

Exhibit 10.1

the extent not otherwise prohibited by this Agreement, devote such amount of time as does not interfere or compete with the performance of the Executive’s duties under this Agreement to any one or more of the following activities: (i) investing the Executive’s and his family’s personal assets in such manner as will not require significant services to be rendered by the Executive in the operation of the affairs of the companies in which investments are made; and (ii) engaging in community and charitable activities.

2.Compensation.

(a)Base Salary. During the Service Period, the Executive shall be paid an annual base salary of not less than $475,000 for the Executive’s services hereunder, payable in accordance with the normal and customary payroll procedures applicable to the Company’s and the Bank’s senior executives. The Executive’s base salary shall be subject to annual increase (but not decrease) as determined by the Company Board in its discretion (such base salary, as it may be increased from time to time, the “Base Salary”).

(b)Annual Bonuses. For each calendar year during the Service Period, the Executive shall be eligible to receive an annual bonus. The target amount of the annual bonus shall be forty percent (40%) of the Executive’s Base Salary (the “Target Bonus”). The actual amount paid shall be determined based upon the achievement of corporate performance goals and/or other conditions that are established by the Compensation Committee of the Company Board, and may be less than or greater than the Target Bonus; provided, however, that in no event will Executive’s annual bonus exceed an amount that is two hundred percent (200%) of the Executive’s Base Salary. The Executive’s annual bonus for a calendar year shall be paid as soon as practicable after the close of the calendar year but not later than March 15 of the following calendar year. The payment or accrual of bonuses under this Section 2(b) shall in all events be subject to compliance with Section 13(a) hereof.

(c)Long-Term Compensation. The Executive shall be eligible to participate in all of the Company’s long term cash and equity award and equity based grant programs applicable to other senior executive officers of the Company and the Bank, in accordance with the terms and conditions of such plans. Such participation shall in all events be subject to compliance with Section 13(a) hereof.

(d)Other Benefits. Except as otherwise provided herein, the Executive shall be eligible to participate in all employee benefit plans and arrangements of the Company, the Bank or any of their affiliates applicable to other senior executive officers (including, without limitation, disability insurance, and fringe benefit and perquisite programs). Notwithstanding the foregoing, at no time during the Service Period or thereafter shall the Executive or the Executive’s family be eligible to receive any medical, dental, and/or life insurance benefits or coverage under any plan, policy or program sponsored, maintained, or provided by the Company, the Bank or any of their affiliates.

(e)Vacation. The Executive shall be entitled to five (5) weeks of vacation in each calendar year.

3.Reimbursement for Business Expenses.

The Company or the Bank, as applicable, shall promptly reimburse the Executive for all reasonable out-of-pocket business expenses and travel expenses incurred by the Executive in connection with the carrying out of the Executive’s responsibilities under this Agreement during the Service Period (the “Out-of-Pocket Expenses”) upon presentation of appropriate vouchers or other satisfactory evidence thereof and otherwise in accordance with applicable Company and Bank policies.

Exhibit 10.1

4.Service Period.

(a)Term. The Service Period during which the Executive shall perform the Services for the Company and the Bank under this Agreement shall commence on the Effective Date and shall expire at the close of business at the end of the calendar year three (3) years from the Effective Date, subject to earlier termination or extension as provided herein. As used in this Agreement, Effective Date means October 1, 2014. If not earlier terminated, on each anniversary of the Effective Date, the Service Period shall be extended for a period of one year in addition to the then-remaining Service Period; provided that, neither the Company and the Bank, on the one hand, nor the Executive on the other hand, has given notice in writing to the other party at least 90 days prior to such anniversary that the Service Period shall not be so further extended, and provided further, that prior to the 90 day period, the Company Board and the Bank Board shall review whether such an extension is appropriate, taking into consideration all relevant factors, including the Executive’s performance hereunder during the previous year.

(b)Termination. Notwithstanding the foregoing, the Service Period may be terminated at any time upon the earliest to occur of the following events or any of the events listed in Section 7:

(i)Death or Disability. The Service Period shall terminate upon the Executive’s death or Disability. For this purpose, “Disability” means that either (i) the Executive is deemed disabled for purposes of any group or individual long-term disability policy paid for by the Company or the Bank that covers the Executive, or (ii) in the good faith judgment of the Company Board, the Executive is substantially unable to perform the Executive’s duties under this Agreement for more than ninety (90) days, whether or not consecutive, in any twelve (12) month period, by reason of a physical or mental illness or injury.

(ii)Termination for Cause by the Company. The Company may terminate the Service Period for Cause. For purposes of this Agreement, the term “Cause” shall mean, when used in connection with the termination of the Service Period, the termination of the Service Period on account of (A) the Executive’s incompetence or dishonesty in his performance of, deliberate neglect of, willful malfeasance or misconduct in connection with the performance of, or continued failure to substantially perform, duties reasonably assigned to the Executive by the Company Board or the Bank Board which are in the interests of the Company or the Bank and consistent with the Executive’s obligations hereunder; (B) the Executive’s material breach of this Agreement or any material written Company policy; (C) the Executive’s willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order; or (D) an act or acts on Executive’s part constituting (x) a felony or (y) a misdemeanor involving a Presumptive Disqualifier (as defined below) by the Executive; provided that, within thirty (30) days following the Company’s knowledge of the occurrence of any of the events set forth herein, the Company shall have delivered written notice to the Executive of its intention to terminate the Service Period for Cause, which notice specifies in reasonable detail the circumstances claimed to give rise to the Company’s right to terminate the Service Period for Cause and, solely to the extent such circumstances are capable of being cured, in the reasonable judgment of the Board, the Executive shall not have cured such circumstances within ten (10) business days following the Executive’s receipt of such notice. “Presumptive Disqualifier” means (i) fraud, moral turpitude, dishonesty, breach of trust or fiduciary duties, organized crime or racketeering; (ii) violation of securities or commodities laws or regulations; (iii) violation of depository institution laws or regulations; (iv) violation of housing authority laws or regulations; or (v) violation of the rules, regulations, codes of conduct or ethics of a self-regulatory trade or professional organization.

Exhibit 10.1

(iii)Termination without Cause by the Company. The Company may terminate the Service Period without Cause.

(iv)Termination by the Executive for Good Reason. The Executive may terminate the Service Period for Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean, when used in connection with the termination of the Service Period, unless the Executive shall have consented in writing thereto, (i) a material diminution in the Executive’s duties and responsibilities or authority, or any material adverse change in the Executive’s base compensation; (ii) a relocation of the Executive’s primary work location more than thirty (30) miles from Asheboro, North Carolina (provided that the relocation of the Executive’s primary work location to Charlotte, North Carolina or a location within thirty (30) miles of Charlotte North Carolina shall not constitute “Good Reason”); (iii) any material breach of this Agreement by the Company or the Bank; or (iv) a Change of Control; provided that the Executive shall have delivered written notice to the Company, within one hundred and twenty (120) days of the initial existence of any of the circumstances described in clauses (i) through (iii) giving rise to Good Reason, or within twenty-four (24) months of a Change in Control, of the Executive’s intention to terminate the Service Period for Good Reason, which notice specifies in reasonable detail the circumstances claimed to give rise to the Executive’s right to terminate the Service Period for Good Reason, and the Company or the Bank shall not have cured such circumstances within thirty (30) days following the Company’s receipt of such notice. If, following such thirty (30) day period, the Company or the Bank has not cured such circumstances and Executive decides to proceed with the termination of the Service Period for Good Reason, such a termination will be effected by providing the Company with a Notice of Termination. For purposes of this Section 4(b)(iv), any good faith determination of “Good Reason” made by the Executive shall be conclusive.

(v)Voluntary Termination by the Executive. The Executive may voluntarily terminate the Service Period (other than for Good Reason); provided that the Executive provides the Company with notice of the Executive’s intent to terminate the Service Period at least thirty (30) days in advance of the Date of Termination.

(vi) Change of Control. “Change of Control” means, and shall be deemed to have occurred, if:

(A) any Person, other than (i) any employee benefit plans of the Company, the Bank, or any of their affiliates or (ii) the Recapitalization Investors, is or becomes the “beneficial owner” (as defined in Rules 13d 3 and 13d 5 under the Exchange Act, which Rules shall apply for purposes of this clause (A) whether or not the Company is subject to the Exchange Act), directly or indirectly, of Company securities representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities (“Voting Power”) if, at such time, the Voting Power represented by Company securities beneficially owned by such Person exceeds the Voting Power represented by the Company securities beneficially owned by either of the Recapitalization Investors;

(B) the Company consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Company (a “Fundamental Transaction”) with any other corporation, other than a Fundamental Transaction that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least sixty percent (60%) of the combined Voting Power immediately after such Fundamental Transaction of (i) the Company’s outstanding securities, (ii) the surviving entity’s outstanding securities, or (iii) in the case of a division, the outstanding securities of each entity resulting from the division;

Exhibit 10.1

(D) the consummation of a sale or disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets; or

(E) during any period of twenty-four (24) consecutive months, individuals who at the beginning of such period constituted the Company Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two thirds (2/3) of the Company Board members then still in office who were directors at the beginning of such period or whose appointment, election or nomination was previously so approved or recommended) cease for any reason to constitute at least a majority of the Company Board.

“Recapitalization Investors” means the Carlyle Investor (including its affiliates) and the Oak Hill Investor (including its affiliates); “Person” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof; and “Exchange Act” means the Securities Exchange Act of 1934, as amended.

5.Termination Procedure.

(a)Notice of Termination. Any termination of the Service Period by the Company or by the Executive (other than a termination on account of the Executive’s death) shall be communicated by written “Notice of Termination” to the other party in accordance with Section 13(d).

(b)Date of Termination. “Date of Termination” shall mean (i) if the Service Period expires pursuant to Section 4(a) hereof, the date on which the expiration of the Service Period occurs; (ii) if the Service Period is terminated due to the Executive’s death or Disability, the date of the Executive’s death or Disability; (iii) if the Company terminates the Service Period for Cause, the date specified in the Notice of Termination; (iv) if the Executive terminates the Service Period for Good Reason, the date on which the Notice of Termination is given; (v) if the Executive voluntarily terminates the Service Period (other than for Good Reason), the date specified in the Notice of Termination, which date shall be no earlier than thirty (30) days after the date such notice is given pursuant to Section 4(b)(v) hereof; and (vi) if the Service Period is terminated for any other reason, the date on which a Notice of Termination is given or any later date (within thirty (30) days, or any alternative time period agreed upon by the parties, after the giving of such notice) as set forth in such Notice of Termination.

6.Rights and Obligations Upon Termination of the Service Period.

(a)Termination by the Company without Cause or by the Executive for Good Reason in Connection with a Change in Control. In the event of the termination of the Service Period by the Company without Cause or by the Executive for Good Reason upon or within two years following a Change in Control, and to the extent not otherwise limited or prohibited under the FDIC Golden Parachute Rules or any other applicable law or regulation, the Bank shall pay the Executive: (i) any unpaid portion of the Base Salary through the Date of Termination; (ii) any annual bonus for the prior fiscal year which remains unpaid; (iii) any reimbursement for Out-of-Pocket Expenses incurred in connection with the Services (to the extent that appropriate vouchers or other satisfactory evidence of the expense in accordance with Company and Bank policies is presented to the Bank within thirty (30) days following the Date of Termination); and (iv) the Executive’s accrued but unused vacation through the Date of Termination (collectively the “Accrued Obligations”). In addition, the Bank shall pay the Executive, a

Exhibit 10.1

lump sum cash payment equal to the product of (x) two (2) and (y) the sum of (i) the Base Salary and (ii) (1/Target Bonus percentage) x (dollar amount of the Executive’s Target Bonus) (such product, the “CIC Severance Payment”). In addition, as of such Date of Termination, any (I) outstanding but unexercised stock options held by the Executive under any of the Company’s equity-based incentive plans at such time will become immediately exercisable and will continue to be exercisable for the remaining original term thereof, and (II) any unvested restricted stock held by Executive under such Company plans will become immediately vested and free of all restrictions. The Accrued Obligations and the CIC Severance Payment shall be paid within thirty (30) days following the Date of Termination. For purposes of this Section 6, if the Company terminates the Service Period without Cause or the Executive terminates the Service Period for Good Reason, in either case prior to a Change in Control but while the Company and/or the Bank is a party to an agreement the consummation of which would constitute a Change in Control, such termination of the Service Period shall be deemed to have occurred upon the occurrence of a Change in Control (whether or not a Change in Control ever occurs) such that this Section 6(a) shall apply with respect to such termination of the Service Period.

This Section 6(a) does not limit the entitlement of the Executive’s estate or beneficiaries to any death or other vested benefits to which the Executive may be entitled under any other compensation (excluding any severance compensation), equity-based grant or employee benefit plan, program or policy that is maintained by the Company, the Bank, or any of their affiliates for the Executive’s benefit (the “Company Plans”).

(b)Termination by the Company without Cause or by the Executive for Good Reason (other than in connection with a Change in Control). In the event of the termination of the Service Period by the Company without Cause or by the Executive for Good Reason other than upon or within two years following a Change in Control, and to the extent not otherwise limited or prohibited under the FDIC Golden Parachute Rules or any other applicable law or regulation, the Bank shall pay the Executive: (i) any unpaid portion of the Base Salary through the Date of Termination; (ii) any annual bonus for the prior fiscal year which remains unpaid; (iii) any reimbursement for Out-of-Pocket Expenses incurred in connection with the Services (to the extent that appropriate vouchers or other satisfactory evidence of the expense in accordance with Company and Bank policies is presented to the Bank within thirty (30) days following the Date of Termination); and (iv) the Executive’s accrued but unused vacation through the Date of Termination (collectively the “Accrued Obligations”). In addition, the Bank shall pay the Executive, a lump sum cash payment equal to the product of (x) two (2) and (y) the sum of (i) the Base Salary and (ii) the Average Annual Bonus (such product, the “Non-CIC Severance Payment”). In addition, as of such Date of Termination, any (I) outstanding but unexercised stock options held by the Executive under any of the Company’s equity-based incentive plans at such time will become immediately exercisable and will continue to be exercisable for the remaining original term thereof, and (II) any unvested restricted stock held by Executive under such Company plans will become immediately vested and free of all restrictions. The Accrued Obligations and the Non-CIC Severance Payment shall be paid within thirty (30) days following the Date of Termination. For purposes of this Section 6(b), “Average Annual Bonus” means the average of the annual bonuses paid (including any bonus paid as a part of the Accrued Obligations and for sake of clarity not taking into account any reductions for withholding taxes and similar amounts) for the three most recently completed fiscal years preceding the Date of Termination; provided, however, that if the no annual bonus opportunity was established for the Executive for any such fiscal year (as the result of restrictions imposed due to the Company’s participation in the Troubled Asset Relief Program (“TARP”) or for any other reason) the Target Bonus shall be deemed to be the amount of the annual bonus paid for such fiscal year.

Exhibit 10.1

This Section 6(b) does not limit the entitlement of the Executive’s estate or beneficiaries to any death or other vested benefits to which the Executive may be entitled under any other compensation (excluding any severance compensation), equity-based grant or employee benefit plan, program or policy that is maintained by the Company, the Bank, or any of their affiliates for the Executive’s benefit (the “Company Plans”).

(c)Death or Disability. If the Service Period is terminated as a result of the Executive’s Disability or death, the Bank shall pay to the Executive or the Executive’s estate or beneficiaries, as the case may be, within thirty (30) days following the Date of Termination the Accrued Obligations. This Section 6(c) does not limit the entitlement of the Executive’s estate or beneficiaries to any death or other vested benefits to which the Executive may be entitled under the Company Plans.

(d)Termination Upon the Expiration of the Service Period or by the Company for Cause or by the Executive Voluntarily. If the Service Period expires pursuant to Section 4(a) hereof or is terminated by the Company for Cause or voluntarily by the Executive (other than for Good Reason), the Bank shall pay the Executive within thirty (30) days following the Date of Termination the Accrued Obligations. This Section 6(d) does not limit the entitlement of the Executive’s estate or beneficiaries to any death or other vested benefits to which the Executive may be entitled under the Company Plans.

7. Other Termination Provisions.

(a)If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), the Company’s and the Bank’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company or the Bank (as applicable) may in their discretion (but subject in all events to the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) (i) pay the Executive all or part of the compensation withheld while its obligations under this Agreement were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

(b)If the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) or (g)(1)), all obligations of the Company and the Bank under this Agreement shall terminate as of the effective date of the order, but vested benefits to which the Executive may be entitled under this Agreement or any of the Company Plans shall not be affected.

(c)If the Bank is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x)(1)), all obligations under this Agreement shall terminate as of the date of default, but vested benefits to which the Executive may be entitled under this Agreement or any of the Company Plans shall not be affected.

8. Non-Solicitation and Non-Competition.

(a)During the period of the Executive’s employment by the Company or the Bank or both, whether pursuant to this Agreement or otherwise, and, in the case of a termination of the Executive’s employment with the Company and the Bank without Cause or voluntarily by the Executive for Good Reason because of a Change in Control and the CIC Severance Payment (as calculated in Section 6(a) herein) has been paid, for the twenty-four (24) month period following the termination of the Executive’s

Exhibit 10.1

employment with the Company and the Bank, or in the case of a termination of the Executive’s employment with the Company and the Bank without Cause or voluntarily by the Executive for Good Reason for other than a Change in Control, for the twelve (12) month period following the termination of the Executive’s employment with the Company and the Bank and the Non-CIC Severance Payment (as calculated in Section 6(b) herein) has been paid, the Executive will not, without the written consent of the Company or the Bank, directly or indirectly, own any interest in, manage, operate, control, be employed by, render consulting or advisory services to, or participate in or be connected with the management or control of any business that is then engaged, or proposing to engage, in the operation of a Competing Business in the Territory. For purposes of this Agreement, “Competing Business” means banking and other financial services businesses, including commercial banks, savings banks, credit unions, mortgage companies, savings and loan associations, trust companies, investment advisory or sales businesses, any similar financial institutions, or any other business in which the Company, the Bank or any of their affiliates is engaged, or is contemplating becoming engaged, at the time of termination of the Executive’s employment; and “Territory” means the counties in which the Company, the Bank or any of their affiliates conducts operations as of the Effective Date and any other counties added during the period of the Executive’s employment with the Company or the Bank by the Company’s or the Bank’s (or any of their respective affiliates’) conducting operations therein, plus any counties contiguous to those counties; provided, however, that the Executive may, without violating this Agreement, (A) own as a passive investment not in excess of one percent (1%) of the outstanding capital stock or other equity interests of a corporation or other entity whose shares or other equity interests are publicly traded on an established securities market, or (B) be employed following the termination of his employment with the Company and the Bank by any entity engaged in a Competing Business in the Territory if the Executive’s duties, activities and responsibilities for such entity are wholly unrelated to those duties, activities and responsibilities performed by the Executive for the Company, the Bank or their affiliates hereunder.

(b)During the period of the Executive’s employment by the Company or the Bank or both, whether pursuant to this Agreement or otherwise, and for the twenty-four (24) month period (in the event of a termination of employment without Cause or voluntarily by the Executive for Good Reason because of a Change in Control) or twelve (12) month period (in the event of a termination of employment without Cause or voluntarily by the Executive for Good Reason other than because of a Change in Control), as the case may be, following the termination of the Executive’s employment with the Company and the Bank, the Executive will not, without the written consent of the Company or the Bank, directly or indirectly,

i.influence or attempt to influence any customer of the Company, the Bank or any of their affiliates to discontinue its use of the Company’s or the Bank’s (or such affiliate’s) services or to divert such business to any other person, firm or corporation; or

ii.interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company, the Bank or any of their affiliates and any of its respective employees, customers, suppliers, principals, distributors, lessors or licensors. Efforts by the Executive, whether direct or indirect, (A) to solicit or assist any other person or entity in soliciting any employee of the Company, the Bank, or any of their affiliates to perform services for any entity (other than the Company, the Bank, or any of their affiliates) or (B) to encourage any employee of the Company, the Bank, or any of their affiliates to leave their employment with the Company, the Bank, or any of their affiliates shall be in violation of this Section 8(b). A person’s response to a broad and general advertisement or solicitation not specifically targeting or intending to target employees of the Company, the Bank, or any of their affiliates shall not be deemed a violation of this Section 8(b).

Exhibit 10.1

(c)In the event the Executive breaches any of the provisions contained in Section 8(a) or (b) and the Company or the Bank seeks compliance with such provisions by judicial proceedings, the time period during which the Executive is restricted by such provisions shall be extended by the time during which the Executive has actually competed with the Company, the Bank or any of their affiliates or been in violation of any such provision and any period of litigation required to enforce the Executive’s obligations under this Agreement.

(d)The Company and the Bank intend that Section 8 of this Agreement be enforced as written. However, if one or more of the provisions contained in Section 8 shall for any reason be held to be unenforceable because of the duration or scope of such provision or the area covered thereby, the Executive and the Company agree that the court making such determination shall have the full power to reform, by “blue penciling” or any other means, the duration, scope and/or area of such provision and in its reformed form such provision shall then be enforceable and shall be binding on the parties.

(e)Notwithstanding anything the contrary herein, in the event that the Company terminates the Service Period without Cause or the Executive terminates the Service Period for Good Reason, the restrictions imposed by Section 8(a) shall not apply to the Executive after termination of the Service Period to the extent that the Executive does not receive payment of the CIC Severance Payment or the Non-CIC Severance Payment, as the case may be, by reason of the limitations set forth in Section 13(a) hereof.

9. Confidentiality; Non-Disclosure.

(a)The Executive hereby agrees that, during the Service Period and thereafter, he will hold in strict confidence any proprietary or Confidential Information related to the Company, the Bank, or any of their affiliates. For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company, the Bank, or any of their affiliates (in whatever form) that is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or trade secrets.

(b)The Executive hereby agrees that upon the termination of the Service Period, he shall not take, without the prior written consent of the Company, any business plans, strategic plans or reports or other document (in whatever form) of the Company, the Bank or any of their affiliates, which is of a confidential nature relating to the Company, the Bank, or any of their affiliates. Notwithstanding the foregoing, the Executive may retain his personal Rolodex and similar electronic or written phone directories to the extent the foregoing does not contain Confidential Information (other than names, addresses, telephone numbers and similar contact information).

10. Injunctive Relief.

It is impossible to measure in money the damages that will accrue to the Company, the Bank, and their affiliates in the event that the Executive breaches any of the restrictive covenants set forth in Sections 8 and 9 (the “Restrictive Covenants”). In the event that the Executive breaches any of the Restrictive Covenants, the Company and the Bank shall be entitled to an injunction restraining the Executive from violating such Restrictive Covenant (without posting any bond). If the Company or the Bank shall institute any action or proceeding to enforce any such Restrictive Covenant, the Executive hereby waives the claim or defense that the Company, the Bank or any of their affiliates has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company, the Bank, or any of their affiliates has an adequate remedy at law.

Exhibit 10.1

11. Representations.

Each party hereto represents and warrants to the other parties hereto that (a) the execution, delivery and performance by such party of this Agreement has been duly authorized by all necessary action on its part and does not and will not contravene or conflict with any provisions of any agreement or other instrument to which it is a party or by which it is bound or any applicable law, judgment, order, writ, injunction, decree, rule or regulation of any court, governmental authority, administrative agency or arbitrator, (b) this Agreement is the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms and (c) there is no pending or threatened action or proceeding affecting such party before or by any court, governmental authority, administrative agency or arbitrator, which if adversely determined, would prevent such party from performing its obligations hereunder.

12. Legal Fees.

The Company or the Bank shall reimburse the Executive for legal fees reasonably incurred by the Executive in connection with the negotiation and execution of this Agreement, subject to a cap of $20,000. In the event of a contest or dispute among the parties with respect to this Agreement, each of the parties shall be responsible for its respective legal fees and expenses; provided that, if the Executive substantially prevails in a contest or dispute for amounts allegedly owed but not paid by the Company or the Bank, the Company and the Bank shall reimburse the Executive for all reasonable legal fees and expenses incurred by the Executive in connection with such contest or dispute.

13. Miscellaneous.

(a)Notwithstanding anything herein to the contrary: (i) any payments made to the Executive pursuant to this Agreement or otherwise are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and 12 C.F.R. Part 359 regarding golden parachute and indemnification payments (the “FDIC Golden Parachute Rules”); and (ii) no payment or benefit shall be paid or provided under this Agreement or otherwise to the extent that it would violate any agreement between or among the Company and/or the Bank and the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency or any other governmental entity or agency.

(b)This Agreement is intended to comply with the requirements of Section 409A of the Code (including the exceptions thereto), to the extent applicable, and the Company shall administer and interpret this Agreement in accordance with such requirements. If any provision contained in the Agreement conflicts with the requirements of Section 409A of the Code (or the exemptions intended to apply under the Agreement), the Agreement shall be deemed to be reformed to comply with the requirements of Section 409A of the Code (or the applicable exemptions thereto). Notwithstanding anything to the contrary herein, for purposes of determining the Executive’s entitlement to the CIC Severance Payment or the Non-CIC Severance Payment, as the case may be, to the extent subject to Section 409A of the Code, (i) the Service Period shall not be deemed to have terminated unless and until the Executive incurs a “separation from service” as defined in Section 409A of the Code, and (ii) the term “Date of Termination” shall mean the effective date of the Executive’s separation from service. Reimbursement of any expenses provided for in this Agreement (including pursuant to Section 12 hereof) shall be made promptly upon presentation of documentation in accordance with the Company’s and the Bank’s policies (as applicable) with respect thereto as in effect from time to time (but in no event later than the end of calendar year following the year such expenses were incurred); provided, however, that in no event shall the amount of expenses eligible for reimbursement hereunder during a calendar year affect the expenses eligible for reimbursement in any other taxable year. Notwithstanding anything to the

Exhibit 10.1

contrary herein, if a payment or benefit under this Agreement is due to a “separation from service” for purposes of the rules under Treas. Reg. § 1.409A-3(i)(2) (payments to specified employees upon a separation from service) and the Executive is determined to be a “specified employee” (as determined under Treas. Reg. § 1.409A-1(i) and related Company procedures), such payment shall, to the extent necessary to comply with the requirements of Section 409A of the Code, be made on the later of (x) the date specified by the foregoing provisions of this Agreement or (y) the date that is six (6) months after the date of the Executive’s separation from service (or, if earlier, the date of the Executive’s death). Any installment payments that are delayed pursuant to this Section 13(b) shall be accumulated and paid in a lump sum on the first day of the seventh month following the Date of Termination (or, if earlier, upon the Executive’s death) and the remaining installment payments shall begin on such date in accordance with the schedule provided in this Agreement. Each installment of the CIC Severance Payment or the Non-CIC Severance Payment, as the case may be, shall be deemed to be a separate payment for purposes of Section 409A of the Code.

(c)The Company shall reimburse the Bank for compensation or benefits paid or provided by the Bank to the Executive to the extent attributable to the Executive’s performance of services for the Company in accordance with the applicable reimbursement policies of the Company and the Bank.

(d)Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or four (4) days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed as follows (or if it is sent through any other method agreed upon by the parties):

If to the Company:

CommunityOne Bancorp

Attn: Senior Human Resources Officer

150 South Fayetteville Street

Asheboro, North Carolina 27203

If to the Executive:

Robert L. Reid

2111 Radcliffe Ave

Charlotte, North Carolina 28207

the most recent address

on the Company’s employment

records for the Executive

Exhibit 10.1

With a copy to:

Moore & Van Allen PLLC

Attn: Neill G. McBryde

100 North Tryon Street, Suite 4700

Charlotte, North Carolina 28202-4003

or to such other address as any party hereto may designate by notice to the others.

(e)This Agreement shall constitute the entire agreement among the parties hereto with respect to the Service Period hereunder, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to the Service Period.

(f)Only an instrument in writing signed by the parties hereto may amend this Agreement, and any provision hereof may be waived only by an instrument in writing signed by the party or parties against whom or which enforcement of such waiver is sought. The failure of any party hereto at any time to require the performance by any other party hereto of any provision hereof shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision or a waiver of the provision itself or a waiver of any other provision of this Agreement.

(g)This Agreement is binding on and is for the benefit of the parties hereto and their respective successors, assigns, heirs, executors, administrators and other legal representatives. Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive.

(h)The Company and the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or the Bank to assume this Agreement in the same manner and to the same extent that the Company or the Bank would have been required to perform it if no such succession had taken place. As used in this Agreement, “Company” and the “Bank” shall mean both the Company and the Bank as defined above and any such successor (or successors) that assumes this Agreement, by operation of law or otherwise.

(i)Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section 13(i), be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. No waiver of any provision or violation of this Agreement by the Company or the Bank shall be implied by the Company’s or the Bank’s forbearance or failure to take action.

(j)The Company and the Bank may withhold from any amounts payable to the Executive hereunder all federal, state, city or other taxes that the Company or the Bank may reasonably determine are required to be withheld pursuant to any applicable law or regulation (it being understood, that the Executive shall be responsible for payment of all taxes in respect of the payments and benefits provided herein).

Exhibit 10.1

(k)This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, without reference to its principles of conflicts of law.

(l)This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. A facsimile of a signature shall be deemed to be and have the effect of an original signature.

(m)The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

* * * * *

Exhibit 10.1

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

CommunityOne Bancorp

/s/ J. Chandler Martin

Name: J. Chandler Martin

Title: Chairman

CommunityOne Bank, National Association

/s/ J. Chandler Martin

Name: J. Chandler Martin

Title: Chairman

/s/ Robert L. Reid

Robert L. Reid

EX-10.2 3 a8kempagrmntsex102.htm FORM OF EMPLOYMENT AGREEMENT 8K Emp Agrmnts Ex 10.2

Exhibit 10.2

FORM OF EMPLOYMENT AGREEMENT

WHEREAS, the Company, the Bank, and the Executive intend that this Agreement meet the requirements of applicable laws regarding executive compensation;

WHEREAS, the parties specifically intend that this Agreement replace in its entirety the Employment Agreement the Company, the Bank and the Executive, dated October 21, 2011; and

WHEREAS, this Agreement has been specifically reviewed and approved by the Board of Directors of the Company (the “Company Board”) and the Board of Directors of the Bank (the “Bank Board”).

NOW, THEREFORE, in consideration of the terms and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.Services, Duties and Responsibilities.

(a)The Company hereby agrees to employ the Executive as its Chief Financial Officer during the service period fixed by Section 4 hereof (the “Service Period”) and the Bank hereby agrees to employ the Executive as its Chief Financial Officer during the Service Period. At all times during the Service Period, the Executive shall be the Chief Financial Officer of the Company and the Bank. The Executive shall report to the Company Board and the Bank Board and shall have such duties and responsibilities as are consistent with the positions of Chief Financial Officer of a bank holding company and a community bank of similar size and complexity as the Company and the Bank, respectively (the “Services”). The Executive’s principal work location shall be at the Company’s principal executive offices; provided that the Executive may be required to travel as reasonably necessary in order to perform his duties and responsibilities hereunder.

Exhibit 10.2

2.Compensation.

(a)Base Salary. During the Service Period, the Executive shall be paid an annual base salary of not less than $______ for the Executive’s services hereunder, payable in accordance with the normal and customary payroll procedures applicable to the Company’s and the Bank’s senior executives. The Executive’s base salary shall be subject to annual increase (but not decrease) as determined by the Company Board in its discretion (such base salary, as it may be increased from time to time, the “Base Salary”).

(b)Annual Bonuses. For each calendar year during the Service Period, the Executive shall be eligible to receive an annual bonus. The target amount of the annual bonus shall be thirty five percent (35%) of the Executive’s Base Salary (the “Target Bonus”). The actual amount paid shall be determined based upon the achievement of corporate performance goals and/or other conditions that are established by the Compensation Committee of the Company Board, and may be less than or greater than the Target Bonus; provided, however, that in no event will Executive’s annual bonus exceed an amount that is two hundred percent (100%) of the Executive’s Base Salary. The Executive’s annual bonus for a calendar year shall be paid as soon as practicable after the close of the calendar year but not later than March 15 of the following calendar year. The payment or accrual of bonuses under this Section 2(b) shall in all events be subject to compliance with Section 13(a) hereof.

(e)Vacation. The Executive shall be entitled to five (5) weeks of vacation in each calendar year.

3.Reimbursement for Business Expenses.

Exhibit 10.2

4.Service Period.

(b)Termination. Notwithstanding the foregoing, the Service Period may be terminated at any time upon the earliest to occur of the following events or any of the events listed in Section 7:

Exhibit 10.2

(iii)Termination without Cause by the Company. The Company may terminate the Service Period without Cause.

(vi) Change of Control. “Change of Control” means, and shall be deemed to have occurred, if:

Exhibit 10.2

(D) the consummation of a sale or disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets; or

5.Termination Procedure.

6. Rights and Obligations Upon Termination of the Service Period.

Exhibit 10.2

7. Other Termination Provisions.

8. Non-Solicitation and Non-Competition.

Exhibit 10.2

9. Confidentiality; Non-Disclosure.

10. Injunctive Relief.

Exhibit 10.2

11. Representations.

12. Legal Fees.

13. Miscellaneous.

Exhibit 10.2

If to the Company:

CommunityOne Bancorp

Attn: Senior Human Resources Officer

150 South Fayetteville Street

Asheboro, North Carolina 27203

If to the Executive:

the most recent address

on the Company’s employment

records for the Executive

With a copy to:

or to such other address as any party hereto may designate by notice to the others.

Exhibit 10.2

(k)This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, without reference to its principles of conflicts of law.

Exhibit 10.2

(m)The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.

* * * * *

Exhibit 10.2

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

CommunityOne Bancorp

__________________________________

Name:

Title:

CommunityOne Bank, National Association

__________________________________

Name:

Title:

__________________________________

Named Executive Officer

EX-10.3 4 a8kempagrmntsex103.htm FORM OF RESTRICTED STOCK AGREEMENT 8K Emp Agrmnts Ex 10.3

Exhibit 10.3

COMMUNITYONE BANCORP

2012 INCENTIVE PLAN

FORM OF RESTRICTED STOCK AGREEMENT

This Restricted Stock Agreement (the “Agreement”) is effective as of _____________ between CommunityOne Bancorp, a North Carolina corporation (the “Company”), and ___________________ (the “Participant”).

WHEREAS, the Company has established the 2012 Incentive Plan (the “Plan”), pursuant to which the Company may, from time to time, make grants of Restricted Stock to eligible employees and other individuals providing services to the Company or an Affiliate, including CommunityOne Bank, N.A. (as defined in the Plan); and

WHEREAS, in consideration for the Participant’s service to the Company and/or an Affiliate, on October 1, 2014 (the “Grant Date”), the Company granted to the Participant Restricted Stock pursuant to the terms and conditions of the Plan and this Agreement;

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereby agree as follows:

1.Grant of Restricted Stock. Subject to the terms and conditions set forth in this Agreement and the Plan, the Company granted to the Participant _______________ (____) Shares of time vesting Restricted Stock (“Time RSAs”) and ____________(__) Shares of performance vesting Restricted Stock (“Performance RSAs” and together with the Time RSAs, the “Award” or the “Restricted Stock”).

2.Vesting. The Award shall vest according to the vesting schedule below. Vesting on any such date is subject to the Participant’s continued service with the Company or an Affiliate through such date. If the application of the vesting schedule would result in the Participant vesting in a fraction of a share, such fractional share shall be rounded down to the next whole share.

(a)Time RSA Vesting. One-third of the Time RSAs shall vest on the first anniversary of the Grant Date, the second one-third of the Time RSAs shall vest on the second anniversary of the Grant Date, and the final one-third of the Time RSAs shall vest on the third anniversary of the Grant Date.

(b)Performance RSA Vesting. One half of the Performance RSAs shall vest on the first date prior to the seventh anniversary of the Grant Date that the closing price per share of CommunityOne Bancorp common stock achieves an average of $22.00 over a ten consecutive trading day period, and one half of the Performance RSAs shall vest on the first date prior to the seventh anniversary of the Grant Date that the closing price per share of CommunityOne Bancorp common stock achieves an average of $24.00 over a ten consecutive trading day period. Any performance RSAs that have not become vested prior to the seventh anniversary of the Grant Date shall be immediately forfeited on the seventh anniversary of the Grant Date.

3.Termination of Service. Except as provided below, if the Participant incurs a termination of service, all shares of Restricted Stock not vested at the time of such termination shall be immediately and automatically forfeited by the Participant upon such termination of service.

Exhibit 10.3

(a)Death, Disability, or Retirement. In the event of the Participant’s death, Disability, or Retirement (as such terms are defined below) the following provisions shall apply: (i) if such death or Disability (but for sake of clarity, not Retirement) occurs within the twelve-month period prior to the first anniversary of the Grant Date, the Participant shall become immediately vested in one-third of the Award; (ii) if such death, Disability, or Retirement occurs within the twelve-month period prior to the second anniversary of the Grant Date, the Participant shall become immediately vested in two-thirds of the Award; or (iii) if such death, Disability, or Retirement occurs within the twelve-month period prior to the third anniversary of the Grant Date or anytime thereafter, the Participant shall become immediately vested in the full Award.

(b)Termination Without Cause or For Good Reason. In the event that the Company terminates the Participant’s service without Cause or the Participant terminates service for Good Reason (as such terms are defined below), any portion of the Participant’s Award that is unvested shall become immediately vested.

(c)Termination for Cause. Notwithstanding anything herein to the contrary, in the event that the Participant’s service is terminated for Cause, all shares of Restricted Stock not vested at the time of such termination shall be immediately and automatically forfeited by the Participant upon such termination of service.

(d)Change of Control. In the event of a Change in Control, any portion of the Participant’s Award that is unvested shall become immediately vested upon such Change in Control.

(e)Definitions.

(i)Cause. Cause shall mean the termination of the Participant on account of (A) the Participant’s incompetence or dishonesty in his performance of, deliberate neglect of, willful malfeasance or misconduct in connection with the performance of, or continued failure to substantially perform, duties reasonably assigned to the Participant by the Company Board of Directors or any Affiliate Board of Directors which are in the interests of the Company or the Affiliate and consistent with the Participant’s obligations hereunder; (B) the Participant’s material breach of this Agreement or any material written Company policy; (C) the Participant’s willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease‑and‑desist order; or (D) an act or acts on Participant’s part constituting (x) a felony or (y) a misdemeanor involving (a) fraud, moral turpitude, dishonesty, breach of trust or fiduciary duties, organized crime or racketeering; (b) a violation of securities or commodities laws or regulations; (c) a violation of depository institution laws or regulations; (d) a violation of housing authority laws or regulations; or (e) a violation of the rules, regulations, codes of conduct or ethics of a self‑regulatory trade or professional organization.

(ii)Change in Control. “Change in Control” means, and shall be deemed to have occurred, if:

(A)any Person, other than (i) any employee benefit plans of the Company, the Bank, or any of their affiliates or (ii) the Recapitalization Investors, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, which Rules shall apply for purposes of this clause (A) whether or not the Company is subject to the Exchange Act), directly or indirectly, of Company securities representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities (“Voting Power”) if, at such time, the Voting Power represented by Company

Exhibit 10.3

securities beneficially owned by such Person exceeds the Voting Power represented by the Company securities beneficially owned by either of the Recapitalization Investors;

(B)the Company consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Company (a “Fundamental Transaction”) with any other corporation, other than a Fundamental Transaction that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least sixty percent (60%) of the combined Voting Power immediately after such Fundamental Transaction of (i)the Company’s outstanding securities, (ii)the surviving entity’s outstanding securities, or (iii)in the case of a division, the outstanding securities of each entity resulting from the division;

(C)the shareholders of the Company approve a plan of complete liquidation or winding up of the Company;

(D)the consummation of a sale or disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets; or

(E)during any period of twenty-four (24) consecutive months, individuals who at the beginning of such period constituted the Company Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two thirds (2/3) of the Company Board members then still in office who were directors at the beginning of such period or whose appointment, election or nomination was previously so approved or recommended) cease for any reason to constitute at least a majority of the Company Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended. “Person” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof. “Recapitalization Investors” means the Carlyle Investor (including its affiliates) and the Oak Hill Investor (including its affiliates).

(iii)Disability. Disability means that either (i) the Participant is deemed disabled for purposes of any group or individual long‑term disability policy paid for by the Company or its Affiliate that covers the Participant, or (ii) in the good faith judgment of the Company’s Board of Directors, the Participant is substantially unable to perform the Participant’s duties under this Agreement for more than ninety days, whether or not consecutive, in any twelve‑month period, by reason of a physical or mental illness or injury.

(iv)Good Reason. Good Reason means, unless the Participant shall have consented in writing thereto, (i) a material diminution in the Participant’s duties and responsibilities or authority, or any material adverse change in the Participant’s base compensation; (ii) a relocation of the Participant’s primary work location more than thirty miles from Asheboro, North Carolina (provided that the relocation of the Participant’s primary work location to Charlotte, North Carolina or a location within thirty miles of Charlotte, North Carolina shall not constitute “Good Reason”); or (iii) any material breach of this Agreement by the Company; provided that the Participant shall have delivered written notice to the Company, within ninety days of the initial existence of the circumstances giving rise to Good Reason, of the Participant’s intention to terminate his employment for Good Reason, which notice specifies in reasonable detail the circumstances claimed to give rise to the Participant’s right to terminate his employment for Good Reason and the Company shall not have cured such circumstances within thirty days following the Company’s receipt of such notice. If, following such thirty day period, the Company has not cured such circumstances and Participant decides

Exhibit 10.3

to proceed with the termination of his employment for Good Reason, such a termination will be effective by providing the Company with a Notice of Termination.

(v)Retirement. Retirement means termination of employment after the Participant attains age 65, other than a termination of the Participant’s employment for Cause.

4.Restrictions on Transferability. The Participant may not sell, assign, convey, pledge, exchange, hypothecate, alienate or otherwise dispose of or transfer the Restricted Stock in any manner to the extent it remains unvested. No assignment, pledge or transfer of the Restricted Stock, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall be effective; but immediately upon any such attempt to assign, pledge or otherwise transfer the Restricted Stock, the Restricted Stock shall be forfeited.

5.Forfeiture Procedures. In the event of any forfeiture of the Restricted Stock, such forfeiture shall be automatic and without further act or deed by the Company or the Participant. Notwithstanding the foregoing, if requested by the Company (or its agent), the Participant shall execute such documents (including, without limitation, a power of attorney in favor of the Company) and take such other action deemed necessary or desirable by the Company to evidence such forfeiture.

6.Tax Matters. The Participant shall pay or make provision for payment to the Company or its Affiliate, as applicable, through payroll or other withholding (which withholding the Participant hereby authorizes) or other means acceptable to the Company or its Affiliate and permissible under the Plan, the amount necessary to satisfy any federal, state or local withholding requirements applicable to any taxable event arising in connection with the Restricted Stock. The determination of the withholding amounts due in such event shall be made by the Company, and shall be binding upon the Participant. The Company shall not be required to deliver such Shares unless the Participant has made acceptable arrangements to satisfy any such withholding requirements. Nothing in this Section shall be construed to impose on the Company a duty to withhold where applicable law does not require such withholding.

THE PARTICIPANT ACKNOWLEDGES THAT THE PARTICIPANT IS RESPONSIBLE FOR, AND IS ADVISED TO CONSULT WITH THE PARTICIPANT’S OWN TAX ADVISORS REGARDING, THE TAX CONSEQUENCES TO THE PARTICIPANT THAT MAY ARISE IN CONNECTION WITH THE RESTRICTED STOCK, INCLUDING THE DECISION TO MAKE AND TIMELY FILE, AND THE CONSEQUENCES OF, ANY ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE PARTICIPANT ALSO SHALL TIMELY DELIVER A COPY OF ANY SUCH SECTION 83(b) FILING TO THE COMPANY.

7.Rights as Shareholder. Notwithstanding the foregoing vesting and transfer restrictions that apply to the Restricted Stock, but subject to the terms of this Agreement and the Plan, the Participant generally shall otherwise have the beneficial ownership of the Restricted Stock and shall be entitled to exercise the rights and privileges of a shareholder with respect to the Restricted Stock, including the right to vote such shares and the right to receive dividends (if any) paid with respect to such shares; provided, however, that (a) any dividend payments will be made no later than the end of the calendar year in which the dividends are paid to shareholders of the Shares or, if later, the fifteenth day of the third month following the date the dividends are paid to shareholders of the Shares; and (b) with respect to any Shares that arise from any dividends with respect to the Restricted Stock or from adjustments under Section 9, the Participant shall have the same rights and privileges, and shall be subject to the same restrictions, that apply to the Restricted Stock under this Agreement and the Plan.

Exhibit 10.3

8.Book-Entry Form. The shares of Restricted Stock generally shall be evidenced in book-entry or similar form and maintained by or on behalf of the Company in such form. In such case, no stock certificates shall be issued and the applicable restrictions will be noted in the records of the Company and its transfer agent. Notwithstanding the foregoing, in the discretion of the Company, a certificate or certificates representing the Restricted Stock may be registered in the name of the Participant and held in escrow or other custody by or on behalf of the Company. In either case, each certificate or book-entry record may bear such legends as the Company deems appropriate to reflect the applicable terms and conditions upon the Restricted Stock.

9.Adjustments. The Restricted Stock granted pursuant to this Agreement shall be adjusted as provided in the Plan in the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation or other change in corporate capitalization affecting the Shares. The existence of the Restricted Stock shall not affect in any way the authority of the Company and its shareholders to exercise their corporate rights and powers, including, but not by way of limitation, the right of the Company to authorize any adjustment, reclassification, reorganization, or other change in its capital or business structure, any merger or consolidation of the Company, the dissolution or liquidation of the Company, the issuance of securities with preference ahead of or affecting the Shares, or any sale or transfer of all or any part of its business or assets.

10.Securities Laws. Notwithstanding any provision herein to the contrary or in the Plan, the Company shall be under no obligation to issue any Shares to the Participant pursuant to this Agreement unless and until the Company has determined that such issuance is either exempt from registration, or is registered, under the Securities Act of 1933, as amended, and is either exempt from registration and qualification, or is registered or qualified, as applicable, under all applicable state securities or “blue sky” laws. Nothing in this Agreement shall be construed to obligate the Company at any time to file or maintain a registration statement under the Securities Act of 1933, as amended, or to effect similar compliance under any applicable state laws with respect to the Shares that may be issued pursuant to this Agreement. The Company may require that the Participant make such representations and agreements and furnish such information as the Company deems appropriate to assure compliance with applicable legal and regulatory requirements.

11.Resolution of Disputes; Interpretation. Any question of interpretation, dispute or disagreement that arises under, or as a result of, this Agreement shall be determined by the Committee in its absolute and uncontrolled discretion, and any such determination or other interpretation by the Committee pursuant to this Agreement shall be final, binding and conclusive on all parties affected thereby.

12.Miscellaneous.

(a)Binding on Successors and Representatives. Subject to the transfer restrictions applicable to the Participant hereunder and other conditions hereof, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and the Participant’s heirs, executors, administrators, personal representatives, and assigns; and the parties agree, for themselves and their successors, representatives and assigns, to execute any instrument which may be necessary legally to effect the terms and conditions of this Agreement.

(b)No Employment Rights. Nothing contained in this Agreement shall confer upon the Participant any right to continue in the employ or service of the Company or any Affiliate nor interfere with or limit in any way the right of the Company or an Affiliate to terminate the Participant’s employment by,

Exhibit 10.3

or performance of services for, the Company or Affiliate at any time; such provisions being addressed in the separate employment agreement entered into between the Company and the Participant.

(c)Entire Agreement. This Agreement together with the Plan constitute the entire agreement of the parties with respect to the Restricted Stock and supersede any previous agreement, whether written or oral, with respect thereto. This Agreement has been entered into in compliance with the terms of the Plan; wherever a conflict may arise between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

(d)Amendment. Except as otherwise provided below or in the Plan, neither this Agreement nor any of the terms and conditions herein set forth may be altered or amended orally, and any such alteration or amendment shall be effective only when reduced to writing and signed by each of the parties hereto. The Company or the Committee may, without obtaining the Participant’s written consent, amend this Agreement in any respect either deems necessary or advisable to comply with Section 409A of the Code and applicable regulations and guidance thereunder and/or to prevent this Agreement from being subject to Section 409A of the Code.

(e)Construction and Definitions. Any reference herein to the singular or plural shall be construed as plural or singular whenever the context requires. Capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to them in the Plan.

(f)Notices. All notices, requests and amendments under this Agreement shall be in writing, and notices shall be deemed to have been given (i) if delivered by hand, when so delivered, (ii) if sent by overnight express service, one (1) business day after delivery to such service, or (iii) if mailed by certified or registered mail, return receipt requested, three (3) days after delivery to the post office:

(A)if to the Company, at the following address:

CommunityOne Bancorp

1017 E. Morehead Street, Suite 200

Charlotte, North Carolina 28204

Attn: Chief Human Resources Officer

or at such other address as the Company shall designate by notice.

(B)if to the Participant, to the Participant’s address appearing in the Company’s records, or at such other address as the Participant shall designate by notice.

(g)Governing Law. Except to the extent preempted by Federal law, this Agreement shall be construed and determined in accordance with the laws of the State of North Carolina, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of North Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. The parties hereby submit to the jurisdiction of the state and Federal courts encompassing the then current location of the Company’s principal headquarters for the resolution of any disputes, claims, or proceedings arising under this Agreement.

(h)Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and the Committee may elect in its discretion to

Exhibit 10.3

construe such invalid or unenforceable provision in a manner which conforms to applicable law or as if such provision was omitted.

(i)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year written below.



CommunityOne Bancorp	PARTICIPANT:
By:		(SEAL)
Title:	Date:
Date:

EX-10.4 5 a8-kempagrmntsex104.htm FORM OF STOCK OPTION AGREEMENT 8-K Emp Agrmnts Ex 10.4

Exhibit 10.4

COMMUNITYONE BANCORP

2012 INCENTIVE PLAN

FORM OF STOCK OPTION AGREEMENT

This Stock Option Agreement (the "Agreement") is effective as of [ ], between CommunityOne Bancorp, a North Carolina corporation (the "Company"), and [ ] (the "Participant").

WHEREAS, the Company has established the CommunityOne 2012 Incentive Plan (the "Plan"), pursuant to which the Company may, from time to time, make grants of Stock Options to eligible employees and other individuals providing services to the Company or an Affiliate (as all such capitalized terms are defined in the Plan); and

WHEREAS, in consideration for the Participant's service to the Company and/or an Affiliate, the Company hereby grants to the Participant a Stock Option (the "Option") pursuant to the terms and conditions of the Plan and this Agreement;

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereby agree as follows:

1.Option Award.

(a)Grant of Option; Type of Option. Subject to the terms and conditions set forth in this Agreement and the Plan, effective as of the Grant Date, the Company grants to the Participant an Option to purchase [ ] Shares (the “Covered Shares”). The Option is intended to be an Incentive Stock Option to the maximum extent permitted under Section 422 of the Code; provided, however, that to the extent that, during any calendar year, the Option becomes exercisable for the first time with respect to Shares having an aggregate fair market value in excess of the limit imposed by Section 422(d) of the Code or all or any portion of the Option does not otherwise qualify as an incentive stock option under Section 422 of the Code, (a) the Option shall be treated as a nonqualified stock option and not as an incentive stock option, and (b) upon any exercise of the Option, the Participant shall be required to designate the extent to which the exercise of the Option is with respect to that portion, if any, of the Option that is a nonqualified stock option and that portion, if any, of the Option that is an incentive stock option. If, as of the same date, the Participant exercises the Option with respect to a portion of the Option that is an incentive stock option and with respect to a portion of the Option that is a nonqualified stock option, the Company shall issue separate certificates to the Participant representing (i) those Shares that were acquired pursuant to the exercise of an incentive stock option (which Shares shall be identified on the Company’s stock transfer records as such), and (ii) those Shares that were acquired pursuant to the exercise of a nonqualified stock option.

(b)Exercise Price. The Exercise Price shall be $16.00 per Share, which is in excess of the Fair Market Value of a Share on the Grant Date.

(c)Vesting. The Option shall vest in accordance with and subject to the terms set forth below:

(i)Time-Based Vesting. Subject to the Participant's continued service with the Company or an Affiliate (“service”) through the applicable vesting date: (A) the Option shall vest with respect to one-eighth of the Covered Shares on the first anniversary of the Grant Date, (B) the Option shall vest with respect to one-eighth of the Covered Shares on the second anniversary of the Grant Date, (C) the Option shall vest with respect to one-eighth of the Covered Shares on the third

Exhibit 10.4

anniversary of the Grant Date, and (D) the Option shall vest with respect to one-eighth of the Covered Shares on the fourth anniversary of the Grant Date.

(ii)Performance-Based Vesting. Subject to the Participant's continued service through the applicable vesting date: (A) the Option shall vest with respect to one-quarter of the Covered Shares on the first date that the closing price per share of CommunityOne Bancorp common stock achieves an average of $22.00 over a ten consecutive trading day period (provided that such date occurs prior to the seventh anniversary of the Grant Date).; and (B) the Option shall vest with respect to one-quarter of the Covered Shares on the first date that the closing price per share of CommunityOne Bancorp common stock achieves an average of $24.00 over a ten consecutive trading day period (provided that such date occurs prior to the seventh anniversary of the Grant Date). To the extent that the portion of the Option subject to vesting pursuant to this Section 1(c)(ii) does not vest prior to the seventh anniversary of the Grant Date such portion of the Option shall be immediately forfeited on the date of such seventh anniversary.

(iii)Termination Without Cause or For Good Reason; Death, Disability and Retirement. In the event that the Company terminates the Participant’s service without Cause or the Participant terminates service for Good Reason or in the event of the Participant’s death, Disability, or Retirement, the Option shall vest, or be eligible to vest, to the extent provided in Sections 2(b) and 2(c) below.

(iv)Change in Control. In the event of a Change in Control, the Option (to the extent not previously forfeited) shall thereupon become fully vested.

Except to the extent provided in Sections 2(b) and 2(c) hereof, in no event shall the number of Covered Shares as to which the Option is vested increase after the Participant incurs a termination of service. If application of the preceding vesting provisions would result in the Participant vesting in a fraction of a share, such fractional share shall be rounded down to the next whole share.

(d)Option Period. The “Option Period” for the Option shall be ten years, and the Option will expire on the tenth anniversary of the Grant Date, provided that the Option may be forfeited (and expire) prior to such tenth anniversary to the extent provide herein and the Plan. All The Option to the extent not exercised before the expiration of the Option Period shall terminate (to the extent not previously forfeited).

(e)Exercise of Option. To the extent vested, the Option, or any portion thereof, may be exercised by giving written notice to the Company at such place as the Committee or its designee shall direct. Such notice shall specify the number of Shares to be purchased pursuant to the Option and the aggregate Exercise Price to be paid therefor. To the extent that the Option is exercisable but is not exercised, the vested portions of the Option shall accumulate and be exercisable by the Participant in whole or in part at any time prior to expiration of the Option Period, subject to the terms of the Plan and this Agreement. Upon the exercise of the Option in whole or in part, payment of the Exercise Price in accordance with the provisions of the Plan and this Agreement, and satisfaction of such other conditions as may be established by the Committee, the Company shall as soon thereafter as practicable deliver to the Participant a certificate or certificates for the Shares purchased. Notwithstanding the foregoing, the Company may choose to evidence and maintain the Shares in book-entry or similar form. In such case, no certificates shall be issued and the applicable restrictions will be noted in the records of the Company.

(f)Payment of Exercise Price. Payment of the Exercise Price may be made: (i) in cash or by check (or any combination thereof); (ii) irrevocable instructions to a broker to deliver promptly to the Company cash equal to the Exercise Price; (iii) by delivery (by either actual delivery or attestation) of Shares

Exhibit 10.4

(valued at the date of exercise at their Fair Market Value) owned by the Participant at the time of exercise for a period of at least six months (or other time period, if any, determined by the Committee) and otherwise acceptable to the Committee, (iv) by directing the Company to withhold from the Shares to be issued upon exercise of the Option (or portion thereof) being exercised a number of Shares having a Fair Market Value not in excess of the aggregate Exercise Price of the Option (or portion thereof) being exercised, with the payment of the balance of the Exercise Price, if any, being made pursuant to Sections 2(e)(i) or 2(e)(ii) above, (v) by such other methods as may be permitted by the Committee in its sole discretion in accordance with the Plan; or (vi) by a combination of the foregoing methods.

(g)Restrictions on Transferability. The Option shall not be transferable other than by will or the laws of intestate succession. The Option shall be exercisable during the Participant's lifetime only by the Participant. No assignment, pledge or transfer of the Option, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall be effective; but immediately upon any such attempt to assign, pledge or otherwise transfer the Option, the Option shall be forfeited.

(h)No Shareholder Rights Prior to Exercise. Neither the Participant nor the Participant's legal representative, legatee or distributee shall be deemed to be the holder of any Shares subject to the Option and such persons shall not have any rights of a shareholder unless and until such Shares have been issued and delivered to such person.

2. Termination of Employment.

(a)Voluntary Termination of Service Other than For Good Reason or By Reason of Retirement, Disability or Death. Notwithstanding anything herein to the contrary, in the event that the Participant voluntarily terminates the Participant’s service other than for Good Reason or by reason of Retirement, Disability, or Death:

(i)the Option to the extent not vested as of the date of the Participant’s termination of service shall be forfeited; and

(ii)the Option to the extent vested as of the Participant's date of termination of service shall be exercisable by the Participant until the earlier of ninety days following termination of service and the expiration of the Option Period.If the Participant incurs a voluntary termination of service in anticipation of a termination of service for Cause, the rights under this subsection (a) shall not apply and the Option (including any rights to exercise the Participant's Option) shall immediately terminate upon the Participant's termination of service.

(b)Termination of Service by Reason of Retirement, Death, or Disability. Notwithstanding anything herein to the contrary, in the event of the Participant’s termination of service due to the Participant's Retirement, death, or Disability, the Participant shall nonetheless be treated for purposes of Section 1(c) as continuing to be employed by the Company until expiration of the Option Period. To the extent that the Option is or becomes exercisable upon or after the Participant's death, the Option may be exercised to such extent by the person or persons to whom the Participant's rights to exercise the Option passed by will or the laws of descent and distribution (or by the executor or administrator of the Participant’s estate).

(c)Termination By the Company Without Cause or By the Participant for Good Reason. In the event that the Participant’s service is terminated by the Company and its Affiliates without Cause, or if the Participant terminates service for Good Reason, the Option shall upon such termination of service become fully vested in its entirety (to the extent not previously vested).

Exhibit 10.4

(d)Termination for Cause: In the event that the Participant’s service is terminated by the Company or any of its Affiliates for Cause, the Option (whether or not vested in whole or in part) shall immediately thereupon be forfeited in its entirety.

(e)Definitions. For purposes of this Agreement, the following definitions shall apply:

(i)Cause. “Cause” means the termination of the Participant on account of (A) the Participant's incompetence or dishonesty in his performance of, deliberate neglect of, willful malfeasance or misconduct in connection with the performance of, or continued failure to substantially perform, duties reasonably assigned to the Participant by the Company Board of Directors or the applicable Board of Directors of CommunityOne Bank or Bank of Granite (CommunityOne Bank and Bank of Granite collectively referred to herein as the "Bank") which are in the interests of the Company or the applicable Bank and consistent with the Participant's obligations hereunder; (B) the Participant's material breach of any employment (or similar agreement) entered into with the Bank or any material written Company policy; (C) the Participant's willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order; or (D) an act or acts on Participant's part constituting (x) a felony or (y) a misdemeanor involving (a) fraud, moral turpitude, dishonesty, breach of trust or fiduciary duties, organized crime or racketeering; (b) a violation of securities or commodities laws or regulations; (c) a violation of depository institution laws or regulations; (d) a violation of housing authority laws or regulations; or (e) a violation of the rules, regulations, codes of conduct or ethics of a self-regulatory trade or professional organization.

(ii)Change in Control. “Change in Control” means, and shall be deemed to have occurred, if:

(A)any Person, other than (i) any employee benefit plans of the Company, the Bank, or any of their affiliates or (ii) the Recapitalization Investors, is or becomes the “beneficial owner” (as defined in Rules 13d 3 and 13d 5 under the Exchange Act, which Rules shall apply for purposes of this clause (A) whether or not the Company is subject to the Exchange Act), directly or indirectly, of Company securities representing twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities (“Voting Power”) if, at such time, the Voting Power represented by Company securities beneficially owned by such Person exceeds the Voting Power represented by the Company securities beneficially owned by either of the Recapitalization Investors;

(B)the Company consummates a merger, consolidation, share exchange, division or other reorganization or transaction of the Company (a “Fundamental Transaction”) with any other corporation, other than a Fundamental Transaction that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least sixty percent (60%) of the combined Voting Power immediately after such Fundamental Transaction of (i) the Company’s outstanding securities, (ii) the surviving entity’s outstanding securities, or (iii) in the case of a division, the outstanding securities of each entity resulting from the division;

(C)the shareholders of the Company approve a plan of complete liquidation or winding up of the Company;

(D)the consummation of a sale or disposition (in one transaction or a series of transactions) of all or substantially all of the Company’s assets; or

Exhibit 10.4

(E)during any period of twenty-four (24) consecutive months, individuals who at the beginning of such period constituted the Company Board (including for this purpose any new director whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two thirds (2/3) of the Company Board members then still in office who were directors at the beginning of such period or whose appointment, election or nomination was previously so approved or recommended) cease for any reason to constitute at least a majority of the Company Board.

(iii)Disability. “Disability” shall mean that either (A) the Participant is deemed disabled for purposes of any group or individual long-term disability policy paid for by the Company or the Bank that covers the Participant, or (B) in the good faith judgment of the Company Board of Directors, the Participant is substantially unable to perform the Participant's duties under this Agreement for more than ninety days, whether or not consecutive, in any twelve-month period, by reason of a physical or mental illness or injury.

(iv)Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(v)Person. “Person” means the term “person” within the meaning of Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d)(3) and 14(d) thereof.

(vi)Recapitalization Investors. “Recapitalization Investors” means the Carlyle Investor (including its affiliates) and the Oak Hill Investor (including its affiliates).

(vii)Retirement. “Retirement” means termination of employment on or after the Participant attains age 65.

3. Tax Matters. The Participant shall pay or make provision for payment to the Company or its Affiliate, as applicable, through payroll or other withholding (which withholding the Participant hereby authorizes), the amount necessary to satisfy any federal, state or local withholding requirements applicable to any taxable event arising in connection with the exercise of the Option by one or any combination of the following means: (i) tendering a cash payment, (ii) authorizing the Company to withhold Shares otherwise issuable to the Participant, or (iii) delivering to the Company already-owned and unencumbered Shares. The determination of the withholding amounts due in such event shall be made by the Company or one of its Affiliates, as applicable, and shall be binding upon the Participant. The Company shall not be required to deliver such Shares unless the Participant has made acceptable arrangements to satisfy any such withholding requirements. Nothing in this Section shall be construed to impose on the Company a duty to withhold where applicable law does not require such withholding.

THE PARTICIPANT ACKNOWLEDGES THAT THE PARTICIPANT IS RESPONSIBLE FOR, AND IS ADVISED TO CONSULT WITH THE PARTICIPANT'S OWN TAX ADVISORS REGARDING, THE TAX CONSEQUENCES TO THE PARTICIPANT THAT MAY ARISE IN CONNECTION WITH THE OPTION.

4. Forfeiture Procedures. In the event of any forfeiture of the Company or the Option, such forfeiture shall be automatic and without further act or deed by the Participant. Notwithstanding the foregoing, if requested by the Company (or its agent), the Participant shall execute such documents (including, without limitation, a power of attorney in favor of the Company) and take such other action deemed necessary or desirable by the Company to evidence such forfeiture.

Exhibit 10.4

5. Adjustments. The Option granted pursuant to this Agreement shall be adjusted as provided in and subject to the Plan in the event of recapitalization, stock split, stock dividend, combination of shares, merger, consolidation or other change in corporate capitalization affecting the Shares. The existence of the Option shall not affect in any way the authority of the Company and its shareholders to exercise their corporate rights and powers, including, but not by way of limitation, the right of the Company to authorize any adjustment, reclassification, reorganization, or other change in its capital or business structure, any merger or consolidation of the Company the dissolution or liquidation of the Company the issuance of securities with preference ahead of or affecting the Shares, or any sale or transfer of all or any part of its business or assets.

6. Securities Laws. Notwithstanding any provision herein to the contrary or in the Plan, the Company shall be under no obligation to issue any Shares to the Participant pursuant to this Agreement unless and until the Company has determined that such issuance is either exempt from registration, or is registered, under the Securities Act of 1933, as amended, and is either exempt from registration and qualification, or is registered or qualified, as applicable, under all applicable state securities or "blue sky" laws. Nothing in this Agreement shall be construed to obligate the Company at any time to file or maintain a registration statement under the Securities Act of 1933, as amended, or to effect similar compliance under any applicable state laws with respect to the Shares that may be issued pursuant to this Agreement. The Company may require that the Participant make such representations and agreements and furnish such information as the Company deems appropriate to assure compliance with applicable legal and regulatory requirements.

7. Resolution of Disputes; Interpretation. Any question of interpretation, dispute or disagreement that arises under, or as a result of, this Agreement shall be determined by the Committee in its absolute discretion, and any such determination or other interpretation by the Committee pursuant to this Agreement shall be final, binding and conclusive on all parties affected thereby.

8. Miscellaneous.

(a)Binding on Successors and Representatives. Subject to the transfer restrictions applicable to the Participant hereunder and other conditions hereof, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and the Participant's heirs, executors, administrators, personal representatives, and assigns; and the parties agree, for themselves and their successors, representatives and assigns, to execute any instrument which may be necessary legally to effect the terms and conditions of this Agreement.

(c)Entire Agreement. This Agreement together with the Plan constitute the entire agreement of the parties with respect to the Option and supersede any previous agreement, whether written or oral, with respect thereto. This Agreement has been entered into in compliance with the terms of the Plan; wherever a conflict may arise between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. Notwithstanding the foregoing, the Option shall be subject to terms of any employment agreement entered into between the Participant and the Company (during the term of any such agreement) and to the extent that any such agreement provides for the Option to become exercisable upon the occurrence of a specified event, the Option shall become vested and exercisable upon the occurrence of such specified event.

Exhibit 10.4

(f)Notice of Disposition of Shares. If the Participant sells or otherwise disposes of any of the Shares acquired pursuant to exercise of the Option on or before the later of (i) the second anniversary of the Grant Date, or (ii) first anniversary of the date the Shares were transferred to the Participant pursuant to exercise of the Option, the Participant shall notify the Company, in writing, within 30 days of such disposition. Such notice shall state the number of Shares disposed of, the date disposition, and the sale price or other consideration received in connection with the disposition.

(g)Notices. All notices, requests and amendments under this Agreement shall be in writing, and notices shall be deemed to have been given (i) if delivered by hand, when so delivered, (ii) if sent by overnight express service, one (1) business day after delivery to such service, or (iii) if mailed by certified or registered mail, return receipt requested, three (3) days after delivery to the post office:


(A)	if to the Company, at the following address:

CommunityOne Bancorp

1017 E. Morehead St., Suite 200 Charlotte, North Carolina 28204

or at such other address as the Company shall designate by notice.


(B)	if to the Participant, to the Participant's address appearing in the

Company's records, or at such other address as the Participant shall designate by notice.

(h) Governing Law. Except to the extent preempted by Federal law, this Agreement shall be construed and determined in accordance with the laws of the State of North Carolina, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of North Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. The parties hereby submit to the jurisdiction of the state and Federal courts encompassing the then current location of the Company's principal headquarters for the resolution of any disputes, claims, or proceedings arising under this Agreement.

(i)Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and the Committee may elect in its discretion to construe such invalid or unenforceable provision in a manner which conforms to applicable law or as if such provision was omitted.

Exhibit 10.4

(j)Counterparts. This Agreement may be executed in counterparts, each of

which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year written below.



COMMUNITYONE BANCORP			PARTICIPANT:
By:
Title:			Date:
Date: