Exhbiti 99.2
THIS AGREEMENT IS SUBJECT TO ARBITRATION IN ACCORDANCE WITH SOUTH CAROLINA
UNIFORM ARBITRATION ACT SECTIONS 15-48-10 ET. SEQ.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of September 2,
2008, is made by and between Peoples Bancorporation, Inc. a South Carolina
corporation (the "Company" or the "Employer"), the parent company of Peoples
National Bank, a national bank (the "Bank"), and L. Xxxxxx Xxxxxxxxx, III, an
individual resident of South Carolina (the "Executive").
The Employer presently employs the Executive as President of the Bank.
The Employer recognizes that the Executive's contribution to the growth and
success of the Employer is substantial. The Employer desires to provide for the
continued employment of the Executive and to make certain changes in the
Executive's employment arrangements which the Employer has determined will
encourage the continued dedication of the Executive to the Employer and will
promote the best interests of the Employer and the Company's shareholders. The
Executive is willing to terminate his interests and rights under the existing
employment agreement with the Bank and to continue to serve the Employer on the
terms and conditions herein provided.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Employer shall continue to employ the Executive, and
the Executive shall continue to serve the Employer, as President of the Bank
upon the terms and conditions set forth herein. The Executive shall have such
authority and responsibilities consistent with his position as are set forth in
the Company's or the Bank's Bylaws or assigned by the Company's or the Bank's
board of directors (collectively, the "Board") from time to time. The Executive
acknowledges that the Company is the sole shareholder of the Bank and that the
Company, through its board of directors and officers, has the right to direct
the policies to be followed by the Bank and the Executive and has the right to
supervise the Executive in the conduct of his duties hereunder. Any action taken
by either the Company's or the Bank's board of directors under this Agreement
shall be binding upon the Executive. The Executive shall devote his full
business time, attention, skill and efforts to the performance of his duties
hereunder, except during periods of illness or periods of vacation and leaves of
absence consistent with Bank policy. The Executive may devote reasonable periods
to service as a director or advisor to other organizations, to charitable and
community activities, and to managing his personal investments, provided that
such activities do not materially interfere with the performance of his duties
hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company or the Bank. The Executive agrees to conduct himself in
accordance with the code of ethics for officers and employees adopted by the
Employer, as amended from time to time.
2. Term. Unless earlier terminated as provided herein, the Executive's
employment under this Agreement shall commence on the date hereof and end on
December 31, 2009 (the "Term"). The Board will meet annually in May (beginning
in May 2009) to consider whether to extend this Agreement for an additional year
and will provide the Executive with notice of the Board's decision. Each year,
if the Board determines to extend the Agreement for an additional year, then
this Agreement will extend for an additional year.
3. Compensation and Benefits. In consideration of Executive's services
and covenants hereunder, the Employer shall pay to Executive the compensation
and benefits described below during the Term (which compensation shall be paid
in accordance with the normal payroll practices of the Employer and shall be
subject to such deductions and withholdings as are required by law or policies
of the Employer in effect from time to time):
(a) The Employer shall pay the Executive an annual salary of
$248,000.00. Executive's salary will be reviewed annually by the Board of
Directors at or before the beginning of each of its fiscal years and, in the
sole discretion of the Board of Directors of the Bank, may be increased for such
year.
(b) The Executive shall be eligible to receive an annual incentive
cash bonus in accordance with the terms of any incentive plans adopted by the
Board of Directors of the Employer. Unless otherwise specified in such incentive
plans, any such bonuses shall be paid on the 10th day of the third month
following the end of the calendar year in which such bonus is earned. To the
extent that the bonus is paid for a partial year, the amount of the bonus will
be calculated by taking into account the performance of the Company for the
entire year and prorated based upon the period of the Executive's service during
the year. For purposes of this Agreement, a bonus shall not be deemed to be
earned prior to the date it is actually paid to the Executive except to the
extent that the Employer specifically provides otherwise in a writing delivered
to the Executive.
(c) The Executive shall be eligible to receive stock options,
restricted stock, or other awards pursuant to the Employer's long-term equity
incentive program or under any similar plan adopted by the Company. Any options
or similar awards shall be issued to Executive at an exercise price of not less
than the stock's current fair market value as of the date of grant, and the
number of shares subject to such grant shall be fixed on the date of grant.
(d) The Executive shall be eligible to receive a separate Salary
Continuation Agreement that provides nonqualified deferred compensation
benefits.
(e) The Executive shall be eligible to receive any other employee
benefits generally provided by the Company and the Bank to their most highly
ranking executives for so long as the Company or the Bank provides such
benefits. The Employer shall also provide Executive with an automobile and
reasonable club dues for one country club (the monthly payments for which shall
not exceed $400).
(f) The Company's obligation to make any payments owed to the
Executive under this Agreement shall be discharged to the extent compensation
payments are made by the Bank, and the Bank's obligation to make any payments
owed to the Executive under this Agreement shall be discharged to the extent
compensation payments are made by the Company.
4. Termination.
(a) The Executive's employment under this Agreement may be
terminated prior to the end of the Term only as provided in this Section 4.
Except as otherwise described below, any payment of base salary to the Executive
shall be paid in accordance with the normal payroll practices of the Employer
and any bonus payment shall be paid on the thirtieth day following the date of
termination and all such payments shall be subject to such deductions and
withholdings as are required by law or policies of the Employer in effect from
time to time.
2
(b) The Agreement will be terminated upon the death of the
Executive. In this event, the Employer shall pay Executive's estate any sums due
him as base salary and/or reimbursement of expenses through the end of the month
during which death occurred. The Employer shall also pay the Executive's estate
a bonus equal to a pro rata portion of the Executive's previous year's bonus.
(c) The Employer may terminate the Executive's employment upon the
Disability of the Executive for a period of 180 days. During the period of any
Disability leading up to the Executive's termination of employment under this
provision, the Employer shall continue to pay the Executive his full base salary
at the rate then in effect and all perquisites and other benefits (other than
any bonus) until the Executive becomes eligible for benefits under any long-term
disability plan or insurance program maintained by the Employer, provided that
the amount of any such payments to the Executive shall be reduced by the sum of
the amounts, if any, payable to the Executive for the same period under any
other disability benefit or pension plan covering the Executive. Furthermore,
the Employer shall also pay the Executive a bonus equal to a pro rata portion of
the Executive's previous year's bonus. Nothing herein shall prohibit the
Employer from hiring an acting executive officer to replace the Executive prior
to the expiration of this 180-day period.
(d) The Employer may terminate the Executive's employment for Cause
upon delivery to the Executive of a written notice of termination specifying the
reason for termination. If the Executive's employment is terminated for Cause
under this provision, the Executive shall receive only any sums due him as base
salary and/or reimbursement of expenses through the date of termination.
(e) The Employer may terminate the Executive's employment without
Cause upon delivery of a written notice of termination. If the Executive's
employment is terminated without Cause under this provision, subject to the
possibility of a six-month delay described below in Section 4(f), and subject to
potential reduction as described below in Section 9(d), beginning on the first
day of the month following date of the Executive's termination, and continuing
on the first day of the month for the next 24 months, the Employer shall pay to
the Executive severance compensation in an amount equal to 100% of his then
current monthly base salary. The Employer shall also pay the Executive a bonus
equal to a pro rata portion of the Executive's previous year's bonus.
(f) If when Executive's employment terminates he is a specified
employee within the meaning of Section 409A of the Internal Revenue Code, and if
the benefits under this Section 4(f) 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 following benefits
under this Section 4(f) shall be paid to the Executive as follows: severance
compensation in an amount equal to 7 times his then current monthly base salary
and any bonus owed to Executive will be paid in a single lump sum on the date
that is six months and one day following date of Executive's termination;
thereafter on the first day of the month for the next 17 months, the Employer
shall pay to the Executive severance compensation in an amount equal to 100% of
his then current monthly base salary.
(g) The Executive may terminate his employment at any time by
delivering a written notice of termination at least 14 days prior to such
termination, and such termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement. If the Executive terminates his
employment under this provision, the Executive shall receive any sums due him as
base salary and/or reimbursement of expenses through the date of such
termination.
(h) Upon the occurrence of a Change in Control of the Employer, and
regardless of whether the Executive remains employed by the Employer or its
successor following a Change in Control, the Executive shall be entitled to the
following:
3
(i) within 15 days, the Employer shall pay the Executive cash
compensation in an amount equal to his then current annual base
salary multiplied by three as well as a bonus equal to a pro rata
portion of the Executive's previous year's bonus, subject to the
provisions of Section 4(k) below;
(ii) the restrictions on any outstanding incentive awards (including
restricted stock) granted to the Executive under the Company's or
the Bank's long-term equity incentive program or any other incentive
plan or arrangement shall lapse and such awards shall become 100%
vested, all stock options and stock appreciation rights granted to
the Executive shall become immediately exercisable and shall become
100% vested, and all performance units granted to the Executive
shall become 100% vested.
(i) With the exceptions of the provisions of this Section 4, and the
express terms of any benefit plan under which the Executive is a participant, it
is agreed that, upon Executive's termination of employment, the Employer shall
have no obligation to the Executive for, and the Executive waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits). Unless otherwise stated in this Section 4, the effect of termination
on any outstanding incentive awards, stock options, stock appreciation rights,
performance units, or other incentives shall be governed by the terms of the
applicable benefit or incentive plan and/or the agreements governing such
incentives. At the time of termination of employment, and as a condition to the
Employer's obligation to pay any severance hereunder, the Employer and the
Executive shall enter into a release substantially in the form attached hereto
as Exhibit A acknowledging such remaining obligations and discharging both
parties, as well as the Employer's officers, directors and employees with
respect to their actions for or on behalf of the Employer, from any other claims
or obligations arising out of or in connection with the Executive's employment
by the Employer, including the circumstances of such termination.
(j) In the event that the Executive's employment is terminated for
any reason, as a condition to the Employer's obligation to pay any severance
hereunder, if the Executive is currently serving as a director of the Company
and/or the Bank, the Executive shall resign from such position.
(k) The parties intend that the severance payments and other
compensation provided for herein are reasonable compensation for the Executive's
services to the Employer and shall not constitute "excess parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder. In the event that the Employer's independent accountants
acting as auditors for the Employer on the date of a Change in Control determine
that the payments provided for herein constitute "excess parachute payments,"
then the compensation payable hereunder shall be reduced to an amount the value
of which is $1.00 less than the maximum amount that could be paid to the
Executive without the compensation being treated as "excess parachute payments"
under Section 280G. The allocations of the reduction required hereby among the
termination benefits payable to the Executive shall be determined by the
Executive.
(l) If the Executive is suspended or temporarily prohibited from
participating, in any way or to any degree, in the conduct of the Employer's or
the Bank's affairs by (1) a notice served under section 8(e) or (g) of Federal
Deposit Insurance Act (12 U.S.C. 1818 (e) or (g)) or (2) as a result of any
other regulatory or legal action directed at the Executive by any regulatory or
law enforcement agency having jurisdiction over the Executive (each of the
foregoing referred to herein as a "Suspension Action"), and this Agreement is
not terminated, the Employer's obligations under this Agreement shall be
suspended as of the earlier of the effective date of such Suspension Action or
the date on which the Executive was provided notice of the Suspension Action,
unless stayed by appropriate proceedings. If the charges underlying the
Suspension Action are dismissed, the Employer shall:
4
(i) pay on the first day of the first month following such dismissal
of charges (or as provided elsewhere in this Agreement) the
Executive all of the compensation withheld while the obligations
under this Agreement were suspended; and
(ii) reinstate any such obligations which were suspended.
Notwithstanding anything to the contrary herein, if the Executive is
removed or permanently prohibited from participating, in any way or to any
degree, in the conduct of the Employer's or the Bank's affairs by (1) an order
issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12
U.S.C. Section 1818 (e)(4) or (g)(1)) or (2) any other legal or law enforcement
action (each of the foregoing referred to herein as a "Removal Action"), all
obligations of the Executive under this Agreement shall terminate as of the
effective date of the Removal Action, but any vested rights of the parties
hereto shall not be affected.
Notwithstanding anything to the contrary herein, if the Employer or the
Bank are in default (as defined in section 3(x)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but this paragraph (4)(l)
shall not affect any vested rights of the parties hereto.
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.
Section 1828(k) and any regulations promulgated thereunder.
For the purposes of the following Sections 5-10, "Employer" shall mean
the Company and the Bank.
5. Ownership of Work Product. The Employer shall own all Work Product
arising during the course of the Executive's employment (prior, present or
future). For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, and other intellectual property rights in any
programming, documentation, technology or other work product that relates to the
Employer, its business or its customers and that the Executive conceives,
develops, or delivers to the Employer at any time during his employment, during
or outside normal working hours, in or away from the facilities of the Employer,
and whether or not requested by the Employer. If the Work Product contains any
materials, programming or intellectual property rights that the Executive
conceived or developed prior to, and independent of, the Executive's work for
the Employer, the Executive agrees to point out the pre-existing items to the
Employer and the Executive grants the Employer a worldwide, unrestricted,
royalty-free right, including the right to sublicense such items. The Executive
agrees to take such actions and execute such further acknowledgments and
assignments as the Employer may reasonably request to give effect to this
provision.
6. Protection of Trade Secrets. The Executive agrees to maintain in
strict confidence and, except as necessary to perform his duties for the
Employer, the Executive agrees not to use or disclose any Trade Secrets of the
Employer during or after his employment. "Trade Secret" means information,
including a formula, pattern, compilation, program, device, method, technique,
process, drawing, cost data or customer list, that: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
5
7. Protection of Other Confidential Information. In addition, the
Executive agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during his employment and for a period of
24 months following termination of the Executive's employment. "Confidential
Business Information" shall mean any internal, non-public information (other
than Trade Secrets already addressed above) concerning the Employer's financial
position and results of operations (including revenues, assets, net income,
etc.); annual and long-range business plans; product or service plans; marketing
plans and methods; training, educational and administrative manuals; customer
and supplier information and purchase histories; and employee lists. The
provisions of Sections 6 and 7 shall also apply to protect Trade Secrets and
Confidential Business Information of third parties provided to the Employer
under an obligation of secrecy.
8. Return of Materials. The Executive shall surrender to the Employer,
promptly upon its request and in any event upon termination of the Executive's
employment, all media, documents, notebooks, computer programs, handbooks, data
files, models, samples, price lists, drawings, customer lists, prospect data, or
other material of any nature whatsoever (in tangible or electronic form) in the
Executive's possession or control, including all copies thereof, relating to the
Employer, its business, or its customers. Upon the request of the Employer, the
Executive shall certify in writing compliance with the foregoing requirement.
9. Restrictive Covenants.
(a) No Solicitation of Customers. During the Executive's employment
with the Employer and for a period of 24 months thereafter, the Executive shall
not (except on behalf of or with the prior written consent of the Employer),
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or appropriate to or for a
Competing Business, or (B) attempt to solicit, divert, or appropriate to or for
a Competing Business, any person or entity that is or was a customer of the
Employer or the Bank at any time during the 12 months prior to the date of
termination and with whom the Executive has had material contact. The parties
agree that solicitation of such a customer to acquire stock in a Competing
Business during this time period would be a violation of this Section 9(a).
(b) No Recruitment of Personnel. During the Executive's employment
with the Employer and for a period of 24 months thereafter, the Executive shall
not, either directly or indirectly, on the Executive's own behalf or in the
service or on behalf of others, (A) solicit, divert, or hire away, or (B)
attempt to solicit, divert, or hire away, to any Competing Business located in
the Territory, any employee of or consultant to the Employer or the Bank,
regardless of whether the employee or consultant is full-time or temporary, the
employment or engagement is pursuant to written agreement, or the employment is
for a determined period or is at will.
(c) Non-Competition Agreement. During the Executive's employment
with the Employer and for a period of 24 months following any termination (as
opposed to expiration) of this Agreement, the Executive shall not (without the
prior written consent of the Employer) compete with the Employer or the Bank by,
directly or indirectly, forming, serving as an organizer, director or officer
of, or consultant to, or acquiring or maintaining more than a 1% passive
investment in, a depository financial institution or holding company therefore
if such depository institution or holding company has, or upon formation will
have, one or more offices or branches located in the Territory.
(d) Notwithstanding the foregoing, the Employer, in its sole
discretion, may opt within 15 days of the date of termination, to decrease the
6
restrictive periods described in Sections 9(a), 9(b), and 9(c) to periods not
less than 12 months. In such case, if such termination was due to a termination
without cause as provided under Section 4(e) of this Agreement, the Employer
shall decrease, pro rata, the amount paid to Executive as provided under Section
4(e) for each month the restrictive period is decreased.
(e) Notwithstanding the foregoing, the Executive may serve as an
officer of or consultant to a depository institution or holding company
therefore even though such institution operates one or more offices or branches
in the Territory, if the Executive's employment does not directly involve, in
whole or in part, the depository financial institution's or holding company's
operations in the Territory.
10. Independent Provisions. The provisions in each of the above
Sections 9(a), 9(b), and 9(c) are independent, and the unenforceability of any
one provision shall not affect the enforceability of any other provision.
11. Successors; Binding Agreement. The rights and obligations of this
Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Employer is a party, or any assignee of
all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
13. Arbitration; Governing Law. Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Easley, South Carolina, by three arbitrators in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrators' award in any court having jurisdiction. The
Company shall bear all costs and expenses, including Executive's reasonable
attorneys' fees, arising in connection with any arbitration proceeding pursuant
to this Section. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of South Carolina without giving effect
to the conflict of laws principles thereof. Any action brought by any party to
this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of South Carolina.
14. Non-Waiver. Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.
15. Enforcement. The Executive agrees that in the event of any breach
or threatened breach by the Executive of any covenant contained in Section 9(a),
9(b), or 9(c) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
7
would certainly result. Accordingly, an award of legal damages, if without other
relief, would be inadequate to protect the Employer. The Executive, therefore,
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or anticipated breach of any such covenant, and to obtain any other
available legal, equitable, statutory, or contractual relief. Should the
Employer have cause to seek such relief, no bond shall be required from the
Employer, and the Executive shall pay all attorney's fees and court costs which
the Employer may incur to the extent the Employer prevails in its enforcement
action.
16. Savings Clause. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
17. Certain Definitions.
(a) "Affiliate" shall mean any business entity controlled by,
controlling or under common control with the Employer.
(b) "Business" shall mean the operation of a depository financial
institution, including, without limitation, the solicitation and acceptance of
deposits of money and commercial paper, the solicitation and funding of loans
and the provision of other banking services, and any other related business
engaged in by the Employer or any of its Affiliates as of the date of
termination.
(c) "Cause" shall consist of any of (A) the commission by the
Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the material breach by the Executive of this
Agreement that, if susceptible of cure, remains uncured 10 days following
written notice to the Executive of such breach, (D) the receipt of any form of
notice, written or otherwise, that any regulatory agency having jurisdiction
over the Employer intends to institute any form of formal or informal (e.g., a
memorandum of understanding which relates to the Executive's performance)
regulatory action against the Executive or the Employer or the Bank (provided
that the Board of Directors determines in good faith, that the subject matter of
such action involves acts or omissions by or under the supervision of the
Executive or that termination of the Executive would materially advance the
Employer's compliance with the purpose of the action or would materially assist
the Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action); (E) the exhibition by the Executive
of a standard of behavior within the scope of his employment that is materially
disruptive to the orderly conduct of the Employer's business operations
(including, without limitation, substance abuse or sexual misconduct) to a level
which, in the Board of Directors' good faith and reasonable judgment, with the
Executive abstaining from participating in the consideration of and vote on the
matter, is materially detrimental to the Employer's best interest, that, if
susceptible of cure remains uncured 10 days following written notice to the
Executive of such specific inappropriate behavior; or (F) the failure of the
Executive to devote his full business time and attention to his employment as
provided under this Agreement that, if susceptible of cure, remains uncured 30
days following written notice to the Executive of such failure. In order for the
Board of Directors to make a determination that termination shall be for Cause,
the Board must provide the Executive with an opportunity to meet with the Board
in person.
(d) "Change in Control" shall mean as defined by Treasury Regulation
ss. 1.409A-3(i)(5).
8
(e) "Competing Business" shall mean any business that, in whole or
in part, is the same or substantially the same as the Business.
(f) "Disability" or "Disabled" shall mean as defined by Treasury
Regulation ss. 1.409A-3(i)(4).
(g) "Normal payroll practices" shall mean paid no less frequently
than monthly.
(h) "Territory" shall mean a radius of 25 miles from (i) the main
office of the Company or of the Bank or (ii) any branch office of the Company or
of the Bank.
(i) "Terminate," "terminated," "termination," or "termination of
employment" shall mean separation from service as defined by Regulation
1.409A-1(h).
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9
IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, effective as
of the date first above written.
[SIGNATURES OMITTED]
10
Exhibit A
Form of Release of Claims
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release (the "Agreement") is made between
L. Xxxxxx Xxxxxxxxx, III, an individual resident of South Carolina ("Employee"),
and Peoples Bancorporation, Inc., a South Carolina corporation (the "Employer"),
the parent company of Peoples National Bank, a national bank (the "Bank").
As used in this Agreement, the term "Employee" shall include the
employee's heirs, executors, administrators, and assigns, and the term
"Employer" shall include the Employer, its subsidiary banks, any other related
or affiliated entities, and the current and former officers, directors,
shareholders, employees, and agents of them.
On ______________, 2008, the Employer and Employee entered into an
Employment Agreement governing the relationship between the parties. Section
4(e) provides that the Employer may terminate the Employment Agreement without
cause. Section 4 of the Employment Agreement also provides that Employee shall
be entitled to severance pay if the Employment Agreement is terminated without
cause, on the condition that Employee enter into this release or a substantially
similar release.
Employee desires to receive severance pay and the Employer is willing
to provide severance pay on the condition the Employee enter into this
Agreement.
Now, in consideration for the mutual promises and covenants set forth
herein, and in full and complete settlement of all matters between Employee and
the Employer, the parties agree as follows:
1. Termination Date: The Employee agrees that his employment with the Employer
terminates as of ________________ (the "Termination Date").
2. Severance Payments: Subsequent to his Termination Date, the Employer shall
pay Employee severance pay as noted in Section 4(e) of the Employment Agreement,
dated ________ 2008, (the "Severance Payment"). Notwithstanding anything
contained herein to the contrary, all payments made under this Agreement shall
be subject to withholding for all applicable taxes, including, but not limited
to, income, employment and social insurance taxes, as shall be required by law.
3. Legal Obligations
The parties acknowledge that pursuant to Section 4(i) of the Employment
Agreement, they agreed that at the time of termination and as a condition of
payment of severance, they would enter into this release acknowledging any
remaining obligations and discharging each other from any other claims or
obligations arising out of or in connection with Employee's employment by the
Employer, including the circumstances of such termination.
Employee acknowledges that the Employer has no prior legal obligations
to make the payments described in Section 2 above which are exchanged for the
promises of Employee set forth in this Agreement. Neither this Agreement nor
11
Employer's offer to enter into this Agreement shall in any way be construed as
an admission by Employer that it has acted wrongfully with respect to Employee
or any other person, or that Employee has any rights whatsoever against
Employer. Employer specifically disclaims any liability to or wrongful acts
against Employee or any other person, on the part of itself, its shareholders,
officers, directors, employees, agents or representatives. It is specifically
agreed that the payments described in Section 2 are valuable and sufficient
consideration for each of the promises of Employee set forth in this Agreement
and are payments in addition to anything of value to which Employee is otherwise
entitled.
4. Waiver and Release:
a) Employee unconditionally releases and discharges the Employer from any
and all causes of action, suits, damages, claims, proceedings, and
demands that the Employee has ever had, or may now have, against the
Employer, whether asserted or unasserted, whether known or unknown,
concerning any matter occurring up to and including the date of the
signing of this Agreement.
b) Employee acknowledges that he is waiving and releasing, to the full
extent permitted by law, all claims against the Employer, including
(but not limited to) all claims arising out of, or related in any way
to, his employment with the Employer or the termination of that
employment, including (but not limited to) any and all breach of
contract claims, tort claims, claims of wrongful discharge, claims for
breach of an express or implied employment contract, defamation claims,
claims under Title VII of the Civil Rights Act of 1964 as amended,
which prohibits discrimination in employment based on race, color,
national origin, religion or sex, the Family and Medical Leave Act,
which provides for unpaid leave for family or medical reasons, the
Equal Pay Act, which prohibits paying men and women unequal pay for
equal work, the Age Discrimination in Employment Act of 1967, which
prohibits age discrimination in employment, the Americans with
Disabilities Act, which prohibits discrimination based on disability,
the Rehabilitation Act of 1973, the South Carolina Human Affairs Law,
any and all other applicable local, state and federal
non-discrimination statutes, the Employee Retirement Income Security
Act, the Fair Labor Standards Act, the South Carolina Payment of Wages
Law and all other statutes relating to employment, the common law of
the State of South Carolina, or any other state, and any and all claims
for attorneys' fees.
c) This Waiver and Release provision ((a) through (c) of this paragraph)
shall be construed to release all claims to the full extent allowed by
law. If any term of this paragraph shall be declared unenforceable by a
court or other tribunal of competent jurisdiction, it shall not
adversely affect the enforceability of the remainder of this paragraph.
d) The Employer unconditionally releases and discharges Employee from any
and all causes of action, suits, damages, claims, proceedings, and
demands that the Employer has ever had, or may now have, against
Employee, whether asserted or unasserted, whether known or unknown,
concerning any matter occurring up to and including the date of the
signing of this Agreement with the exception of any claims for breach
of trust, or any act which constitutes a felony or crime involving
dishonesty, theft, or fraud.
e) The parties specifically agree that this release does not cover, and
Employee expressly reserves, indemnification rights existing to him as
a current or former director and/or officer of Employer under the
Articles and Bylaws of the Employer or of the Bank and pursuant to
applicable state law and in accordance with any D&O insurance policy
existing for former officers and directors of the Employer or the Bank.
12
5. Restrictive Covenants and Other Obligations
The parties agree that Section 5 - "Ownership of Work Product," Section 6 -
"Protection of Trade Secret," Section 7 - "Protection of Confidential
Information," Section 8 - "Return of Materials," Section 9 - "Restrictive
Covenants," Section 10 - "Independent Provisions," Section 15 - "Enforcement,"
and Section 16 - "Savings Clause," of the Employment Agreement shall remain in
full force and effect and that Employee will perform his obligations under those
sections and those sections of the Employment Agreement are incorporated by
reference as if set forth fully herein. In the event Employee breaches any
obligation under this Section 5, the Employer's obligation to make severance
payments to Employee shall terminate immediately and the Employer shall have no
further obligations to Employee.
6. Duty of Loyalty/Nondisparagement
The parties shall not (except as required by law) communicate to
anyone, whether by word or deed, whether directly or through any intermediary,
and whether expressly or by suggestion or innuendo, any statement, whether
characterized as one of fact or of opinion, that is intended to cause or that
reasonably would be expected to cause any person to whom it is communicated to
have a lowered opinion of the other party.
7. Confidentiality Of The Terms Of This Agreement
Employee agrees not to publicize or disclose the contents of this
Agreement, including the amount of the monetary payments, except (i) to his
immediate family; (ii) to his attorney(s), accountant(s), and/or tax
preparer(s); (iii) as may be required by law; or (iv) as necessary to enforce
the terms of this Agreement. Employee further agrees that he will inform anyone
to whom the terms of this Agreement are disclosed of the confidentiality
requirements contained herein. Notwithstanding the foregoing, the parties agree
that where business needs dictate, Employee may disclose to a third party that
he has entered into an agreement with the Employer, which agreement contains
restrictive covenants including noncompetition and nondisclosure provisions, one
or more of which prohibit him from performing the requested service.
Employee recognizes that the disclosure of any information regarding
this Agreement by him, his family, his attorneys, his accountants or financial
advisors, could cause the Employer irreparable injury and damage, the amount of
which would be difficult to determine. In the event the Employer establishes a
violation of this paragraph of the Agreement by Employee, his attorneys,
immediate family, accountants, or financial advisors, or others to whom Employee
disclosed information in violation of the terms of this Agreement. The Employer
shall be entitled to injunctive relief without the need for posting a bond and
shall also be entitled to recover from Employee the amount of attorneys' fees
and costs incurred by the Employer in enforcing the provisions of this
paragraph.
8. Cessation of Authority; Continued Cooperation
a) Employee acknowledges, understands and agrees that following the
Termination Date, Employee is not authorized to incur any expenses,
13
obligations or liabilities, or to make any commitments on behalf of
Employer, except as provided in subsection (b). Employee agrees to
submit to the then-current Chairman of the Board of the Employer,
within three days of the Termination Date, any and all expenses that
were incurred by Employee on behalf of Employer prior to the
Termination Date (which have not previously been reimbursed) and any
and all contracts or other obligations entered into by Employee on
behalf of Employer prior to the Termination Date (which have not
previously been disclosed), including but not limited to any loans
agreed to or memoranda of understanding entered into on behalf of the
Employer. Employer agrees to reimburse Employee for reimbursable
expenses incurred by Employee through his Termination Date which have
not yet been reimbursed within 60 days following the Termination Date
and which are promptly submitted to Employer 30 days following the
Termination Date. Any expenses submitted to the Employer more than 30
days following the Termination Date shall not be eligible for
reimbursement. Reimbursements provided for in this Section 8(a) shall
otherwise be processed pursuant to Employer's standard policies and
procedures relating to reimbursement of expenses. In no event shall any
reimbursement under this Section 8(a) be paid after the last day of the
taxable year following the taxable year in which the expense was
incurred, nor shall the amount of reimbursable expenses incurred in one
taxable year affect the expenses eligible for reimbursement in any
other taxable year. The right to a reimbursement or an in-kind benefit
under this Section 8(a) will not be subject to liquidation or exchange
for another benefit.
b) Notwithstanding the provisions of Section 8(a), Employee agrees that he
will cooperate fully with the Employer in the future regarding any
matters in which he was involved during the course of his employment,
and in the defense or prosecution of any claims or actions now in
existence or which may be brought or threatened in the future against
or on behalf of the Employer. Employee's cooperation in connection with
such matters, actions and claims shall include, without limitation,
being available to meet with the Employer's officials regarding
personnel or commercial matters in which he was involved; to prepare
for any proceeding (including, without limitation, depositions,
consultation, discovery or trial); to provide affidavits; to assist
with any audit, inspection, proceeding or other inquiry; and to act as
a witness in connection with any litigation or other legal proceeding
affecting the Employer. Employee further agrees that should he be
contacted (directly or indirectly) by any person or entity adverse to
the Employer, he shall within 48 hours notify the then-current Chairman
of the Board of the Employer. Employee shall be reimbursed for any
reasonable costs and expenses incurred in connection with providing
such cooperation.
9. Entire Agreement; Modification of Agreement
Except as otherwise expressly noted herein, this Agreement constitutes
the entire understanding of the parties and supersedes all prior discussions,
understandings, and agreements of every nature between them relating to the
matters addressed herein. Accordingly, no representation, promise, or inducement
not included or incorporated by reference in this Agreement shall be binding
upon the parties. Employee affirms that the only consideration for the signing
of this Agreement are the terms set forth above and that no other promises or
assurances of any kind have been made to him by the Employer or any other entity
or person as an inducement for him to sign this Agreement. This Agreement may
not be changed orally, but only by an agreement in writing signed by the parties
or their respective heirs, legal representatives, successors, and assigns.
14
10. Partial Invalidity
The parties agree that the provisions of this Agreement and any
paragraphs, subsections, sentences, or provisions thereof shall be deemed
severable and that the invalidity or unenforceability of any paragraph,
subsection, sentence, or provision shall not affect the validity or
enforceability of the remainder of the Agreement.
11. Waiver
The waiver of the breach of any term or provision of this Agreement
shall not operate as or be construed to be a waiver of any other subsequent
breach of this Agreement.
12. Successors and Assigns
This Agreement shall inure to and be binding upon the Employer and
Employee, their respective heirs, legal representatives, successors, and
assigns.
13. Governing Law
This Agreement shall be construed in accordance with the laws of the
state of South Carolina and any applicable federal laws.
14. Headings
The headings or titles of sections and subsections of this Agreement
are for convenience and reference only and do not constitute a part of this
Agreement.
15. Notice
Any notice or communication required or permitted under this Agreement
shall be made in writing and sent by certified mail, return receipt requested,
addressed as follows:
If to Employee:
[INSERT]
If to the Employer:
[INSERT]
16. Liability for Taxes:
The Employer and the Employee desire that the benefits and payments
described in this Agreement be exempt from, or comply with, the requirements of
Section 409A of the Internal Revenue Code. To that end, if the Employee suggests
any amendments to this Agreement that the Employee believes will make certain
benefits or payments under this Agreement exempt from or compliant with Section
409A, the Employer will use reasonable efforts to cooperate with the Employee in
negotiating and implementing any such amendments, provided that such amendments
do not, in the sole discretion of the Employer, have a cost to the Employer
15
(apart from legal fees associated with negotiating, drafting and submitting any
required regulatory filings), or adversely affect the Employer in any manner.
Notwithstanding the foregoing, the Employer makes no guarantee as to any tax
consequences relating to this Agreement, and the Employer does not represent or
warrant that any payments or benefits under this Agreement are exempt from or
compliant with Section 409A. Further, the Employee shall be responsible for his
own taxes under this Agreement, including, if and to the extent applicable,
taxes under Section 409A and 4999 of the Internal Revenue Code.
17. Representations: Employee acknowledges that:
a) He has read this Agreement and understands its meaning and effect.
b) He has knowingly and voluntarily entered into this Agreement of his own
free will.
c) By signing this Agreement, Employee has waived, to the full extent
permitted by law, all claims against the Employer based on any actions
taken by the Employer up to the date of the signing of this Agreement,
and the Employer may plead this Agreement as a complete defense to any
claim the Employee may assert.
d) He would not otherwise be entitled to the consideration described in
this Agreement, and that the Employer is providing such consideration
in return for Employee's agreement to be bound by the terms of this
Agreement.
e) He has been advised to consult with an attorney before signing this
Agreement.
f) He has been given up to 21 days to consider the terms of this
Agreement.
g) He has seven days, after Employee has signed the Agreement and it has
been received by the Employer, to revoke it by notifying the Chairman
of the Board of his intent to revoke acceptance. For such revocation to
be effective, the notice of revocation must be received no later than
5:00 p.m. on the seventh day after the signed Agreement is received by
the Employer. This Agreement shall not become effective or enforceable
until the revocation period has expired.
h) He is not waiving or releasing any rights or claims that may arise
after the date the Employee signs this Agreement.
As to Employee:
------------------------- ---------------------------------
Date L. Xxxxxx Xxxxxxxxx, III
As to the Employer:
------------------------- ---------------------------------
Date Chairman of the Board
16
