Exhibit 10.12
THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
EMPLOYMENT AGREEMENT
This Agreement is entered into as of the 15th day of February, 2005 by
and between COMMUNITY BANKSHARES, INC. together with its subsidiaries (the
"Company"), and ___________________ (the "Employee").
RECITALS:
A. The Company wishes to employ Employee as an executive officer, and
to assure the Employee's continued employment with the Company, and the Employee
has agreed to accept such employment.
B. The Company 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 Company agrees to employ the Employee, and the
Employee agrees to accept employment and to serve the Company, on the terms and
conditions set forth herein.
2. Term of Employment. The employment of the Employee by the Company,
as provided under Section 1, shall commence on the date hereof and end on
February 15, 2008 (the "Term of Employment") unless further extended in writing
with express reference to this Agreement or sooner terminated as hereinafter
provided. Commencing on the third anniversary of the date of this Agreement, and
on each annual anniversary thereafter, the Term of Employment shall
automatically be extended for an additional year unless 90 days prior to the
anniversary the Company gives notice to the Employee that the Term of Employment
will not be extended. Except as otherwise provided expressly herein, the
provisions of this Agreement related to Employee's employment will not apply
after the Term of Employment has expired and any continuing employment of the
Employee thereafter will be at-will and not subject to the terms and conditions
of this Agreement.
3. Position and Duties. The Employee shall serve on a full-time basis
as ________________________________________ of the Company and shall have the
authority and be responsible for general oversight of the financial and
operational matters of the Company 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 Company. The Employee shall perform his
responsibilities and duties in the best interests of the Company.
4. Place of Performance. In connection with the Employee's employment
hereunder, the Employee shall be based initially at the Company's corporate
headquarters located in Orangeburg, South Carolina, subject to reasonable travel
or relocation as necessary to the carry out the business of the Company and his
duties hereunder.
5. Compensation and Benefits. In consideration of the Employee's
performance of his duties hereunder, the Company shall provide the Employee with
the following compensation and benefits during the term of his employment
hereunder.
a. Base Salary. During his first year of employment under this
Agreement, Employee shall receive at a minimum, a per annum base salary
of $_______. Such base salary shall be payable in equal installments in
arrears on the last day of the month or on such other payroll schedule
as is used by the Company for other employees. After the first year of
his employment, and during the term of the Employee's employment under
this Agreement, the Chief Executive Officer of the Company periodically
will review and may increase (but not decrease) the Employee's base
salary rate, all in accordance with the Company'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 Company 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 Company.
b. Bonus and Incentive Compensation. The Company shall pay to
the Employee with respect to each subsequent fiscal year during the
term of the Employee's employment hereunder, such cash bonus, if any,
as shall be determined pursuant to a bonus plan adopted by the Board of
Directors of the Company for key employees. 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
other incentive compensation plans that may be adopted by the Company,
which participation opportunity may be offered to the Employee in the
sole discretion of the Board of Directors of the Company.
c. Country Club and Civic Club Dues. The Company shall pay
reasonable dues on behalf of the Employee for one country club approved
by the Board of the entity of which the Employee is an officer and
shall pay reasonable dues for civic organizations to which the Employee
belongs for the benefit of the entity of which the Employee is an
officer and which have been approved by the Board of such entity.
d. Deferred Compensation. The Employee shall be entitled to
participate in the Company's 401(k) Plan and the Company shall match
100% of the first 3% of salary that the Employee defers each year.
e. Health and Dental Insurance. The Company will provide the
Employee with health and dental insurance coverage on the same basis as
such coverage is provided for other executive officers of the Company.
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f. Expenses. The Company 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
Company and mileage for out-of-town business use of his automobile,
provided that such expenses are incurred and accounted for in
accordance with the regular policies and procedures established by the
Company from time to time.
g. Vacations. The Employee shall be entitled to a minimum of
15 vacation days in each calendar year, as well as to all paid holidays
provided by the Company to its employees. The Employee will not be
entitled to any additional pay for unused vacation.
h. Other Benefits. The Employee shall be entitled to share in
any other employee benefits generally provided by the Company to its
most highly ranking executives for so long as the Company provides such
benefits. The Employee shall also be entitled to participate in all
other benefits accorded generally to Company employees.
6. Compensation and Benefits in the Event of Termination. In the event
of the termination of the Employee's employment by the Company 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 Company
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
Company, 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 Company, its subsidiaries
or their respective officers, directors,
shareholders, employees, or customers, monetarily or
otherwise;
(D) the Employee's conviction of a felony;
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(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 the commission of any
act or practice which resulted in the Employee's
becoming unbondable under the Company's "banker's
blanket bond;" or
(F) the suspension or removal of the
Employee, or the issuance of an order prohibiting the
Employee from associating with the Company or any of
its subsidiaries, by federal or state banking
regulatory authorities acting under lawful authority
pursuant to provisions of federal or state law or
regulation which may be in effect from time to time.
(ii) A "Change of Control" of the Company shall be
deemed to have been effected for purposes of this agreement if
either:
(A) voting control of CBI is acquired,
directly or indirectly, by any person or group acting
in concert,
(B) CBI is merged with or into any other
entity and CBI is not the surviving entity of the
merger,
(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 6.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 arbitration award or 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
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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 Company 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 Company to comply with
any material provision of this Agreement or the
material diminution or alteration of the Employee's
authority and duties hereunder, provided that the
Employee gives the Company written notice of such
failure and such failure is not cured within thirty
(30) days thereafter;
(B) Failure by the Company to obtain the
assumption of its obligations under this Agreement by
any successor;
(C) The failure by the Company to comply
with Section 5 of this Agreement; or
(D) Any purported termination of the
Employee's employment by action of the Company 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 Company's regular
retirement policy applicable to the position held by the
Employee at the time of such termination.
(viii) "Board of Directors" shall include any duly
authorized committee of the Board of Directors.
b. Termination Within Six Months After a Change of Control.
(i) If Employee terminates his employment with the
Company or is terminated by the Company with a Date of
Termination within six months following the effective date of
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a Change of Control, upon such termination Employee shall be
entitled to a lump sum payment equal to twice the Employee's
annual base salary amount in effect at the Date of
Termination. If, however, the amount of any such lump sum
payment, plus any other amount treated as a parachute payment
under Section 280G of the Internal Revenue Code, as amended,
(the "Code") equals or exceeds the base amount described in
such Section 280G, then the amount due hereunder shall be
adjusted to have a value of three times the base amount under
Section 280G less $100.
(ii) This paragraph 6.b. shall initially be effective
for a period of five years from the effective date of this
Agreement; provided, however, that commencing on the first
anniversary after the date of this Agreement, and on each
annual anniversary thereafter, the effectiveness of this
paragraph 6.b. shall automatically be extended for an
additional year, unless 30 days prior to the anniversary the
Company gives notice to the Employee that the effectiveness of
this paragraph 6.b. will not be extended.
(iii) Any amount paid under this paragraph 6.b. will
be deemed severance pay. Employee will not be under any duty
to mitigate damages and no income received by employee
thereafter shall reduce the amount due Employee hereunder.
(iv) If Employee should die after the occurrence of a
Change of Control and while any amount would still be payable
to Employee hereunder if Employee had continued to live but
not be in the employ of the Company, all such amounts, unless
otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to Employee's devisee or other
designee or, if there be no such devisee or designee, to
Employee's estate.
c. Termination by the Company For Cause and Termination by the
Employee For Other Than for Good Reason, or Disability, Death, or
Retirement. If the Employee's employment hereunder is terminated during
the Term of Employment by action of the Company for Cause; by action of
the Employee not for Good Reason; or by reason of the Employee's death,
Disability or Retirement and the provisions of paragraph 6.b above do
not apply, the following compensation and benefits shall be paid and
provided the Employee (or his beneficiary):
(i) 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;
(ii) 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;
(iii) 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
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arrangements in effect at the time of the Notice of
Termination under Section 5; and
(iv) Any amounts due the Employee with respect to
paragraphs i. and k. of Section 5 as of the Date of
Termination.
d. Termination by the Employee for Good Reason or Disability,
Death or Retirement and Termination by the Company for Other Than For
Cause. In the event the Employee's employment hereunder is terminated
during the Term of Employment other than by reason of the Employee's
death, Disability or Retirement, and by action of the Employee for Good
Reason, or by action of the Company other than for Cause, and the
provisions of paragraph 6.b. above do not apply, the Company shall pay
and provide the Employee the compensation and benefits stipulated under
paragraph 6.c. immediately above; provided, however, in addition
thereto and without setoff, the following compensation shall be paid
and provided the Employee:
(i) For the remaining Term of Employment under this
Agreement,
(A) the Company 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
(B) at its sole cost and expense, the
Company will continue to provide the Employee with
the insurance coverages he would have had had he
remained as an employee of the Company or with
insurance coverages substantially equivalent thereto,
or, at the Company'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 Company promptly will
reimburse Employee for premium costs actually
incurred by him from time to time for the same.
(ii) If termination pursuant to this paragraph 6.d.
shall occur during the last twelve months of the Term of
Employment, the Employee shall be entitled to receive the base
salary pursuant to Section 5.a. 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
paragraph, either alone or together with other payments which
the Employee has the right to receive from the Company, would
constitute a "parachute payment" (as defined in Section 280G
of the Code) then the amount due hereunder shall be adjusted
to have a value of three times the base amount under Section
280G less $100.
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7. Confidentiality.
a. The Employee recognizes that his activities on behalf of
the Company require considerable responsibility and trust. Relying on
the ethical responsibilities and undivided loyalty of the Employee, the
Company has and will and its subsidiaries have and 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
Company or its subsidiaries, and not generally known by the public. To
the extent consistent with the foregoing definition, Confidential
Information includes (without limitation): (i) the financial records,
marketing, profit and performance reports, pricing manuals, training
manuals, marketing and pricing procedures, financing methods of the
Company or its subsidiaries, and all other business records of the
Company or its subsidiaries; (ii) the identities of the customers of
the Company or its subsidiaries, their specific demands, and their
current and anticipated requirements for the products or services of
the Company or its subsidiaries; (iii) the business plans and internal
financial statements and projections of the Company or its
subsidiaries; and iv. the specifics of any specialized products or
services the Company or its subsidiaries may offer or provide to their
customers.
c. The Employee recognizes the proprietary and sensitive
nature of the Company's and its subsidiaries' Confidential Information.
The Employee agrees to abide by all of the Company's and its
subsidiaries rules and procedures designed to protect their
Confidential Information and to preserve and maintain all such
information in strict confidence during the Employee's employment by
the Company and as long thereafter as the Confidential Information
remains, in the sole opinion of the Company and its subsidiaries,
proprietary and confidential to the Company 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 Company or its subsidiaries.
8. Return of Materials. Upon the request of the Company, and in any
event, upon the termination of the Employee's employment, the Employee must
return to the Company or its subsidiaries and leave at the disposal of the
Company or its subsidiaries, all memoranda, notes, records, and other documents
pertaining to the business of the Company and its subsidiaries, or the
Employee's specific duties for such entities (including all copies of such
materials). The Employee must also return to the Company and its subsidiaries,
and leave at the disposal of the Company and its subsidiaries, all materials
involving any Confidential Information of the respective entities.
9. Implementation. 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 Company. Any claim the Employee may have
against the Company shall not constitute a defense to enforcement by the Company
of this Agreement. 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.
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10. Restrictive Covenant. In consideration of the Company's employment
of the Employee, the Employee agrees that, in addition to any other limitation,
prior to the end of the Term of Employment hereunder, the Date of Termination or
the completion of base salary payments pursuant to Section 6.d. above, whichever
is later, he will not, within a twenty-five (25) mile radius of the location of
his office with the Company, or any of its subsidiaries, manage, operate or be
employed by, participate in, or be connected in any manner with the management,
operation, or control of any business engaged in the businesses in which the
Company and any or its subsidiaries are engaged on the Date of Termination. 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, or the completion of base salary payments pursuant to
section 6.d. above, he will not solicit the business or patronage, directly or
indirectly, from any customers of the Company or any of its subsidiaries and the
Employee will not seek to or assist others to persuade any employee of the
Company engaged in similar work or related to the Company's work to discontinue
employment with the Company or seek employment or engage in any business of the
Company. 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 Company 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 the Date of Termination,
or completion of base salary payments pursuant to 6.d. above, whichever is
later.
11. Remedies for Breach of Employment Contract. Irreparable harm shall
be presumed if the Employee or the Company 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 parties are depending
upon absolute compliance. Damages would probably be very difficult to ascertain
if any nonmonetary covenant in this Agreement were breached. This Agreement is
intended to protect the proprietary rights of the Company and its subsidiaries
in many important ways. In light of these facts, the parties agree that any
court of competent jurisdiction should immediately enjoin any breach of this
Agreement, upon the request of the nonbreaching party, and the parties
specifically release the other party, 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 Company 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 the Company may
reasonably determine should be withheld pursuant to any applicable law or
regulation. In lieu of withholding such amounts, the Company 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
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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 Company: Community Bankshares, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Executive Officer
To the Employee: Xxxxxxx X. Xxxxxxxx
_________________
Xxxxxxxxxx, XX 00000
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 or other designee, or
if there be no such devisee or 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 Employee and an authorized
officer of the Company. No waiver by either party hereto at any time 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 not supersede or in any way limit the right,
duties or obligations that the Employee or the Company 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 Company, 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 without regard to the laws of such state governing conflicts of
laws.
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.
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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 Company 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 Company 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 person or persons entitled thereto under his will or,
in the case of intestacy applicable to his estate.
(d) Enforcement of Agreement; Attorneys' Fees. In the event
litigation or arbitration is commenced by the Employee against the
Company in seeking to obtain or enforce any right, benefit or payment
under this Agreement or to enforce any obligation of the Company
described herein, then, provided the Employee shall prevail in such
litigation or arbitration, the Company 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.
(e) Arbitration. Any controversy or claim arising out of or
relating to this Agreement shall be settled by binding arbitration
pursuant to the Federal Arbitration Act or the South Carolina Uniform
Arbitration Act, as applicable, under the applicable rules of the
American Arbitration Association and judgment on any award rendered by
the arbitrator(s) may be entered in any court having jurisdiction
thereof; provided that either party may seek injunctive relief to
enforce provisions of this Agreement without initiating an arbitration
proceeding. The location of any arbitration shall be Orangeburg, South
Carolina. Any civil action seeking injunctive relief, challenging an
arbitration proceeding or award or otherwise related to this Agreement
will be instituted and maintained in the federal or state courts for
Orangeburg County, South Carolina and the parties hereby consent to the
personal jurisdiction of said courts.
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(f) 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.
(g) Survival. The rights and remedies provided by Sections 7
through 18 of this Agreement shall survive the termination of
Employee's employment under this Agreement and the Term of Employment.
(h) Attribution of Payments. Any payment made to Employee by
or on behalf of any subsidiary of the Company shall be deemed to have
been made by the Company for purposes of this Agreement.
IN WITNESS WHEREOF, the Employee and the Company (by action of its duly
authorized officer) have executed this Agreement on the date first above
written.
[SIGNATURES OMITTED]
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