Employment Agreement
EXHIBIT 10
(xix)
This Employment
Agreement (this “Agreement”)
is entered into effective as of this 10 day of September, 2008 by and among Xxx
X. Xxxxxx (the “Executive”),
Crescent Financial Corporation, a North Carolina corporation (the “Corporation”),
and Crescent State Bank, a North Carolina-chartered bank and wholly owned
subsidiary of Crescent Financial Corporation (the “Bank”). The
Corporation and the Bank are hereinafter sometimes referred to together or
individually as the “Employer.”
Whereas,
the Executive is the Senior Vice President of the Bank, possessing unique
skills, knowledge, and experience relating to the business of banking, and the
Executive has made and is expected to continue to make major contributions to
the profitability, growth, and financial strength of the Corporation and
affiliates,
Whereas,
the Executive and the Employer intend that this Agreement shall supersede and
replace in its entirety the October 24, 2007 Employment Agreement between the
Executive and the Employer, and
Whereas,
none of the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or,
to the best knowledge of the Employer, is contemplated insofar as the Employer
or any affiliates are concerned.
Now
Therefore, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
Article
1
Employment
1.1 Employment. The
Employer hereby employs the Executive to serve as Senior Vice President
according to the terms and conditions of this Agreement and for the period
stated in section 1.3. The Executive hereby accepts employment
according to the terms and conditions of this Agreement and for the period
stated in section 1.3.
1.2 Duties. The
Executive shall serve under the direction of the Employer’s President and Chief
Executive Officer and in accordance with the Employer’s Articles of
Incorporation and Bylaws, as the Articles of Incorporation and Bylaws may be
amended or restated from time to time. The Executive shall report
directly to the President and Chief Executive Officer. The Executive
shall serve the Employer faithfully, diligently, competently, and to the best of
the Executive’s ability. The Executive shall exclusively devote full
time, energy, and attention to the business of the Employer and to the promotion
of the Employer’s interests throughout the term of this
Agreement. Without the written consent of the board of directors of
each of the Corporation and the Bank, the Executive shall not render services to
or for any person, firm, corporation, or other entity or organization in
exchange for compensation, regardless of the form in which such compensation is
paid and regardless of whether it is paid directly or indirectly to the
Executive. Nothing in this Article 2 shall prevent the Executive from
managing personal investments and affairs, provided that doing so does not
interfere with the proper performance of the Executive’s duties and
responsibilities under this Agreement.
1.3 Term of
Employment. The initial term of this Agreement shall be for a
period of three years commencing on the effective date of this
Agreement. On the first anniversary of the effective date of this
Agreement and on each anniversary thereafter, this Agreement shall be extended
automatically for one additional year unless the Employer’s board of directors
determines that the term shall not be extended. If the board of
directors determines not to extend the term, it shall promptly notify the
Executive in writing, and this Agreement shall nevertheless remain in force
until its term expires. The board’s decision not to extend the term
of this Agreement shall not – by itself – give the Executive any rights under
this Agreement to claim an adverse change in position, compensation, or
circumstances or otherwise to claim entitlement to severance benefits under
Articles 4 or 5. References herein to the term of this Agreement mean
the initial term, as the same may be extended. Unless sooner
terminated, the Executive’s employment and the term of this Agreement shall
terminate when the Executive attains age 65.
Article
2
Compensation
and Benefits
2.1 Base Salary. In
consideration of the Executive’s performance of the obligations under this
Agreement, the Employer shall pay or cause to be paid to the Executive a salary
at the annual rate of not less than $184,000, payable in semi-monthly
installments. No less frequently than annually the Executive’s salary
shall be reviewed by the Compensation Committee of the Employer’s board of
directors or by the board committee with jurisdiction over executive
compensation. The Executive’s salary shall be increased no more
frequently than annually to account for cost of living increases. The
Executive’s salary also may be increased beyond the amount necessary to account
for cost of living increases at the discretion of the committee having
jurisdiction over executive compensation. However, the Executive’s
salary shall not be reduced. The Executive’s salary, as the same may
be increased from time to time, is referred to in this Agreement as the “Base
Salary.”
2.2 Benefit Plans and
Perquisites. The Executive shall be entitled throughout the
term of this Agreement to participate in any and all officer or employee
compensation, bonus, incentive, and benefit plans in effect from time to time,
including without limitation stock option and other stock-based compensation,
incentive, bonus, or purchase plans existing on the date of this Agreement or
adopted during the term of this Agreement and plans providing pension, medical,
dental, disability, and group life benefits, including the Employer’s 401(k)
plan, and to receive any and all other fringe benefits provided from time to
time, provided that the Executive satisfies the eligibility requirements for any
such plans or benefits. Without limiting the generality of the
foregoing, the Executive shall be entitled to reimbursement for all reasonable
business expenses incurred performing the Executive’s obligations under this
Agreement, including but not limited to all reasonable business travel and
entertainment expenses incurred while acting at the request of or in the service
of the Employer and reasonable expenses for attendance at annual and other
periodic meetings of trade associations.
2.3 Vacation. The
Executive shall be entitled to paid annual vacation and sick leave in accordance
with the policies established from time to time by the Employer, but in no event
fewer than four weeks of vacation per year. The Executive shall
schedule at least five consecutive days of vacation per year. The
timing of vacations shall be scheduled in a reasonable manner by the
Executive. The Executive shall not be entitled to any additional
compensation for failure to use allotted vacation or sick leave nor shall the
Executive be entitled to accumulate unused sick leave from one year to the next,
unless authorized by the Employer’s board of directors to do so.
2.4 Indemnification and
Insurance. (a) Indemnification. The
Employer shall indemnify the Executive or cause the Executive to be indemnified
for the Executive’s activities as a director, officer, employee, or agent of the
Employer or as a person who is serving or has served at the request of the
Employer (a “representative”)
as a director, officer, employee, agent, or trustee of an affiliated
corporation, joint venture, trust or other enterprise, domestic or foreign, in
which the Employer has a direct or indirect ownership interest against expenses
(including without limitation attorneys’ fees, judgments, fines, and amounts
paid in settlement) actually and reasonably incurred (“Expenses”)
in connection with any claim against the Executive that is the subject of any
threatened, pending, or completed action, suit, or other type of proceeding,
whether civil, criminal, administrative, investigative, or otherwise and whether
formal or informal (a “Proceeding”),
to which the Executive was, is, or is threatened to be made a party by reason of
the Executive being or having been such a director, officer, employee, agent, or
representative.
The indemnification provided herein
shall not be exclusive of any other indemnification or right to which the
Executive may be entitled and shall continue after the Executive has ceased to
occupy a position as an officer, director, employee, agent, or representative
with respect to Proceedings relating to or arising out of the Executive’s acts
or omissions during the Executive’s service in such position. The
indemnification provided to the Executive under this Agreement for the
Executive’s service as a representative shall be payable if and only if and only
to the extent that reimbursement to the Executive by the affiliated entity with
which the Executive has served as a representative, whether pursuant to
agreement, applicable law, articles of incorporation or association, by-laws or
regulations of the entity, or insurance maintained by such affiliated entity, is
insufficient to compensate the Executive for Expenses actually incurred and
otherwise payable by the Employer under this Agreement. Any payments
in fact made to or on behalf of the Executive directly or indirectly by the
affiliated entity with which the Executive served as a representative shall
reduce the obligation of the Employer hereunder.
2
(b) Exclusions. Despite
anything herein to the contrary, however, nothing in this section 2.4 requires
indemnification, reimbursement, or payment by the Employer, and the Executive
shall not be entitled to demand indemnification, reimbursement, or payment
–
1) if
and to the extent indemnification, reimbursement, or payment constitutes a
“prohibited indemnification payment” within the meaning of Federal Deposit
Insurance Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)], or
2) for
any claim or any part thereof for which the Executive shall have been determined
by a court of competent jurisdiction, from which no appeal is or can be taken,
by clear and convincing evidence, to have acted with deliberate intent to cause
injury to the Employer or with reckless disregard for the Employer’s best
interests, or
3) for
any claim or any part thereof arising under section 16(b) of the Securities
Exchange Act of 1934 as a result of which the Executive is required to pay any
penalty, fine, settlement, or judgment, or
4) for
any obligation of the Executive based upon or attributable to the Executive
gaining in fact any personal gain, profit, or advantage to which the Executive
was not entitled, or
5) any
proceeding initiated by the Executive without the consent or authorization of
the Employer’s board of directors, but this exclusion shall not apply to any
claims brought by the Executive (x) to enforce the Executive’s
rights under this Agreement, or (y) in any Proceeding
initiated by another person or entity whether or not such claims were brought by
the Executive against a person or entity who was otherwise a party to such
proceeding.
(c) Insurance. The
Employer shall maintain or cause to be maintained liability insurance covering
the Executive throughout the term of this Agreement.
Article
3
Termination
3.1 Termination Because of Death or
Disability. (a) Death. The
Executive’s employment shall terminate automatically on the date of the
Executive’s death. If the Executive’s employment terminates because
of the Executive’s death, the Executive’s estate shall receive any sums due the
Executive as Base Salary and reimbursement of expenses through the end of the
month in which death occurred, plus any bonus earned or accrued through the date
of death, including any unvested amounts awarded for previous
years. If the Executive dies in active service to the Employer, for
12 months after the Executive’s death the Employer shall provide without cost to
the Executive’s family continuing health care coverage under COBRA substantially
identical to that provided for the Executive before death.
(b) Disability. By delivery of
written notice 30 days in advance to the Executive, the Employer may terminate
the Executive’s employment if the Executive is disabled. For purposes of this
Agreement the Executive shall be deemed to be “disabled”
if an independent physician selected by the Employer and reasonably acceptable
to the Executive or the Executive’s legal representative determines that,
because of illness or accident, the Executive is unable to perform the
Executive’s duties and will be unable to perform the Executive’s duties for a
period of 90 consecutive days. The Executive shall not be deemed to be disabled,
however, if the Executive returns to work on a full-time basis within 30 days
after the Employer gives notice of termination because of disability. If the
Executive is terminated by either of the Corporation or the Bank because of
disability, the Executive’s employment with the other shall also terminate at
the same time. During the period of incapacity leading up to termination of the
Executive’s employment under this provision, the Employer shall continue to pay
the full Base Salary at the rate then in effect and all perquisites and other
benefits (other than bonus) until the Executive becomes eligible for benefits
under any disability plan or insurance program maintained by the Employer,
provided that the amount of the Employer’s payments under this section 3.1(b) to
the Executive shall be reduced by the sum of the amounts, if any, payable to the
Executive for the same period under any disability benefit or pension plan
covering the Executive. Furthermore, the Executive shall receive any bonus
earned or accrued through the date of incapacity, including any unvested amounts
awarded for previous years.
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3.2 Involuntary Termination with
Cause. The Employer may terminate the Executive’s employment
with Cause. If the Executive’s employment is terminated with Cause by
either of the Corporation or the Bank, the Executive’s employment with the other
shall also terminate at the same time. If the Executive’s employment
terminates with Cause, the Executive shall receive the Base Salary through the
date on which termination becomes effective and reimbursement of expenses to
which the Executive is entitled when termination becomes
effective. For purposes of this Agreement “Cause”
means any of the following occur –
(a) an
act of fraud, embezzlement, or theft by the Executive in the course of
employment or misconduct involving dishonesty, or
(b) intentional
violation of any law or significant policy of the Employer or an affiliate,
which in the Employer’s sole judgement causes material harm to the Employer or
affiliate, regardless of whether the violation leads to criminal prosecution or
conviction. For purposes of this Agreement applicable laws include
any statute, rule, regulatory order, statement of policy, or final
cease-and-desist order of any governmental agency or body having regulatory
authority over the Employer. For purposes of this Agreement no act or
failure to act on the Executive’s part shall be deemed to have been intentional
if it was due primarily to an error in judgment or negligence. An act
or failure to act on the Executive’s part shall be considered intentional if it
is not in good faith and if it is without a reasonable belief that the action or
failure to act is in the Employer’s best interests, or
(c) the
Executive’s gross negligence or gross neglect in the performance of duties,
or
(d) intentional
wrongful damage by the Executive to the business or property of the Employer or
its affiliates, including without limitation the reputation of the Employer,
which in the Employer’s sole judgment causes material harm to the Employer,
or
(e) a
breach by the Executive of fiduciary duties as an officer or director of the
Employer, or misconduct involving dishonesty, or
(f) a
breach by the Executive of this Agreement that in the sole judgment of the
Employer is a material breach, which breach is not corrected by the Executive
within ten days after receiving written notice of the breach, or
(g) removal
of the Executive from office or permanent prohibition of the Executive from
participating in the Employer’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),
or
(h) the
occurrence of any event that results in the Executive being excluded from
coverage, or having coverage limited for the Executive as compared to other
executives of the Employer, under the Employer’s blanket bond or other fidelity
or insurance policy covering its directors, officers, or employees,
or
(i) conviction
of the Executive for or plea of no contest to a felony or conviction of or plea
of no contest to a misdemeanor involving moral turpitude, or the actual
incarceration of the Executive for 5 consecutive days or more.
3.3 Voluntary Termination by the
Executive. If the Executive terminates employment voluntarily,
the Executive shall receive the Base Salary and expense reimbursement to which
the Executive is entitled through the date on which termination becomes
effective.
3.4 Involuntary Termination Without
Cause. With written notice to the Executive 60 days in
advance, the Employer may terminate the Executive’s employment without
Cause. Termination shall take effect at the end of the 60-day
period. If the Executive’s employment terminates involuntarily
without Cause, the Executive shall be entitled to the benefits specified in
Article 4 of this Agreement.
3.5 Notice. Any
purported termination by the Employer or by the Executive shall be communicated
by written notice of termination to the other. The notice must state
the specific termination provision of this Agreement relied upon. The
notice must also state the date on which termination shall become effective,
which shall be a date not earlier than the date of the termination
notice. If termination is an involuntary termination with Cause, the
notice must state in reasonable detail the facts and circumstances forming the
basis for termination of the Executive’s employment.
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Article
4
Severance
4.1 Termination Without
Cause. Subject to the possibility that continued Base Salary
for the first six months after employment termination might be delayed because
of section 4.2, if the Executive’s employment terminates involuntarily but
without Cause the Executive shall be entitled to receive from the Employer
continued Base Salary for 12 months from the date of termination. The
severance benefit provided by this section 4.1 shall not be payable, however, if
the Executive’s employment is terminated within 24 months after a change in
control of the Corporation. In addition, if the Executive becomes
employed elsewhere during the 12-month period in which severance benefits are
payable under this section 4.1, the severance benefit provided by this section
4.1 shall be reduced by the amount of any other compensation earned by the
Executive during the 12-month period. A change in control of the
Corporation means a change in control as defined in Internal Revenue Code
section 409A and rules, regulations, and guidance of general application
thereunder issued by the Department of the Treasury, including –
(a) Change in ownership: a change
in ownership of the Corporation occurs on the date any one person or group
accumulates ownership of Corporation stock constituting more than 50% of the
total fair market value or total voting power of the Corporation’s
stock,
(b) Change in effective control:
(x) any one person or
more than one person acting as a group acquires within a 12-month period
ownership of Corporation stock possessing 30% or more of the total voting power
of the Corporation’s stock, or (y) a majority of the
Corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed in advance by a majority
of the Corporation’s board of directors, or
(c) Change in ownership of a substantial
portion of assets: a change in the ownership of a substantial portion of
the Corporation’s assets occurs if in a 12-month period any one person or more
than one person acting as a group acquires from the Corporation assets having a
total gross fair market value equal to or exceeding 40% of the total gross fair
market value of all of the Corporation’s assets immediately before the
acquisition or acquisitions. For this purpose, gross fair market
value means the value of the Corporation’s assets, or the value of the assets
being disposed of, determined without regard to any liabilities associated with
the assets.
4.2 Possible Delay Because of
409A. If when employment termination occurs the Executive is a
specified employee within the meaning of section 409A of the Internal Revenue
Code of 1986, and if continued Base Salary under section 4.1 would be considered
deferred compensation under section 409A, and finally if an exemption from the
six-month delay requirement of section 409A(a)(2)(B)(i) is not available, the
Executive’s severance benefit under section 4.1 for the first six months after
employment termination shall be paid to the Executive in a single lump sum on
the first day of the seventh month after the month in which the Executive’s
employment terminates. References in this Agreement to section 409A
of the Internal Revenue Code of 1986 include rules, regulations, and guidance of
general application issued by the Department of the Treasury under Internal
Revenue Code section 409A.
4.3 Lump-sum Benefit After a Change in
Control. If a change in control occurs during the term of this
Agreement, within 15 business days after the change in control the Employer
shall make or cause to be made to the Executive a lump-sum cash payment in the
amount of $75,000. The Executive shall be entitled to the $75,000
payment after a change in control on no more than one occasion during the term
of this Agreement. For purposes of this section 4.3 the term change
in control means a change in control as defined in section 4.1.
Article
5
Confidentiality
and Creative Work
5.1 Non-disclosure. The
Executive covenants and agrees not to reveal to any person, firm, or corporation
any confidential information of any nature concerning the Employer or its
business. As used in this Article 5, the term “confidential
information” means all of the Employer’s and its affiliates’ confidential
and proprietary information and trade secrets in existence on the date hereof or
existing at any time during the term of this Agreement, including but not
limited to –
5
(a) the
whole or any portion or phase of any business plans, financial information,
purchasing data, supplier data, accounting data, or other financial
information,
(b) the
whole or any portion or phase of any research and development information,
design procedures, algorithms, or processes, or other technical
information,
(c) the
whole or any portion or phase of any marketing or sales information, sales
records, customer lists, prices, sales projections, or other sales information,
and
(d) trade
secrets, as defined from time to time by the laws of the State of North
Carolina.
Despite
the foregoing, confidential information excludes information that – as of the
date hereof or at any time after the date hereof – is published or disseminated
without obligation of confidence or that becomes a part of the public domain
(x) by or through
action of the Employer or (y) otherwise than by or at
the Executive’s direction. This section 5.1 does not prohibit
disclosure required by an order of a court having jurisdiction or a subpoena
from an appropriate governmental agency or disclosure made by the Executive in
the ordinary course of business and within the scope of the Executive’s
authority.
5.2 Return of
Materials. The Executive agrees to deliver or return to the
Employer upon employment termination, upon expiration of this Agreement, or as
soon thereafter as possible, all written information and any other similar items
furnished by the Employer or prepared by the Executive in connection with the
Executive’s services hereunder. The Executive will retain no copies
thereof after termination of this Agreement or termination of the Executive’s
employment.
5.3 Injunctive
Relief. The Executive acknowledges that it is impossible to
measure in money the damages that will accrue to the Employer if the Executive
fails to observe the obligations imposed by this Article
5. Accordingly, if the Employer institutes an action to enforce the
provisions hereof, the Executive hereby waives the claim or defense that an
adequate remedy at law is available to the Employer, and the Executive agrees
not to urge in any such action the claim or defense that an adequate remedy at
law exists.
5.4 Affiliates’ Confidential Information
is Covered; Confidentiality Obligation Survives
Termination. For purposes of this Agreement the term “affiliate”
of the Employer includes the Bank and any entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the Corporation. The rights and obligations set
forth in this Article 5 shall survive termination of this
Agreement.
5.5 Creative Work. The
Executive agrees that all creative work and work product, including but not
limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term
of this Agreement, regardless of when or where such work or work product was
produced, constitutes work made for hire, all rights of which are owned by the
Employer. The Executive hereby assigns to the Employer all rights,
title, and interest, whether by way of copyrights, trade secret, trademark,
patent, or otherwise, in all such work or work product, regardless of whether
the same is subject to protection by patent, trademark, or copyright
laws.
Article
6
Competition
After Employment Termination
6. Restrictions on the Executive’s
Post-Employment Activities. These restrictions have been
negotiated, presented to and accepted by the Executive contemporaneous with the
offer and acceptance by the Executive of this Agreement and the benefits
promised in an Amended Salary Continuation Agreement signed or to be signed in
2008 by the Executive and the Bank. The Employer’s decision to enter
into this Agreement and the Amended Salary Continuation Agreement is conditioned
upon the Executive’s agreement to be bound by the restrictions contained in this
Article 6.
6
(a) Promise of no
solicitation. The Executive promises and agrees that during
the Restricted Period (as defined below), and in the Restricted Territory (as
defined below), the Executive will1:
1. not directly or indirectly
solicit, or attempt to solicit any Customer (as defined below) to accept or
purchase Financial Products or Services (as defined below) of the same nature,
kind or variety as provided to the Customer by the Employer during the two years
immediately preceding the Executive’s employment termination with the
Employer;
2. not directly or indirectly
influence, or attempt to influence any Customer, joint venturer or other
business partner of the Employer to alter that person or entity’s business
relationship with the Employer in any respect; and
3. not accept the Financial
Products or Services business of any Customer or provide Financial Products or
Services to any Customer on behalf of anyone other than the
Employer.
(b) Promise of no
competition. The Executive promises and agrees that during the
Restricted Period in the Restricted Territory, the Executive will not engage, undertake or
participate in the business of providing, selling, marketing or distributing
Financial Products or Services of a similar nature, kind or variety (i) as
offered by the Employer to Customers during the two years immediately preceding
the Executive’s employment termination with the Employer; or (ii) as offered by
the Employer to any of its Customers during the Restricted Period.2 Subject to the above provisions and
conditions of this subparagraph (b), the Executive promises that during the
Restricted Period the Executive will not become employed by or
serve as a director, partner, consultant, agent, or owner of 5% or more of the
outstanding stock of or contractor to any entity providing these prohibited
Financial Products or Services which is located in, or conducts business in the
Restricted Territory.
(c) Promise of no
raiding/hiring. The Executive promises and agrees that during
the Restricted Period, the Executive will not solicit or attempt to
solicit and will not
encourage or induce in any way, any employee, joint venturer or business partner
of the Employer to terminate an employment or contractual relationship with the
Employer. The Executive agrees that the Executive will not hire any person employed
by Employer during the two (2) year period prior to the Executive’s employment
termination with the Employer or any person employed by the Employer during the
Restricted Period.
(d) Promise of no
disparagement. The Executive promises and agrees that during
the Restricted Period, the Executive will not cause statements to be
made (whether written or oral) which reflect negatively on the business
reputation of the Employer.
(e) Acknowledgment. The
Executive and the Employer acknowledge and agree that the provisions of this
Article 6 have been negotiated and carefully determined to be reasonable and
necessary for the protection of legitimate business interests of the
Employer. Both parties agree that a violation of Article 6 is likely
to cause immediate and irreparable harm which will give rise to the need for
court ordered injunctive relief. In the event of a breach or
threatened breach by the Executive of any provision of this Agreement, the
Employer shall be entitled to obtain an injunction restraining the Executive
from violating the terms of this Agreement, and to institute an action against
the Executive to recover damages from the Employee for such
breach. These remedies for default or breach are in addition to any
other remedy or form of redress provided under North Carolina law. The parties
acknowledge that the provisions of this Article 6 survive termination of the
employment relationship. The parties agree that if any of the
provisions of this Article 6 are deemed unenforceable by a court of competent
jurisdiction, that such provisions may be stricken as independent clauses by the
court in order to enforce the remaining territory restrictions and that the
intent of the parties is to afford the broadest restriction on post-employment
activities as set forth in this Agreement. Without limiting the
generality of the foregoing, without limiting the remedies available to the
Employer for violation of this Agreement, and without constituting an election
of remedies, if the Executive violates any of the terms of Article 6 the
Executive shall forfeit on the Executive’s own behalf and that of
beneficiary(ies) any rights to and interest in any severance or other benefits
under this Agreement or other contract the Executive has with the Bank or the
Corporation.
2 For Example, the promise of no
competition applies if the Executive is conducting prohibited business in the
Restricted Territory or if the entity with, for or to whom the
Executive is conducting prohibited business is located within the Restricted
Territory.
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(f) Definitions:
1. “Restricted
Period” as used herein means the one (1) year immediately following the
Executive’s termination and/or separation of employment with the Employer,
regardless of the reason for termination and/or separation. The
Restricted Period shall be extended in an amount equal to any time period during
which a violation of Article 6 of this Agreement is proven.
2. “Restricted
Territory” as used herein means: (1) Wake County, North Carolina; (2) all
contiguous counties to Wake County, North Carolina; and (3) any county with a
branch or loan office established during the term of this
Agreement. The parties agree that if any of these separate
territories are deemed too broad to be enforced by a court of competent
jurisdiction, that the territories are divisible and severable territories which
may be stricken as independent clauses by the court in order to enforce the
remaining territory restrictions.
3. “Customer”
as used herein means any individual, joint venturer, entity of any sort, or
other business partner of the Employer, with, for or to whom the Employer has
provided Financial Products or Services during the last two (2) years of the
Executive’s employment with the Employer; or any individual, joint venturer,
entity of any sort, or business partner whom the Employer has identified as a
prospective customer of Financial Products or Services within the last two (2)
years of the Executive’s employment with the Employer.
4. “Financial
Products or Services” as used herein means any product or service that a
financial institution or a financial holding company could offer by engaging in
any activity that is financial in nature or incidental to such a financial
activity under Article 4(k) of the Bank Holding Company Act of 1956 and that is
offered by the Employer or an affiliate on the date of the Executive’s
employment termination, including but not limited to banking activities and
activities that are closely related and a proper incident to banking, or other
products or services of the type of which the Executive was involved during the
Executive’s employment with the Employer.
Article
7
Miscellaneous
7.1 Successors and
Assigns. (a) This Agreement is binding on
successors. This Agreement shall be binding upon the Employer
and any successor to the Employer, including any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Employer by
purchase, merger, consolidation, reorganization, or otherwise. But
this Agreement and the Employer’s obligations under this Agreement are not
otherwise assignable, transferable, or delegable by the Employer. By
agreement in form and substance satisfactory to the Executive, the Employer
shall require any successor to all or substantially all of its business or
assets expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Employer would be required to perform had no
succession occurred.
(b) This Agreement is enforceable by the
Executive’s heirs. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, and
legatees.
(c) This Agreement is personal and is
not assignable. This Agreement is personal in
nature. Without written consent of the other parties, no party shall
assign, transfer, or delegate this Agreement or any rights or obligations under
this Agreement except as expressly permitted. Without limiting the
generality or effect of the foregoing, the Executive’s right to receive payments
hereunder is not assignable or transferable, whether by pledge, creation of a
security interest, or otherwise, except for a transfer by the Executive’s will
or by the laws of descent and distribution. If the Executive attempts
an assignment or transfer that is contrary to this section 7.1, the Employer
shall have no liability to pay any amount to the assignee or
transferee.
8
7.2 Governing Law, Jurisdiction and
Forum. This Agreement shall be construed under and governed by
the internal laws of the State of North Carolina, without giving effect to any
conflict of laws provision or rule (whether of the State of North Carolina or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than North Carolina. By entering into this
Agreement, the Executive acknowledges that the Executive is subject to the
jurisdiction of both the federal and state courts in North
Carolina. Any actions or proceedings instituted under this Agreement
shall be brought and tried solely in courts located in Wake County, North
Carolina or in the federal court having jurisdiction in Cary, North
Carolina. The Executive expressly waives the right to have any such
actions or proceedings brought or tried elsewhere.
7.3 Entire
Agreement. This Agreement sets forth the entire agreement of
the parties concerning the employment of the Executive. Any oral or
written statements, representations, agreements, or understandings made or
entered into before or contemporaneously with the execution of this Agreement
are hereby rescinded, revoked, and rendered null and void by the
parties. Benefits payable under this Agreement shall not be reduced
by any benefits payable under the Salary Continuation Agreement between the
Executive and the Bank, as that agreement may be amended or restated, and
benefits payable under the Salary Continuation Agreement likewise shall not be
reduced by any benefits payable under this Agreement. This Agreement
supersedes and replaces in its entirety the October 24, 2007 Employment
Agreement entered into by the Executive, the Bank, and the
Corporation.
7.4 Notices. Any notice
under this Agreement shall be deemed to have been effectively made or given if
in writing and personally delivered, delivered by mail properly addressed in a
sealed envelope, postage prepaid by certified or registered mail, delivered by a
reputable overnight delivery service, or sent by facsimile. Unless
otherwise changed by notice, notice shall be properly addressed to the Executive
if addressed to the address of the Executive on the books and records of the
Employer at the time of the delivery of such notice, and properly addressed to
the Employer if addressed to Crescent Financial Corporation, 0000 Xxxx Xxxxx
Xxxx, Xxxx, Xxxxx Xxxxxxxx 00000, Attention: Corporate Secretary.
7.5 Severability. In
the case of conflict between any provision of this Agreement and any statute,
regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent
necessary to bring them within the requirements of law. If any
provision of this Agreement is held by a court of competent jurisdiction to be
indefinite, invalid, void or voidable, or otherwise unenforceable, the balance
of this Agreement shall continue in full force and effect unless such
construction would clearly be contrary to the intentions of the parties or would
result in an injustice.
7.6 Captions and
Counterparts. The captions in this Agreement are solely for
convenience. The captions do not define, limit, or describe the scope
or intent of this Agreement. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
7.7 Amendment and
Waiver. This Agreement may not be amended, released,
discharged, abandoned, changed, or modified except by an instrument in writing
signed by each of the parties hereto. The failure of any party hereto
to enforce at any time any of the provisions of this Agreement shall not be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of any party
thereafter to enforce each and every provision. No waiver or any
breach of this Agreement shall be held to be a waiver of any other or subsequent
breach.
7.8 Compliance with Internal Revenue Code
Section 409A. The Employer and the Executive intend that their
exercise of authority or discretion under this Agreement shall comply with
section 409A of the Internal Revenue Code of 1986. If when the
Executive’s employment terminates the Executive is a specified employee, as
defined in section 409A of the Internal Revenue Code of 1986, and if any
payments under this Agreement, including Articles 4 or 5, will result in
additional tax or interest to the Executive because of section 409A, then
despite any contrary provision of this Agreement the Executive shall not be
entitled to the payments until the earliest of (x) the date that is at least
six months after termination of the Executive’s employment for reasons other
than the Executive’s death, (y) the date of the
Executive’s death, or (z) any earlier date that does
not result in additional tax or interest to the Executive under section
409A. As promptly as possible after the end of the period during
which payments are delayed under this provision, the entire amount of the
delayed payments shall be paid to the Executive in a single lump
sum. If any provision of this Agreement does not satisfy the
requirements of section 409A, such provision shall nevertheless be applied in a
manner consistent with those requirements. If any provision of this
Agreement would subject the Executive to additional tax or interest under
section 409A, the Employer shall reform the provision. However, the
Employer shall maintain to the maximum extent practicable the original intent of
the applicable provision without subjecting the Executive to additional tax or
interest, and the Employer shall not be required to incur any additional
compensation expense as a result of the reformed provision.
9
In Witness
Whereof, the parties have executed this Employment Agreement as of the
date first written above.
|
Witnesses
|
Crescent
Financial Corporation
|
||
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By:
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|||
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Its:
|
|
||
|
Witnesses
|
Crescent
State Bank
|
||
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By:
|
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Its:
|
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|
Witnesses
|
Executive
|
||
|
/s/ Xxx X. Xxxxxx
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|||
|
Xxx
X. Xxxxxx
|
|||
|
County
of Wake
|
)
|
||
|
)
ss:
|
|||
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State
of North Carolina)
|
|||
Before me
this ___ day of _______________, 2008, personally appeared the above named
____________________ and Xxx X. Xxxxxx, who acknowledged that they did sign the
foregoing instrument and that the same was their free act and deed.
|
(Notary
Seal)
|
Notary
Public
|
|
My
Commission
Expires:
|
10
