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EXHIBIT 10.4
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, made as of this 1st day of January ,
1996, by and between XXXXXX COUNTY BANCSHARES, INC. of Greeneville, Tennessee,
a bank holding company (the "Company"), and XXXXXXX X. XXXXX, XX. ("Xxxxx").
W I T N E S S E T H:
WHEREAS, the Company is a bank holding company controlling
substantially all of the issued and outstanding stock of Premier Bank of East
Tennessee, a Tennessee commercial bank (the "Bank");
WHEREAS, the Xxxxx is the former Chairman of the Board and director of
the Bank; and
WHEREAS, the parties intend that this Agreement shall provide Xxxxx
with an economic incentive not to compete with the Bank and the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Compensation for Noncompetition Agreement. Company agrees to
pay to Xxxxx subject to the terms and conditions set forth in this Agreement an
amount for his agreement not to engage in competition with the Company or the
Bank. Company shall pay to Xxxxx as Noncompetition Compensation an amount
equal to $30,000 payable in three equal installments of $10,000. The first
payment shall be made on January 1, 1996 and then annually thereafter until
paid in full.
2. Noncompetition. Xxxxx covenants and agrees that for a period
of five (5) years from the date of this Agreement he will not directly or
indirectly engage in competition with Company or Bank either as an individual
or as a partner, joint venturer, officer, director, stockholder, employee,
consultant or agent within the Company or Bank's "Primary Service Area" which
is defined as and includes the counties in Tennessee where the Company operates
a subsidiary bank engaged in the business of commercial banking. This covenant
of Xxxxx shall be construed as an agreement independent of any other provision
of this Agreement, and the existence of any claim or cause of action of Xxxxx
against Company or Bank based on this Agreement or otherwise shall not
constitute a defense to the enforcement by Company or Bank of this covenant.
Xxxxx further agrees that during such period he will not (either directly or
indirectly, such as a beneficiary of a trust) be the owner of more than a one
percent (1%) ownership interest of (i) the outstanding capital stock of any
corporation, or (ii) a member of any partnership, or (iii) an owner of any
other business, any of the aforesaid which engages in any type of business or
activity which is of the type
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engaged in by the Company or the Bank. Except as set forth herein, nothing
shall prohibit Xxxxx from obtaining employment with any business or activity
which is of the type engaged in by the Bank at the time of Xxxxx'x Termination
of employment in which Xxxxx does not have more than a one percent (1%)
ownership interest; provided Xxxxx'x employment does not involve Xxxxx'x
activities occurring within the Bank's Primary Service Area. In the event that
the provisions of the paragraph 2 should ever be deemed to exceed the time or
geographic limitations permitted by the applicable laws of the State, then such
provision shall be reformed to the maximum time limitations permitted by the
applicable laws of such State.
3. Forfeiture. In the event that Xxxxx shall violate his
covenant not to compete pursuant to paragraph 2 of this Agreement or shall
violate the terms of any confidential information, or invention disclosure or
assignment agreements entered into with Company, then this Agreement shall
immediately terminate and Xxxxx shall forfeit all rights under this Agreement
to Noncompetition Compensation and installments of Noncompetition Compensation
which have not yet been paid pursuant to paragraph 1. The assertion of any
such forfeiture by Company shall not preclude or waive its right to use any and
all other remedies. The right to assert a forfeiture is given in addition to
any other rights Company may have by law, statute, ordinance or otherwise.
4. Amendment and Termination. The Board of Directors of Company
may terminate this Agreement at any time in its sole and absolute discretion;
provided, however, no such termination shall, without the written agreement of
Xxxxx, terminate or reduce Xxxxx'x right to compensation pursuant to this
Agreement. No oral amendment of this Agreement shall be binding on the
parties. Except as above provided, this Agreement cannot be amended,
supplemented or modified except by an instrument in writing signed by the party
against whom enforcement of such amendment, supplement or modification is
sought.
5. No Term of Years. Nothing contained in this Agreement shall
be construed to be a contract of employment for any term of years, nor as
conferring upon Xxxxx the right to continue in the employment of Company in any
capacity, except as Company and Xxxxx may otherwise agree separate and apart
from this Agreement or as may be otherwise provided by law. Nothing contained
in this Agreement shall be deemed to exclude Xxxxx from any supplemental
compensation, bonus, pension, group term life insurance, health insurance,
other insurance, severance pay or other benefits to which he otherwise might be
or become entitled as an employee.
6. Unsecured Obligation. Company's obligations to Xxxxx under
this Agreement are general unsecured obligations of Company. Xxxxx shall not
have any interest in any fund or specific asset of Company by reason of this
Agreement. No trust fund shall be created in connection with this Agreement or
any amount of compensation that shall become payable hereunder, and all
payments to Xxxxx shall be made from the general assets of Company.
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7. Tax Withholding. Company shall have the right to deduct from
all cash payments to be made under this Agreement any federal, state or local
taxes required by law to be withheld with respect to such payments.
8. Remedies. The parties hereto acknowledge and agree that upon
the occurrence of a breach by Xxxxx of his covenant not to compete, the
remedies available at law to Company shall be inadequate, and Company shall be
entitled to specific performance of Xxxxx'x covenant not to compete. Nothing
herein shall be construed as prohibiting Company from pursuing any and all
other remedies available to it for any such breach of Xxxxx'x covenant not to
compete, including the enforcement of the forfeiture provisions in paragraph 3
and/or the recovery of monetary damages. In the event that it is necessary for
either party to employ legal counsel to enforce his or its rights under this
Agreement or to protect his or its interest herein, the party determined to be
in breach shall reimburse the damaged party for any and all reasonable legal
fees, expenses or court costs arising from such legal proceeding. The waiver
by either party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach. The rights and
remedies provided by this Agreement are cumulative and the use of any one
remedy by any party shall not preclude or waive his or its right to use any and
all remedies. Such rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance or otherwise.
9. Severability. Each provision of this Agreement is intended to
be severable and the invalidity, illegality or unenforceability of any portion
of this Agreement shall not affect the validity, legality or enforceability of
the remainder of this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision, there shall be automatically added as a part of
this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and still be legal, valid and
enforceable.
10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
11. Non-assignability. Xxxxx'x rights under this Agreement shall
not be transferable or subject to assignment during Xxxxx'x lifetime.
Furthermore, Xxxxx shall not have the right or power to anticipate, accelerate,
convey, assign or otherwise alienate, hypothecate, pledge or otherwise encumber
any of his rights under this Agreement, except as expressly provided in
paragraph 12.
12. Beneficiary. Xxxxx shall have the right to designate a
beneficiary to receive any amounts which become payable to Xxxxx under this
Agreement after the date of this death. Any such beneficiary designation shall
be made in the form of Exhibit "B" attached hereto, executed by Xxxxx and
delivered to Company prior to the date of Xxxxx'x death. Xxxxx shall have the
right at any time to revoke or change any such beneficiary designation by a
similar instrument delivered to Company.
13. Successors and Assigns. Subject to the foregoing limitations
on assignment by Xxxxx, this Agreement shall be binding upon and inure to the
benefit of the respective
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parties hereto and their executors, administrators, heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX COUNTY BANCSHARE, INC.
By: /s/ Xxxx Xxxxxxx
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Title: President
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X.X. XXXXX, XX.:
/s/ Xxxxxxx X. Xxxxx, Xx.
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