EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made this 31st day of August, 1998 by
and between THE ANCHOR BANK, a South Carolina banking corporation with principal
offices located at 0000 Xxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx 00000 ("Bank")
and Xxxxxxx X. Xxxx of Xxxxxx, South Carolina ("Employee").
RECITALS:
A. The Employee is, as of the date hereof, employed by the Bank as an
executive officer and the Bank desires to insure the Employee's
continued employment with the Bank.
B. The Bank and the Employee mutually desire that their employment
relationship be set forth under the terms of a written employment
agreement;
In consideration of the foregoing and of the promises and mutual agreements set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows :
1. Employment. The Bank agrees to employ the Employee, and the Employee
agrees to serve the Bank, on the terms and conditions, set forth herein.
2. Term of Employment. The employment of the Employee by the Bank, as
provided under Section 1, shall commence on the date hereof and end on
August 31, 2001 (the "Initial Term") unless further extended or sooner
terminated as hereinafter provided. On August 31, 1999 and on August 31 of
each year thereafter, the term of the Employee's employment hereunder shall
be extended automatically one (1) additional year, unless prior to the date
of such automatic extension the Bank shall have delivered to the Employee or
the Employee shall have delivered to the Bank written notice that the term of
the Employee's employment hereunder shall not be extended.
3. Position and Duties. The Employee shall serve as Vice Chairman of the
Bank and shall be responsible for all duties, authorities and responsibilities
as set forth in the Bylaws of the Bank and shall assume such additional
responsibilities and authority as may from time to time be assigned to him by
the Chief Executive Officer of the Bank or other executive designated by the
Board of Directors of the Bank. The Employee shall perform his responsibilities
and duties in the best interests of the Bank and its stockholders.
4. Place of Performance. In connection with the Employee's employment
hereunder, the Employee shall be based initially at the Bank's office located
in Marion, South Carolina, subject to reasonable travel or relocation
necessary to the business of the Bank.
5. Compensation and Benefits. In consideration of the Employee's
performance of his duties hereunder, the Bank shall provide the Employee
with the following compensation and benefits during the term of his employment
hereunder.
a. Base Salary. Commencing on the first day after the Effective
Date, and continuing for a period of three (3) years
thereafter, and for any extended term hereof, the
Employee shall serve on a full-time basis as Vice Chairman
of the Bank. During his full-time employment,
Employee shall receive a per annum salary of $185,000, payable
in equal installments in arrears on the last day of the month.
During the term of the Employee's employment under this
Agreement, the Bank's Board of Directors periodically will
review and may increase (but not decrease) the Employee's base
salary rate, all in accordance with the Bank's salary
administration policies and procedures in effect from time to
time; and each change in the Base Salary amount listed in this
Section shall become the new Base Salary amount. The Bank
shall have no obligation to increase the Employee's base
salary rate at any particular time or in any particular
amount, and any such increase shall be in the sole and
absolute discretion of the Chief Executive Officer of the Bank
or other executive designated by the Board of Directors of the
Bank.
b. Bonus and Incentive Compensation. The Bank shall pay to
the Employee with respect to each fiscal year during
the term of the Employee's employment hereunder, such
cash bonus as the Chief Executive Officer the Bank or other
executive designated by the Board of Directors of the Bank
shall determine in his sole discretion; provided,
however, in no event shall this paragraph b. be deemed to
require that any such bonus be paid with respect to any such
fiscal year. In addition, and without diminution of any other
compensation or benefit provided for in this Agreement, the
Employee may be given the opportunity to participate in
certain incentive compensation plans that may be adopted by
the Bank or in such plans that may be adopted or sponsored by
the Bank's parent corporation, Anchor Financial Corporation
("Anchor"), which participation opportunity may be offered to
the Employee in the full discretion of Anchor and the Bank.
c. Expenses. The Bank, as applicable, shall reimburse the
Employee for all proper and reasonable out-of-pocket expenses
incurred by the Employee in his performance of services
hereunder, including all such expenses of travel and living
expense while away from home on business of the Bank, provided
that such expenses are incurred and accounted for in
accordance with the regular policies and procedures
established by the Bank from time to time.
d. Vacations. The Employee shall be entitled to the number of
vacation days in each calendar year, and to compensation in
respect of earned but unused vacation days, determined in
accordance with the Bank's vacation plan as applicable to the
Employee, as well as to all paid holidays provided by the Bank
to its employees.
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e. Automobile. The Bank shall provide an automobile for
Employee's use.
f. Dues. The Bank shall pay Employee's regular monthly dues to
the Country Club of South Carolina.
6. Compensation and Benefits in the Event of Termination. In the event
of the termination of the Employee's employment by the Bank or by the Employee
during the term of this Agreement, compensation and benefits shall be paid as
set forth below.
a. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(i) "Cause" shall mean (A) the breach by Employee of
any material provision of this Agreement, provided that Bank
gives the Employee written notice of such failure and such
failure is not cured within thirty (30) days thereafter; (B)
the willful and continued failure by the Employee to
substantially perform his duties under this Agreement (other
than the Employee's inability to perform, with or without
reasonable accommodation, resulting from his incapacity due to
physical or mental illness or impairment), after a demand for
substantial performance is delivered to him by the Bank, which
demand specifically identifies the manner in which the
Employee is alleged to have not substantially performed his
duties; (C) the willful engaging by the Employee in misconduct
(criminal, immoral or otherwise) which is materially injurious
to the Bank, its officers, directors, shareholders, employees,
or customers, monetarily or otherwise; (D) the Employee's
conviction of a felony; or (E) the commission in the course of
the Employee's employment of an act of fraud, embezzlement,
theft or proven dishonesty, or any other illegal act or
practice, which would constitute a felony, (whether or not
resulting in criminal prosecution or conviction), or any act
or practice which the Bank shall, in good faith, deem to have
resulted in the Employee becoming unbondable under the Bank's
"banker's blanket bond."
(ii) "Change in Control" shall mean either:
(A) the acquisition, directly or indirectly, by any
"person" (as such term is defined for purposes of Section
13(d) and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")), other than by the Bank, Anchor or any
subsidiary controlled by Anchor or any person so defined who
on the date of this Agreement is a director of the Bank or
Anchor, or whose shares of stock therein are treated as
"beneficially owned" (as such term is defined for purposes of
Rule 13d-3 of the Exchange Act) by any such director, of the
beneficial ownership [as such term is defined for purposes of
Section 13(d) (1) of the Exchange Act] of shares in the Bank
or Anchor which, when added to any other shares the beneficial
ownership of which is held by such acquiror, shall have fifty
percent (50%) or more of the combined voting power of the Bank
or Anchor's then outstanding voting securities; or
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(B) the occurrence of any merger, consolidation or
reorganization to which the Bank or Anchor is a party and to
which the Bank or Anchor (or an entity controlled by the Bank
or Anchor) is not a surviving entity, or the sale of all or
substantially all of the assets of the Bank or Anchor.
The merger, combination, or consolidation of the Bank with
Anchor or any other wholly owned Subsidiary of Anchor shall
not be construed as a Change in Control.
(iii) "Date of Termination" shall mean: (A) if the Employee's
employment is terminated by reason of his death, his date of
death; (B) if the Employee's employment is terminated for
Disability, thirty (30) days after Notice of Termination is
given (provided that the Employee shall not have returned to
the performance of his duties as provided under sub-paragraph
(iv) of this paragraph a; or (C) if the Employee's employment
is terminated by action of either party for any other reason,
the date specified in the Notice of Termination; provided,
however, that if within thirty (30) days after any Notice of
Termination is given, the party receiving such Notice of
Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be
the date on which the dispute is finally resolved, either by
mutual written agreement of the parties, or by a final
judgment, order or decree of a court of competent jurisdiction
(the time for appeal therefrom having expired and no appeal
having been perfected).
(iv) "Disability" shall mean the Employee's failure to
satisfactorily perform the essential functions of his office
on a full-time basis for one hundred and eighty (180)
consecutive days, with or without accommodation, by reason of
the Employee's incapacity resulting from physical or mental
illness or impairment, except where within fifteen (15) days
after Notice of Termination is given following such absence,
the Employee shall have returned to the satisfactory, full
time performance of such duties. Any determination of
Disability hereunder shall be made by the Board of Directors
of the Bank in good faith and on the basis of the certificates
of at least three (3) qualified physicians chosen by it for
such purpose, one (1) of whom shall be the Employee's regular
attending physician.
(v) "Good Reason" shall mean either:
(A) Failure by the Bank to comply with any material
provision of this Agreement, provided that the
Employee gives the Bank (as applicable) written
notice of such failure and such failure is not cured
within thirty (30) days thereafter;
(B) Failure by the Bank to obtain the assumption of
its obligations under this Agreement by any
successor;
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(C) The failure by the Bank to comply with Section 5
of this Agreement; or
(D) Any purported termination of the Employee's
employment by action of the Bank which is not
effected pursuant to a Notice of Termination.
(vi) "Notice of Termination" shall mean a written notice which
shall include the specific termination provision under this
Agreement relied upon, and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis
for termination of the Employee's employment. Any purported
termination of the Employee's employment hereunder by action
of either party shall be communicated by delivery of a Notice
of Termination to the other party.
(vii) "Retirement" shall mean termination of the Employee's
employment pursuant to the Bank's regular retirement policy
applicable to the position held by the Employee at the time of
such termination.
b. Termination For Cause, Disability, Death, Retirement or Other
Than for Good Reason. In the event the Employee's employment
hereunder is terminated (A) by action of the Bank for Cause
prior to or coincident with or following a Change in Control;
(B) by action of the Employee not for Good Reason, at any
time; or (C) by reason of the Employee's death, Disability or
Retirement, the following compensation and benefits shall be
paid and provided the Employee (or his beneficiary):
(1) The Employee's base salary provided under paragraph a. of
Section 5 through the last day of the month in which the Date
of Termination occurs, at the annual rate in effect at the
time Notice of Termination is given (or death occurs), to the
extent unpaid prior to such Date of Termination;
(2) Any bonus under paragraph b. of Section 5 which has been
awarded prior to the Date of Termination, to the extent unpaid
prior to such date;
(3) Any benefits to which the Employee (or his beneficiary)
may be entitled as a result of such termination, under the
terms and conditions of the pertinent plans or arrangements in
effect at the time of the Notice of Termination under
paragraph d. of Section 5; and
(4) Any amounts due the Employee with respect to paragraph c.
or paragraph e. of Section 5 as of the Date of Termination.
c. Termination for Good Reason or Other Than For Cause,
Disability, Death or Retirement. In the event the
Employee's employment hereunder is terminated other than
by reason of the Employee's death, Disability or
Retirement, and (A) by action
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of the Employee coincident with, following, or prior to a
Change in Control and for Good Reason, or (B) by
action of the Bank coincident with, following or prior
to a Change in Control and other than for Cause, the Bank
shall pay and provide the Employee the compensation and
benefits stipulated under subparagraph b. immediately
above; provided, however, in addition thereto and without
setoff, the following compensation shall be paid and
provided the Employee:
For the remaining Initial Term or one year term thereafter of
this Agreement, (i) the Bank shall continue to pay to the
Employee the Base Salary provided for in Section 5.a. above
(at the Employee's Base Salary rate provided for in that
Section immediately prior to the Date of Termination) and,
(ii) at its sole cost and expense, the Bank will continue to
provide the Employee with the insurance coverages he would
have had had he remained as an employee of the Bank or with
insurance coverages substantially equivalent thereto, or, at
the Bank's request (and so long as such coverage reasonably
can be obtained by the Employee himself), the Employee will
obtain substantially equivalent insurance coverages from
insurance companies chosen by him and the Bank promptly will
reimburse Employee for premium costs actually incurred by him
from time to time for the same. If termination pursuant to
this section c. shall occur during the last twelve months of
the term of this Agreement, the Employee shall be entitled to
receive the Base Salary pursuant to section 5a. and the
insurance benefits discussed immediately above for a period of
twelve months subsequent to such termination. The Base Salary
shall continue to be payable in equal installments in arrears
on the last day of the month; provided, however if the payment
under this section, either alone or together with other
payments which the Employee has the right to receive from the
Bank, would constitute a "parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), such severance payment shall be reduced to the
largest amount as will result in no portion of the severance
payment under this Section 6 being subject to the excise tax
imposed by Section 4999 of the Code or the disallowance of a
deduction to the Bank under Section 280G(a) of the Code.
7. Confidentiality.
a. The Employee recognizes that his activities on behalf of the
Bank require considerable responsibility and trust. Relying on
the ethical responsibilities and undivided loyalty of the
Employee, the Bank has and will and Anchor and its
Subsidiaries will in the future entrust the Employee with
highly sensitive confidential, restricted and proprietary
information involving Confidential Information (as defined
below).
b. For the purposes of this Agreement, "Confidential Information"
means any data or information, that is material to the Bank,
Anchor or the Subsidiaries of Anchor, and
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not generally known by the public. To the extent consistent
with the foregoing definition, Confidential Information
includes (without limitation):
i. the sales records, circulation, profit and
performance reports, pricing manuals, training
manuals, selling and pricing procedures, financing
methods of the Bank, Anchor or the Subsidiaries of
Anchor, and all other business records of the Bank,
Anchor or the Subsidiaries of Anchor;
ii. the identities of the customers of the Bank, Anchor
or the Subsidiaries of Anchor, their specific
demands, and their current and anticipated
requirements for the products of the Bank, Anchor or
the Subsidiaries of Anchor.
iii. the business plans and internal financial statements
and projections of the Bank, Anchor or the
Subsidiaries of Anchor; and
iv. the specifics of any specialized products or services
of the Bank, Anchor or the Subsidiary of Anchor may
offer or provide to its customers.
c. The Employee recognizes the proprietary and sensitive
nature of the Bank, Anchor and its Subsidiaries' Confidential
Information. The Employee agrees to abide by all of the
Bank and Anchor's rules and procedures designed to
protect their Confidential Information and to preserve
and maintain all such information in strict confidence
during the Employee's engagement with the Bank and as long
thereafter as the Confidential Information remains, in the
sole opinion of the Bank, Anchor and its Subsidiaries,
proprietary and confidential to the Bank, Anchor and its
Subsidiaries. The Employee agrees not to use, disclose or
in any other way use or disseminate any Confidential
Information to any person not properly authorized by
the Bank, Anchor or the Subsidiaries of Anchor.
8. Return of Materials. Upon the request of the Bank, and in any event,
upon the termination of the Employee's employment, the Employee must return to
the Bank, Anchor or the Subsidiaries of Anchor and leave at the disposal
of the Bank, Anchor or the Subsidiaries of Anchor, all memoranda, notes,
records, and other documents pertaining to the business of the Bank, Anchor and
the Subsidiaries of Anchor, or the Employee's specific duties for such
entities (including all copies of such materials). The Employee must also
return to the Bank, Anchor and the Subsidiaries of Anchor, and leave at the
disposal of the Bank, Anchor and the Subsidiaries of Anchor, all materials
involving any Confidential Information of the respective entities.
9. Implementation.
a. The covenants contained herein shall be construed as covenants
independent of one another, and as obligations distinct from
any other contract between the Employee and the Bank. Any
claim the Employee
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may have against the Bank shall not constitute a defense
to enforcement by the Bank of this Agreement.
b. The covenants made by the Employee herein shall survive
termination of the Employee's employment, regardless of who
causes the termination and under what circumstances.
10. Restrictive Covenant. In consideration of the Bank's employment of
the Employee, the Employee agrees that in addition to any other limitation, for
a period of twelve (12) months after the termination of his employment
hereunder, the termination of this Agreement or the completion of Base Salary
payments pursuant to section 6.c. above, whichever is later, he will not, within
a twenty-five (25) mile radius of any operating office of Anchor or the Bank,
manage, operate or be employed by, participate in, or be connected in any manner
with the management, operation, or control of any banking business or savings
and loan business or financial services business. The Employee further agrees,
regardless of the circumstances of the termination of employment, that for a
period of twelve (12) months after the termination of his employment hereunder,
the termination of this Agreement or the completion of Base Salary payments
pursuant to section 6.c. above, he will not solicit the business or patronage,
directly or indirectly, from any customers of the Bank (or any other office of a
Subsidiary of Anchor if Employee should have been employed by and located at
such office) and the Employee will not seek to or assist others to persuade any
employee of the Bank engaged in similar work or related to the Bank's work to
discontinue employment with the Bank or seek employment or engage in any
business of the Bank. Furthermore, the Employee will not communicate to any
person, firm or corporation any information related to customer lists, prices,
secrets or other Confidential Information which he might from time to time
acquire with respect to the business of the Bank, Anchor, or its Subsidiaries,
or any of their affiliates. The Employee agrees to disclose the contents of this
Agreement to any subsequent employer for a period of twelve (12) months
following termination of his employment hereunder, the termination of this
Agreement or completion of Base Salary payments pursuant to 6.c. above,
whichever is later.
11. Remedies for Breach of Employment Contract. Irreparable harm shall be
presumed if the Employee breaches any covenant of this Agreement. The faithful
observance of all covenants in this Agreement is an essential condition to the
Employee's employment, and the Bank, Anchor and the Subsidiaries of Anchor are
depending upon absolute compliance. Damages would probably be very difficult to
ascertain if the Employee breached any covenant in this Agreement. This
Agreement is intended to protect the proprietary rights of the Bank, Anchor and
the Subsidiaries of Anchor in many important ways. In light of these facts, the
Employee agrees that any court of competent jurisdiction should immediately
enjoin any breach of this Agreement, upon the request of the Bank, Anchor and
the Subsidiaries of Anchor, and the Employee specifically releases the Bank,
Anchor, and the Subsidiaries of Anchor, from the requirement to post any bond in
connection with a temporary or interlocutory injunctive relief, to the extent
permitted by law.
12. Withholding. Any provision of this Agreement to the contrary
notwithstanding, all payments made by the Bank hereunder to the Employee or his
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as
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the Bank may reasonably determine should be withheld pursuant to any applicable
law or regulation. In lieu of withholding such amounts, the Bank may accept
other provisions to the end that they have sufficient funds to pay all
taxes required by law to be withheld in respect of any or all such payments.
13. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be sufficiently
given if and when mailed in the continental United States by registered or
certified mail, or personally delivered to the party entitled thereto, at the
address stated below or to such changed address as the addressee may have given
by a similar notice:
To the Bank: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Anchor Financial Corporation
0000 Xxx Xxxxxx
Xxxxxx Xxxxx, Xxxxx Xxxxxxxx 00000
with copy to: Xxx X. Xxxxxxxx
Xxxxxxx & XxXxxxxx, P.C.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
To the Employee: Xxxxxxx X. Xxxx
000 Xxxxx Xxxx
Xxxxxx, XX 00000
with copy to:
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14. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amount would still
be payable to him hereunder if he had continued to live, all such amounts,
except to the extent otherwise provided under this Agreement, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee, or if there be no such designee, to the Employee's estate.
15. Modification, Waiver or Discharge. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the executive and an authorized officer of
the Bank. No waiver by either party hereto at any time
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of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement; provided, however, that this Agreement shall no
supersede or in any way limit the right, duties or obligations that the
Employee or the Bank may have under any other written agreement between
such parties, under any employee pension benefit plan or employee welfare
benefit plan as defined under the Employee Retirement Income Security Act of
1974, as amended, and maintained by the Bank, or under any established
personnel practice or policy applicable to the Employee.
16. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
South Carolina. Any arbitration, proceeding or litigation pertaining to this
Agreement shall be located in Horry County, South Carolina or such other
location as determined by the Bank.
17. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not effect the validity or enforceability of any other provision
of this Agreement, which latter shall remain in full force and effect.
18. Miscellaneous.
a. No Right of Set-Off, Etc. There shall be no right of set-off
or counterclaim, in respect of any claim, debt or obligation
against any payments to the Employee, his beneficiaries or
estates provided for in this Agreement.
b. No Adequate Remedy At Law. The Bank and the Employee recognize
that each party will have no adequate remedy at law for breach
by the other of any of the agreements contained herein and, in
the event of any such breach, the Bank and the Employee hereby
agree and consent that the other shall be entitled to decree
of specific performance, mandamus, or other appropriate remedy
to enforce performance of such agreements.
c. Non-Assignability. No right, benefit, or interest hereunder
shall be subject to anticipation, alienation, sale,
assignment, encumbrance, charge, pledge, hypothecation, or
setoff in respect of any claim, debt or obligation, or
to execution, attachment, levy or similar process, or
assignment by operation of law. Any attempt, voluntary or
involuntary, to effect any action specified in the
immediately preceding sentence shall, to the full extent
permitted by law, be null, void and of no effect. Any of the
foregoing to the contrary notwithstanding, this provision
shall not preclude the Employee from designating one or more
beneficiaries to receive any amount that may be payable after
his death, and shall not preclude the legal representative of
the Employee's estate from assigning any right hereunder to
the
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person or persons entitled thereto under his will or, in
the case of intestacy applicable to his estate.
19. Enforcement of Agreement; Attorneys' Fees. In the event litigation is
commenced by the Employee against the Bank in seeking to obtain or enforce any
right, benefit or payment under this Agreement or to enforce any obligation of
the Bank described herein, then, provided the Employee shall prevail in such
litigation, the Bank shall be obligated to pay all reasonable expenses
(including without limitation all reasonable attorneys' fees and court costs)
paid or incurred by the Employee in connection with such litigation.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Employee and the Bank (by action of its duly
authorized officer) have executed this Agreement on the date first above
written.
THE ANCHOR BANK
ATTEST: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President & Chief Executive Officer
EMPLOYEE
ATTEST: /s/ M.E. Xxxxxxx /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
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