EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (sometimes referred to below as the
"Agreement"), Made and entered into this the day of October 21, 1996, by and
between XXXXXX X. XXXXX, a resident of Cabarrus County, North Carolina
(hereinafter referred to as "Employee"); and CABARRUS BANK OF NORTH CAROLINA, a
corporation with its principal office in Concord, North Carolina (hereinafter
referred to as "Employer").
WHEREAS, the Employer desires to secure the future services of the
Employee and to that end desires to enter into this Employment Agreement with
Employee, upon the terms and conditions herein set forth, which replaces and
supersedes all prior employment contracts, agreements or understandings, if any,
between the Employee and the Employer; and,
WHEREAS, the Employee wishes to accept employment and enter into this
Employment Agreement with Employer effective as of April 1, 1996;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and of other good and valuable consideration, the receipt
and sufficiency of which are mutually acknowledged, the parties hereto,
intending legally to be bound, agree as follows:
Section 1. Agreement of Employment. Employer hereby agrees to employ
the Employee and Employee hereby agrees to become and remain employed by
Employer for the term, and upon and subject to the terms and conditions
hereafter set forth.
Section 2. Term. Employer and Employee hereby agree that Employee shall
become employed by Employer under the terms of this Agreement as of April 1,
1996 (the "Commencement Date"), and shall remain employed by Employer for a
period of six (6) years and six (6) months, unless sooner terminated pursuant to
the terms hereof (the "Employment Period").
Section 3. Employee Representations. Employee represents to Employer
that Employee is not subject to an employment agreement with any other employer,
nor to any other agreements under the terms of which he may be prohibited from
accepting employment with Employer, and that Employee may accept employment with
Employer effective as of the Commencement Date.
Section 4. Duties of Employee.
(a). Subject to the supervision and pursuant to the orders, advice and
directions of the Board of Directors of the Employer, Employee shall
perform his assigned duties as President of Employer and shall perform
such other duties as are customarily performed by one holding such
positions in other, the same or similar businesses or enterprises as
that engaged in by Employer. (b). Employee agrees that he will at all
times faithfully, industriously, and to the best of his ability,
experience and talents, perform all of the duties that may be
reasonably required of and from him pursuant to the express and implied
terms hereof, to the reasonable satisfaction of the Board of Directors
of Employer. Such duties shall be rendered at Employer's offices in
Concord, North Carolina, and at such other place or places as the
interests, needs, business and opportunities of Employer shall
reasonably require or make advisable. (c). Employee hereby agrees to
refrain from engaging in any ventures or enterprises which might
interfere with the performance of his express and implied duties
hereunder. Employee shall at all times conduct himself in a manner that
will not prejudice or injure the reputation of Employer, its other
employees or any of its affiliates. Section 5. Employer's Right to
Benefits of Work Performed. Employer shall be entitled to all of the
benefits, emoluments, and profits arising from or incident to any and
all work, services, and advice of the Employee performed or rendered
in the course of Employee's employment hereunder.
Section 6. Compensation, Expenses and Benefits.
(a). Employer shall pay to Employee, and Employee shall accept from
Employer, during the Employment Period, and in consideration for the
services to be performed by Employee, a salary at the rate of
$91,249.00 per annum (the "Annual Salary"), less deductions required by
law and Employee authorized deductions, payable in such equal periodic
installments as Employer may determine, but not less frequently than
monthly. Provided, however, that each year the salary of the Employee
shall be reviewed and a salary amount set for the following year by
mutual agreement with the Board of Directors. In the event that a
mutual agreement cannot be reached then the salary shall remain at the
same level as that of the previous year. (b). In addition to the Annual
Salary described in Section 6(a) above, Employer agrees to reimburse
Employee promptly (in accordance with policies and procedures adopted
by the Board of Directors of Employer) for all reasonable and necessary
expenses incurred by Employee in connection with the Employer's
business, including, without limitation, all reasonable and necessary
expenses of travel, lodging, entertainment, and meals away from home
incurred by Employee in the course of his employment hereunder.
Employee agrees to keep and maintain such records of the aforesaid
expenses as Employer may require and to account to Employer therefore
prior to any such reimbursement. Employee shall comply with all
reasonable and lawful policies and procedures applied by Employer from
time to time to its employees generally and relating to or regulating
the nature and extent of reimbursement expenses, and the manner of
accounting and reimbursement therefor. (c). Employer hereby agrees to
make available to Employee, during the Employment Period, all benefits
which are generally available to similarly situated employees of the
Employer, subject to and on a basis consistent with the terms and
conditions of such benefits. In addition, Employer agrees to provide
Employee with the following benefits:
(1) A non-contributing qualified employee profit-sharing plan;
additionally, participation in the Employer's 401(K) Plan. (2)
A non-contributing employee's group life insurance plan which
will provide life insurance for Employee in the amount equal
to two (2) times Employee's annual salary (or a maximum of
$250,000.00) during all times that Employee remains an active
employee. (3) A non-contributing accident and health insurance
plan for the payment of medical care expenses for Employee.
(4) A non-contributing deferred compensation plan pursuant to
the terms of Exhibit "A" attached. (5) A non-contributing
disability income plan wherein the Employer will provide the
Employee with the following disability income payable to age
65 and after a ninety (90) day waiting period: disability
income equal to sixty percent (60%) of the Employee's annual
salary as it exists from time to time up to a maximum benefit
of $5,000.00 per month.
The Employer, in its sold discretion, may apply for
additional insurance in its own name and for its own benefit
covering the Employee for life, medical, or disability
insurance, in any amount deemed advisable and the Employee
shall have no right, title or interest therein. The Employee
shall submit to any required examination and shall execute and
assign and/or deliver such application and policies necessary
to effectuate such insurance coverage.
The Employee may require the Employee to have a
thorough annual physical examination and will reimburse the
Employee for the expense.
Except as otherwise specifically set forth herein, nothing herein shall
be construed to impose upon Employer any legal obligation to establish
or maintain any particular benefit or benefits for any of its
employees. (d). Employee shall also be eligible to receive an annual
bonus based upon performance criteria to be determined by the Board of
Directors of the Employer. The Board of Directors of the Employer shall
determine the performance criteria to be meet by Employee for each
fiscal year of Employer or other twelve (12) month period designated by
the Board of Directors of the Employer during the term of this
Agreement prior to the commencement of each fiscal year or such other
period and shall cause such criteria to be communicated in writing to
Employee. The amount of Employee's bonus shall be determined based upon
the level of achievement of Employee as compared with the established
performance criteria. The final determination concerning the levels of
achievement attained by Employee and the amount of each such annual
bonus shall be made by the Board of Directors of the Employer in its
sole judgment. Any bonus earned by the Employee pursuant to this
Section 6(d) shall be payable to Employee, less deductions required by
law and Employee authorized deductions, no later than March 31
following the year to which such bonus relates. The bonus provided for
hereunder shall be payable with respect to the fiscal year or such
other period immediately preceding the year in which the bonus is paid
and shall not be payable if the Employee is terminated for cause prior
to the end of the fiscal year or such other period for which the bonus
is to be paid. In the event that the Employee dies, is terminated
because of illness or disability as provided in Section 9 of this
Agreement or is terminated by the Employer without cause prior to the
end of the fiscal year or such other period for which such bonus is to
be paid, a pro rata portion of such bonus, if otherwise earned, shall
nevertheless be paid to the Employee or his estate, as the case may be.
The pro rata portion shall be based upon the number of days the
Employee was employed by the Employer during such fiscal year as
compared to 365. Section 7. Non-Competition. (a). While Employee is
entitled by Employer under this Agreement and for two (2) years after
the termination of the employment of Employee hereunder for any reason
whatever other than termination of the employment of Employee by
Employer without cause pursuant to Section 9(d), Employee will not,
directly or indirectly, own, manage, operate, control or participate in
the ownership, management, operation or control of, or be connected
with as an officer, employee, partner, director, consultant, or
otherwise, or have any financial interest in, or aid or assist anyone
else in the conduct of, any enterprise which engages in, or is about to
engage in, or otherwise carries on, any business activity which is in
competition with businesses conducted by the Employer or its affiliates
in any geographical region in which the Employer or its affiliates
conducts such businesses during the term of this Agreement; [provided,
however, that notwithstanding the foregoing the Employee shall be
entitled to acquire as a passive investment a proprietary interest not
to exceed 3% of the equity of any publicly-held company.] (b). While
Employee is employed by the Employer under this Agreement and for a
period of two (2) years after the termination of the employment of
Employee hereunder, for any reason whatever, Employee will not,
directly or indirectly, employ, solicit for employment, or advise or
recommend to any other person that such person employ or solicit for
employment, any person employed by the Employer or its affiliates. (c).
While Employee is employed by the Employer under this Agreement and for
a period of two (2) years after the termination of the employment of
Employee hereunder, for any reason whatever, Employee shall not,
directly or indirectly, solicit or advise or recommend to any other
person that such person solicit, any customer of the Employer or its
affiliates for the purpose of obtaining any business of such customer.
(d). For purposes of this Section 7, "Employer" shall also include the
Employer's parent company, sister companies, subsidiaries and other
affiliates. Section 8. Nondisclosure of Confidential Information. (a).
Employee covenants and agrees to treat as confidential and not to
disclose and to use only for the advancement of the interests of
Employer all information, plans, records, trade secrets, business
secrets, and confidential or other data of Employer, submitted to
Employee or complied, received, or otherwise discovered by Employee
from time to time in the course of his employment by Employer for use
in Employer's business, which Employee knows to have been acquired by
him in confidence or which he knows would not otherwise be available to
competitors of Employer or to members of the public and which would not
otherwise become known to said competitors or members of the public.
(b). Employee agrees that upon termination of his employment with
Employer, for any reason, voluntary or involuntary, with or without
cause, he will immediately return to the Employer any property,
customer lists, information forms, formulae, plans, documents or other
written or computer material or data, software or firmware, or copies
of the same, belonging to Employer or its affiliates, or any of their
customers, within his possession, and will not at any time thereafter
copy, reproduce or otherwise facilitate the future disclosure of the
same. Employee further agrees that he will not retain or use for his
account at any time any trade names, trade xxxx, service xxxx, or other
proprietary business designation used or owned in connection with the
business of the Employer or its affiliates. (c). Employee agrees that
all inventions, designs, improvements, writings and discoveries made
during the term of this Agreement and pertaining to the business
conducted by the Employer shall be the exclusive property of the
Employer. Employee shall assist the Employer in obtaining patents and
copyrights on all such inventions, designs, improvements, writings and
discoveries deemed suitable for patent or copyright by the Employer,
and shall execute all documents and do all things necessary to obtain
letters, patents, or copyrights, and to vest the Employer with full and
exclusive title thereto, and protect the same against infringements by
others. (d). Notwithstanding any provision of this Agreement to the
contrary, the obligation of Employee to vest in Employer exclusive
title to inventions, designs, improvements, writings and discoveries
shall not extend or apply to inventions, designs, improvements,
writings or discoveries developed or made by Employee wholly and
completely outside the course and scope of his employment under this
Agreement, entirely on his own time, and without using Employer's
equipment, supplies, facilities or trade secret information. Employee
acknowledges and agrees that an exclusion under this Section 8(d) shall
not apply where Employee's invention, design, improvement, writing or
discovery: (1) relates, directly or indirectly, to Employer's business
or businesses or actual or demonstrable anticipated research or
development; or (2) results from any work performed by Employee for
Employer. Employee shall bear the burden of proof in establishing an
exclusion under this Section 8(d). (e). For purposes of this Section 8,
the term "Employer" shall also include the Employer's parent company,
sister companies, subsidiaries and other affiliates. Section 9.
Termination. If the term of this Agreement has not sooner expired by
lapse of time, the term of Employee's employment hereunder shall termi-
nate upon the occurrence of any of the following:
(a). Upon the death of the Employee.
(b). As a result of the disability of Employee. If it is determined
that Employee is disabled and that such disability is likely to be
permanent (herein referred to as a "Determination of Permanent
Disability"), Employer may terminate this Agreement. Said termination
shall not be effective until such time as Employer has given written
notice to Employee, at the address specified in Section 11, of its
intent to terminate this Agreement. For the purposes of this Section
9(b), the term "Disability" shall mean the Employee's inability to
perform functions normally performed for Employer by the Employee. A
"Determination of Permanent Disability" may be made at the request of
either the Employer or Employee; provided, however, that in the event
Employee is unable, due to his disability, to make such a requests, his
spouse or other designee may make a request in his stead. In the event
of a request by either Employee or Employer for a "Determination of
Permanent Disability", each of Employee and Employer shall designate
one doctor to participate in the determination; provided, however, that
if Employee is unable, due to his disability, to make such a
designation, his spouse or other designee shall make the designation in
his stead. If the two doctors so designated agree on a determination
required by this Section 9(b), such determination shall be final. If
the two doctors fail to agree, they shall designate a third doctor to
make the determination required by this Section 9(b), which
determination shall be final. (c). At the election of Employer, for
cause. "Cause" shall mean just and reasonable cause, including without
limitation, (1) persistent incompetency or inefficiency, failure to
follow reasonable instructions received from the Board of Directors of
the Employer or its delegate, willful misconduct, dishonesty,
alcoholism, addiction to drugs, or convictions of a felony or a
misdemeanor (but not an infraction), (2) material breach of any
covenant contained in this Agreement, including without limitation,
failure to devote substantially all business time to the business of
the Employer. (d). At the election of Employer, for reasons other than
for cause. "Cause" shall have the definition stated above. Upon
termination under this Section 9, Employee's right to further
compensation and benefits under this Agreement shall cease; provided,
however, that Employee shall remain entitled to any unpaid compensation
and benefits accrued prior to such termination and to any expense
reimbursements to which he was entitled at the date of such
termination, and if Employee's employment is terminated without cause
or due to his death or disability, such termination shall not affect
Employee's or Employee's personal representative's right to receive
additional payments pursuant to Section 6(d)
of this Agreement. Notwithstanding anything herein to the contrary, in
the event that the employment of the Employee is terminated by the
Employer without cause during the term of this Agreement, the Employer
shall continue to pay the Annual Salary and provide the benefits set
forth in Section 6 of this Agreement [except for the annual bonus, the
payment of which is controlled by Section 6(d)] for a period of twelve
(12) months after the termination of Employee, as severance pay.
Notwithstanding anything herein to the contrary, the terms contained in
Sections 7 and 8 hereof shall survive the termination of this
Agreement. In limitation of Employer's obligations to Employee in the
event that Employee is terminated by Employer pursuant to Section 9(d),
should the Employee become employed within the period during which the
Annual Salary is being paid him, then in that event the Employer shall
receive credit for, and shall not be obligated to pay Employee, a sum
equal to the gross wages from Employee's new employment (including
self-employment) (but not including unearned income [dividends,
interest, etc.] or income that the Employee began receiving prior to or
while in the employ of the Employer, it being the intent of the parties
that the Employer receive credit for new and earned income of the
Employee that replaces income previously earned from the Employer) that
is paid to Employee. [Example: If Employer's monthly obligation is to
pay Employee $5,000.00 per month in gross wages (calculated by
reference to his Annual Salary as stated above), and if Employee is
paid $3,000.00 per month in gross wages by his new employer (or by
self-employment as the case may be), then Employer's obligation to
Employee is reduced to $2,000.00 per month.] Should the gross wages
paid to Employee in his new employment equal or exceed the amount owed
to him by Employer, then Employer shall have no further obligations to
Employee hereunder. For purposes of allowing Employer to know of
Employee's income, if any, following termination that requires Employer
to continue to pay Employee his Annual Salary, during such time the
Employee shall disclose to Employer by method satisfactory to Employer
the gross income earned by Employee. Such disclosure shall be made at
least quarterly. During such period the Employee shall have the
affirmative duty to use his best efforts to seek and obtain employment.
Section 10. Change of Control. If, at any time within thirty-six (36)
months following a "Change in Control" as defined hereafter, Employee is
terminated by Employer without cause pursuant to Section 9(d), Employer shall
continue to pay the Annual Salary and provide the benefits set forth in Section
6 of this Agreement for a period of twenty-four (24) months after the
termination of Employee as severance pay (this compensation to be in lieu of
that severance compensation set forth in Section 9 for termination without
cause). Said Annual Salary shall be paid periodically and on the same schedule
as that prior to Employee's termination. In limitation of the foregoing, should
the Employee become employed within the period during which the Annual Salary is
being paid him, then in that event the Employer shall receive credit for, and
shall not be obligated to pay Employee, a sum equal to the gross wages from
Employee's new employment (including self-employment) (but not including
unearned income [dividends, interest, etc.] or income that the Employee began
receiving prior to or while in the employ of the Employer, it being the intent
of the parties that the Employer receive credit for new and earned income of the
Employee that replaces income previously earned from the Employer) that is paid
to Employee. [Example: If Employer's monthly obligation is to pay Employee
$5,000.00 per month in gross wages (calculated by reference to his Annual Salary
as stated above), and if Employees is paid $3,000.00 per month in gross wages by
his new employer (or by self-employment as the case may be), then Employer's
obligation to Employee is reduced to $2,000.00 per month.] Should the gross
wages paid to Employee in his new employment equal or exceed the amount owed to
him by Employer, then Employer shall have no further obligation to Employee
hereunder. For purposes of allowing employer to know of Employee's income, if
any, following termination that requires Employer to continue to pay Employee
his Annual Salary, during such time the Employee shall disclose to Employer by
method satisfactory to Employer the gross income earned by Employee. Such
disclosure shall be made at least quarterly. During such period the Employee
shall have the affirmative duty to use his best efforts to see and obtain
employment. Additionally, in the event of such a Section 9(d) termination
occurring within thirty-six (36) months following a Change of Control, the
provisions of Section 7 shall not be effective, and the vesting schedule in the
Employee's deferred compensation agreement attached hereto as Exhibit "A" shall
automatically be accelerated such that the Employee shall be entitled to the
same benefits under the agreement as if the Employee had remained in the
employment of the Employer through August 31, 2002.
Notwithstanding anything in this Agreement to the contrary, the
Employee may, at any time following a change of control, voluntarily leave the
employment of the Employer. In such an event the provisions of Section 7 shall
be effective, and the vesting schedule in the Employee's deferred compensation
agreement attached hereto as Exhibit "A" shall automatically be accelerated such
that the Employee shall be entitled to the same benefits under the agreement as
if the Employee had remained in the employment of the Employer through August
31, 2002. Additionally, the Employee shall be entitled to any unpaid
compensation and benefits accrued prior to the Employee leaving the employment
of the Employer and to any expense reimbursements to which he was entitled prior
to ending his employment. He shall not be paid any salary which was not accrued
prior to the Employee leaving the employment of the Employer. He shall not be
paid an annual bonus pursuant to Section 6 for the year he leaves the employment
of the Employer.
A "change in control" shall be deemed to have occurred if and when any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
and Exchange Act of 1934) is or becomes a beneficial owner, directly or
indirectly, of securities of the Employer or its parent company representing
greater than fifty percent (50%) of the combined voting power of the Employer's
or its parent company's then outstanding securities. Notwithstanding the
foregoing, no "change in control" shall be deemed to have occurred by virtue of
any transaction which results in the Employee and/or a member or members of the
Employer's present Board of Directors (i.e. existing on March 1, 1996), or a
group of persons including the Employee and/or a member or members of the
Employer's present Board of Directors, acquiring, directly or indirectly, more
than fifty percent (50%) of the combined voting power of the Employer's or its
parent company's outstanding securities. In limitation of the provisions in the
preceding sentence, a "change in control" shall be deemed to have occurred if
the member or members of the Employer's present Board of Directors do not own,
control or constitute a material portion of the acquiring "person". "Material"
shall mean ownership or control of at least twenty percent (20%) of the
acquiring person.
Any dispute or controversy arising under or in connection with this
Section 10 shall be settled exclusively by arbitration in the State of North
Carolina in accordance with the rules of the American Arbitration Association
then in effect.
Section 11. Enforcement of Employee Restrictions. Employee acknowledges
that he has carefully read and considered the provisions of this Agreement and,
having done so, agrees that the restrictions set forth in this Agreement in
Sections 7 and 8 (including, but not limited to, the period of restriction and
the geographical area of restriction set forth therein) are fair and reasonable
and are necessarily required for the protection of the interests of the Employer
and its affiliates. Employee further acknowledges that due to the nature of
Employer's business, more limited restrictions than those found herein would not
be reasonable or appropriate. The Employee covenants and agrees with Employer
that the Employer shall be entitled to an accounting and repayment of all
profits, compensation, commissions, remunerations or benefits which the Employee
directly or indirectly has realized and/or may realize as a result, growing out
of or in connection with any such violations; such remedy to be in addition to
and not in limitation of any injunctive relief or other rights or remedies to
which Employer or its affiliates is or may be entitled to at law or in equity.
In the event that notwithstanding the foregoing, any part of the covenants set
forth in this Agreement shall be held to be invalid or unenforceable, the
remaining parts hereof shall nevertheless continue to be valid and enforceable
as though the invalid and unenforceable part had not been included herein. In
the event that any provisions of this Agreement relating to the time period or
geographical restriction shall be declared by a court of competent jurisdiction
to exceed the maximum time periods or geographical areas which such court deems
reasonable or enforceable, such time periods or geographical areas of
restriction shall be deemed to become and thereafter be the maximum time period
or geographical areas which such court deems reasonable and enforceable.
Section 12. Notices. All notices required or permitted hereunder shall
be deemed to be duly given if in writing and delivered personally or sent by
United States registered or certified mail, postage pre-paid, addressed to
Employer at:
x/x Xxxx X. Xxxxx, Xx.
Xxxxxxxx, Xxxxxxxx Xxxx xx Xxxxx Xxxxxxxx
00 XxXxxxxxx Xxxx., X.X.
Xxxxxxx, X.X. 00000
and addressed to Employee at:
Xxxxxx X. Xxxxx
0000 Xxxxxxxxx Xx.
Xxxxxxx, Xxxxx Xxxxxxxx 00000
or at such changed addresses as the parties may designate in writing.
Section 13. Miscellaneous.
(a). Headings. Headings, titles and captions contained in
this Employment Agreement are inserted only as a matter of convenience
and reference and in no way define, limit, extend, or describe the
scope of this Agreement or the intent of any provisions hereof.
(b). Gender. The use in this Agreement of gender-specific
words or phrases shall be deemed to include the masculine, feminine or
neuter genders, as the context may require.
(c). Entire Agreement. This writing constitutes the entire
agreement between the parties hereto and supersedes any prior
understanding or agreements among them respecting the subject matter.
There are no extraneous representations, arrangements, understandings,
or agreements, oral or written, in respect of the subject matter of
this Agreement, among the parties hereto, except those fully expressed
herein.
(d). Amendments. No amendments, changes, alterations, modi-
fications, additions and qualifications of the terms of this Agreement
shall be made or binding unless made in writing and signed by all the
parties hereto.
(e). Waiver. The failure of either party to enforce at any
time any of the provisions of this Agreement shall not be construed
as a waiver of such provisions or of the right of such party thereafter
to enforce any such provisions.
(f). Invalidity and Severability. The invalidity or
unenforceability of any particular provision of this Agreement shall
not affect the enforceability of other provisions hereof, and this
Agreement shall be constructed in all respects as if such invalid or
unenforceable provisions were omitted.
(g). Governing Law. This Agreement shall be construed and
governed in accordance with the laws of the State of North Carolina.
Employer hereby consents to the jurisdiction of any local, state or
federal court located in the State of North Carolina, and hereby waives
personal service of process and consents to service of process by
certified or registered mail directed to Employee at Employee's address
stated in Section 11 of this Agreement. Employee further specifically
consents to venue in Lincoln County.
(h). Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their heirs,
successors and assigns. IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date and year first above written.
EMPLOYER:
Cabarrus Bank of North Carolina
By: \S\Xxxx X. Xxxxx, Xx.
----------------------------
Xxxx X. Xxxxx, Xx.
Title: Chairman
----------------------------
EMPLOYEE:
\S\ Xxxxxx X. Xxxxx
----------------------- (SEAL)
Xxxxxx X. Xxxxx
