Exhibit 10.1
(XXXXX X. XXXXXXX)
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 10, 2004 is made
among First National Bancshares, Inc., a South Carolina corporation (the
“Company”), its wholly owned subsidiary, First National Bank of the South, a
national bank (the “Bank”), and Xxxxx X. Xxxxxxx, an individual resident of
South Carolina (the “Executive”). The Company and the Bank are referred to
collectively as the “Employer.”
The
Employer recognizes the Executive’s contribution to the growth and success of the
Bank during its organization and initial years of operations. The Employer desires to
provide for the continued employment of the Executive in a manner which will reinforce and
encourage the dedication of the Executive to the Employer and promote the best interests
of the Employer and its shareholders. The Executive is willing to continue to serve the
Employer on the terms and conditions herein provided. Certain terms used in this Agreement
are defined in Section 17 hereof.
In
consideration of the foregoing, the mutual covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1.
Employment. The Employer shall employ the Executive, and the Executive
shall serve the Employer, as President and Chief Executive Officer of the Bank
and the Company upon the terms and conditions set forth herein. The Executive
shall also serve on the Board of Directors of the Company and the Bank. The
Executive shall have such authority and responsibilities consistent with his
position as are set forth in the Company’s or the Bank’s Bylaws or
assigned by the Company’s or the Bank’s Board of Directors (the
“Board”) from time to time. The Executive shall devote his full
business time, attention, skill and efforts to the performance of his duties
hereunder, except during periods of illness or periods of vacation and leaves of
absence consistent with Bank policy. The Executive may devote reasonable periods
to service as a director or advisor to other organizations, to charitable and
community activities, and to managing his personal investments, provided
that such activities do not materially interfere with the performance of his
duties hereunder and are not in conflict or competitive with, or adverse to, the
interests of the Company or the Bank.
2.
Term. Unless earlier terminated as provided herein, the Executive’s
employment under this Agreement shall commence on the date hereof and be for a
term (the “Term”) of three years. At the end of each year of the Term,
the Term shall be extended for an additional year so that the remaining term
shall continue to be three years; provided that the Executive or the
Employer may at any time, by written notice, fix the Term to a finite term of
three years commencing with the year of the notice. Notwithstanding the
foregoing, the Term of employment hereunder will end on the date that the
Executive attains the retirement age, if any, specified in the Bylaws of the
Bank for directors of the Bank.
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3.
Compensation and Benefits.
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(a)
Executive’s base salary is $160,000, plus his medical insurance premium.
The Board (or an appropriate committee of the Board) shall review the
Executive’s salary at least annually and may increase, but cannot decrease,
the Executive’s salary if it determines in its sole discretion that an
increase is appropriate. The salary shall be payable in accordance with the
Employer’s normal payroll practices. |
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(b)
The Executive will be eligible to receive an annual cash bonus of up to 50% of
his base salary based on the accomplishment of performance goals established in
advance each year by the Board of Directors. |
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(c)
The Executive shall participate in the Employer ‘s long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock, and other awards thereunder or under any similar plan adopted by the
Employer. Nothing herein shall be deemed to preclude the granting to the
Executive of warrants or options under a director option plan in addition to the
options granted hereunder. |
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(d)
The Executive shall participate in all retirement, welfare and other benefit
plans or programs of the Employer now or hereafter applicable generally to
employees of the Employer or to a class of employees that includes senior
executives of the Employer. |
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(e)
The Employer shall provide the Executive with a term life insurance policy
providing for death benefits totaling $500,000 payable to the Executive’s
spouse and heirs (and may provide for additional death benefits of up to
$500,000 payable to the Employer), and the Executive shall cooperate with the
Employer in the securing and maintenance of such policy. The Employer shall also
pay for an accident liability policy on the Executive totaling $1,000,000 to
protect the Employer from damages or lawsuits resulting from injuries to third
parties caused by the Executive. In addition, the Employer shall provide a
separate disability policy for the Executive with terms acceptable to the Board
and the Executive. The Employer shall require and pay the cost of an annual
physical for the Executive. |
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(f)
The Employer shall provide Executive with either an automobile owned or leased
by the Employer of a make and model appropriate to the Executive’s status,
or a monthly automobile allowance. The Employer shall provide for reasonable
expenses associated with the automobile, including, but not limited to
insurance, taxes, etc. |
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(g)
The Employer shall pay Executive’s membership dues pertaining to an area
country club and The Piedmont Club for so long as the Executive remains the
President and Chief Executive Officer of the Company or the Bank and this
Agreement remains in force. |
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(h)
The Employer shall reimburse the Executive for reasonable travel and other
business development expenses related to the Executive’s duties which are
incurred and accounted for in accordance with the normal practices of the
Employer. |
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4.
Termination.
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(a)
The Executive’s employment under this Agreement may be terminated prior to
the end of the Term only as provided in this Section 4. |
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(b)
The Agreement will be terminated upon the death of the Executive. In this event,
the Executive’s estate shall receive any sums due him as base salary and/or
reimbursement of expenses through the end of the month during which death
occurred, plus any bonus earned or accrued through the date of death (including
any amounts awarded for previous years but which were not yet vested). The
payment for the bonus will be made to the Executive’s estate following the
end of the year at the time that it would have been paid to the Executive, and
to the extent that the bonus is performance-based, the amount of the bonus will
be calculated by taking into account the performance of the Company for the
entire year and prorated through the date of death. |
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(c)
The Employer may terminate this Agreement upon the disability of the Executive
for a period of 180 days which, in the opinion of the Board of Directors,
renders him unable to perform the essential functions of his job and for which
reasonable accommodation is unavailable. For purposes of this Agreement, a
“disability” is defined as a physical or mental impairment that
substantially limits one or more major life activities, and a “reasonable
accommodation” is one that does not impose an undue hardship on the
Employer. During the period of any incapacity leading up to the termination of
the Executive’s employment under this provision, the Employer shall
continue to pay the Executive his full base salary at the rate then in effect
and all perquisites and other benefits (other than any bonus) until the
Executive becomes eligible for benefits under any long-term disability plan or
insurance program maintained by the Employer, provided that the amount of any
such payments to the Executive shall be reduced by the sum of the amounts, if
any, payable to the Executive for the same period under any other disability
benefit or pension plan covering the Executive. Furthermore, the Executive shall
receive any bonus earned or accrued through the date of incapacity (including
any amounts awarded for previous years but which were not yet vested). Nothing
herein shall prohibit the Employer from hiring an acting president or chief
executive officer prior to the expiration of this 180-day period. |
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(d)
The Employer may terminate this Agreement for Cause upon delivery of a Notice of
Termination to the Executive. If the Executive’s employment is terminated
for Cause under this provision, the Executive shall receive only any sums due
him as base salary and/or reimbursement of expenses through the date of such
termination. |
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(e)
The Employer may terminate this Agreement without Cause upon delivery of a
Notice of Termination to the Executive. If the Executive’s employment is
terminated without Cause under this provision, the Employer shall pay to the
Executive severance compensation in an amount equal to 100% of his then current
monthly base salary each month for 24 months from the date of termination, plus
any bonus earned or accrued through the date of termination (including any
amounts awarded for previous years but which were not yet vested). In addition,
for a period of 24 months following termination, the Employer shall at its
expense continue on behalf of the Executive and his dependents and beneficiaries
the life insurance, disability, medical, dental, and hospitalization benefits
provided (x) to the Executive at any time during the 90-day period prior to
the termination hereunder or (y) to other similarly situated executives who
continue in the employ of the Employer. Such coverage and benefits (including
deductibles and costs) shall be no less favorable to the Executive and
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his dependents and beneficiaries than the most favorable of such coverages and
benefits referred to above. The Employer’s obligation hereunder with
respect to the foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent employer’s
benefit plans, in which case the Employer may reduce the coverage of any
benefits it is required to provide the Executive hereunder as long as the
aggregate coverages and benefits of the combined benefit plans is no less
favorable to the Executive than the coverages and benefits required to be
provided hereunder. This provision shall not be interpreted so as to limit any
benefits to which the Executive or his dependents or beneficiaries may be
entitled under any of the Employer’s employee benefit plans, programs, or
practices following the Executive’s termination of employment, including,
without limitation, retiree medical and life insurance benefits. |
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(f)
The Executive may terminate this Agreement at any time by delivering a Notice of
Termination at least 30 days prior to the Executive’s date of resignation.
If the Executive resigns under this provision, the Executive shall receive any
sums due him as base salary and/or reimbursement of expenses through the date of
such termination. |
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(g) The Executive may terminate this Agreement for Good Reason upon delivery of a
Notice of Termination to the Employer within a 90-day period beginning on the
30th day after the occurrence of a Change in Control or within a 90-day period
beginning on the one year anniversary of the occurrence of a Change in Control.
If the Executive’s employment is terminated by the Executive pursuant to
this provision, in addition to other rights and remedies available in law or
equity, the Executive shall be entitled to the following: |
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(i)
the Employer shall pay the Executive in cash within fifteen days of the date of
termination severance compensation in an amount equal to his then current
monthly base salary multiplied by 36, plus any bonus earned or accrued through
the date of termination (including any amounts awarded for previous years but
which were not yet vested); |
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(ii)
for a period of 36 months, the Employer shall at its expense continue on behalf
of the Executive and his dependents and beneficiaries the life insurance,
disability, medical, dental, and hospitalization benefits provided (x) to
the Executive at any time during the 90-day period prior to the Change in
Control or at any time thereafter or (y) to other similarly situated
executives who continue in the employ of the Employer. Such coverage and
benefits (including deductibles and costs) shall be no less favorable to the
Executive and his dependents and beneficiaries than the most favorable of such
coverages and benefits referred to above. The Employer’s obligation
hereunder with respect to the foregoing benefits shall be limited to the extent
that the Executive obtains any such benefits pursuant to a subsequent
employer’s benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive hereunder as
long as the aggregate coverages and benefits of the combined benefit plans is no
less favorable to the Executive than the coverages and benefits required to be
provided hereunder. This subsection (ii) shall not be interpreted so as to limit
any benefits to which the Executive or his dependents or beneficiaries may be
entitled under any of the Employer’s employee benefit plans, programs, or
practices following the Executive’s termination of employment, including,
without limitation, retiree medical and life insurance benefits; and |
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(iii)
the restrictions on any outstanding incentive awards (including restricted
stock) granted to the Executive under the Company’s or the Bank’s
long-term equity incentive program or any other incentive plan or arrangement
shall lapse and such awards shall become 100% vested, all stock options and
stock appreciation rights granted to the Executive shall become immediately
exercisable and shall become 100% vested, all performance units granted to the
Executive shall become 100% vested, and the restrictive covenants contained in
Section 9 shall not apply to the Executive. |
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(h)
With the exceptions of the provisions of this Section 4, and the express terms
of any benefit plan under which the Executive is a participant, it is agreed
that, upon termination of the Executive’s employment, the Employer shall
have no obligation to the Executive for, and the Executive waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits). Unless otherwise stated in this Section 4, the effect of termination
on any outstanding incentive awards, stock options, stock appreciation rights,
performance units, or other incentives shall be governed by the terms of the
applicable benefit or incentive plan and/or the agreements governing such
incentives. At the time of termination of employment, the Employer and the
Executive shall enter into a mutually satisfactory form of release acknowledging
such remaining obligations and discharging both parties, as well as the
Employer’s officers, directors and employees with respect to their actions
for or on behalf of the Employer, from any other claims or obligations arising
out of or in connection with the Executive’s employment by the Employer,
including the circumstances of such termination. |
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(i)
In the event that the Executive’s employment is terminated for any reason,
the Executive shall tender his resignation as a director of the Company and the
Bank and effective as of the date of termination. |
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(j)
In the event that the Executive’s employment is terminated for any reason
prior to a Change in Control, the Employer shall have the right of first refusal
during the twelve-month period following the date of termination to repurchase
any or all shares of common stock then held by the Executive. The Employer may
assign this right to one or more other persons. Executive agrees not to sell or
convey his shares or any portion thereof without notice to Employer of
Executive’s intention to do so. To that end, Executive shall not sell or
convey said shares except by binding written agreement, which agreement shall be
expressly subject to Employer’s rights under this option of first refusal.
Executive shall notify Employer in writing of such proposed conveyance or sale
and shall furnish Employer with a true and correct copy of the aforesaid written
agreement. Thereafter, Employer shall have the option for a period of fifteen
(15) days from the date of receipt of such notice and copy, during which
Employer may determine and notify Executive whether Employer desires to purchase
the shares for the same price and on the same terms as set forth in said written
agreement. If Employer exercises the option granted herein, Executive shall
transfer to Employer said shares in accordance with the terms of said written
agreement and upon such delivery, Employer shall pay to Executive the purchase
money called for in the written agreement. If Employer fails to exercise the
option to purchase, Executive shall be at liberty to conclude the sale or
conveyance of said shares only at the exact price and terms submitted to
Employer. |
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Any failure to consummate the sale on the exact terms and conditions
within a reasonable time after Employer’s notification of its intent not to
exercise its rights hereunder shall cause the provisions of this option of first
refusal to remain in full force and effect and fully applicable to any
subsequent conveyances or sales. |
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(k)
The parties intend that the severance payments and other compensation provided
for herein are reasonable compensation for the Executive’s services to the
Employer and shall not constitute “excess parachute payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder. In the event that the Employer’s independent
accountants acting as auditors for the Employer on the date of a Change in
Control determine that the payments provided for herein constitute “excess
parachute payments,” then the compensation payable hereunder shall be
reduced to an amount the value of which is $1.00 less than the maximum amount
that could be paid to the Executive without the compensation being treated as
“excess parachute payments” under Section 280G. The allocations of the
reduction required hereby among the termination benefits payable to the
Executive shall be determined by the Executive. |
5.
Ownership of Work Product. The Employer shall own all Work Product
arising during the course of the Executive’s employment (prior, present or
future). For purposes hereof, “Work Product” shall mean all
intellectual property rights, including all Trade Secrets, U.S. and
international copyrights, patentable inventions, and other intellectual property
rights in any programming, documentation, technology or other work product that
relates to the Employer, its business or its customers and that Executive
conceives, develops, or delivers to the Employer at any time during his
employment, during or outside normal working hours, in or away from the
facilities of the Employer, and whether or not requested by the Employer. If the
Work Product contains any materials, programming or intellectual property rights
that the Executive conceived or developed prior to, and independent of, the
Executive’s work for the Employer, the Executive agrees to point out the
pre-existing items to the Employer and the Executive grants the Employer a
worldwide, unrestricted, royalty-free right, including the right to sublicense
such items. The Executive agrees to take such actions and execute such further
acknowledgments and assignments as the Employer may reasonably request to give
effect to this provision.
6.
Protection of Trade Secrets. The Executive agrees to maintain in strict
confidence and, except as necessary to perform his duties for the Employer, the
Executive agrees not to use or disclose any Trade Secrets of the Employer during
or after his employment. “Trade Secret” means information, including a
formula, pattern, compilation, program, device, method, technique, process,
drawing, cost data or customer list, that: (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
7.
Protection of Other Confidential Information. In addition, the Executive
agrees to maintain in strict confidence and, except as necessary to perform his
duties for the Employer, not to use or disclose any Confidential Business
Information of the Employer during his employment and for a period of 36 months
following termination of the Executive’s employment.
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“Confidential
Business Information” shall mean any internal, non-public information
(other than Trade Secrets already addressed above) concerning the
Employer’s financial position and results of operations (including
revenues, assets, net income, etc.); annual and long-range business plans;
product or service plans; marketing plans and methods; training, educational and
administrative manuals; customer and supplier information and purchase
histories; and employee lists. The provisions of Sections 6 and 7 above shall
also apply to protect Trade Secrets and Confidential Business Information of
third parties provided to the Employer under an obligation of secrecy.
8.
Return of Materials. The Executive shall surrender to the Employer,
promptly upon its request and in any event upon termination of the
Executive’s employment, all media, documents, notebooks, computer programs,
handbooks, data files, models, samples, price lists, drawings, customer lists,
prospect data, or other material of any nature whatsoever (in tangible or
electronic form) in the Executive’s possession or control, including all
copies thereof, relating to the Employer, its business, or its customers. Upon
the request of the Employer, Executive shall certify in writing compliance with
the foregoing requirement.
9.
Restrictive Covenants.
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(a)
No Solicitation of Customers. During the Executive’s employment with
the Employer, and for a period of 12 months thereafter, or during any period the
Employer is paying Executive severance under Section 4 if longer than 12 months,
the Executive shall not (except on behalf of or with the prior written consent
of the Employer), either directly or indirectly, on the Executive’s own
behalf or in the service or on behalf of others, (A) solicit, divert, or
appropriate to or for a Competing Business, or (B) attempt to solicit, divert,
or appropriate to or for a Competing Business, any person or entity that is or
was a customer of the Employer or any of its Affiliates on the date of
termination and is located in the Territory and with whom the Executive has had
material contact. |
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(b)
No Recruitment of Personnel. During the Executive’s employment with
the Employer, and for a period of 12 months thereafter, or during any period the
Employer is paying Executive severance under Section 4 if longer than 12 months,
the Executive shall not, either directly or indirectly, on the Executive’s
own behalf or in the service or on behalf of others, (A) solicit, divert, or
hire away, or (B) attempt to solicit, divert, or hire away, to any Competing
Business located in the Territory, any employee of or consultant to the Employer
or any of its Affiliates engaged or experienced in the Business, regardless of
whether the employee or consultant is full-time or temporary, the employment or
engagement is pursuant to written agreement, or the employment is for a
determined period or is at will. |
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(c)
Non-Competition Agreement. During the Executive’s employment with
the Employer, and for a period of 12 months thereafter, or during any period the
Employer is paying Executive severance under section 4 if longer than 12 months,
the Executive shall not (without the prior written consent of the Employer)
compete with the Employer or any of its Affiliates by, directly or indirectly,
forming, serving as an organizer, director or officer of, or consultant to, or
acquiring or maintaining more than a 1% passive investment in, a depository
financial institution or holding company therefor if such depository institution
or holding company has one or more offices or branches located in the Territory.
Notwithstanding the |
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foregoing, the Executive may serve as an officer of or
consultant to a depository institution or holding company therefor even though
such institution operates one or more offices or branches in the Territory, if
the Executive’s employment does not directly involve, in whole or in part,
the depository financial institution’s or holding company’s operations
in the Territory. |
10.
Independent Provisions. The provisions in each of the above Sections
9(a), 9(b), and 9(c) are independent, and the unenforceability of any one
provision shall not affect the enforceability of any other provision.
11.
Successors; Binding Agreement. The rights and obligations of this
Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Employer is a party, or any assignee of
all or substantially all of the Employer’s business and properties. The
Executive’s rights and obligations under this Agreement may not be assigned
by him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
12.
Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided,
however, that all notices to the Employer shall be directed to the
attention of the Employer with a copy to the Secretary of the Employer. All
notices and communications shall be deemed to have been received on the date of
delivery thereof.
13.
Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of South Carolina without
giving effect to the conflict of laws principles thereof. Any action brought by
any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in State of South Carolina.
14.
Non-Waiver. Failure of the Employer to enforce any of the provisions of
this Agreement or any rights with respect thereto shall in no way be considered
to be a waiver of such provisions or rights, or in any way affect the validity
of this Agreement.
15.
Enforcement. The Executive agrees that in the event of any breach or
threatened breach by the Executive of any covenant contained in Section 9(a),
9(b), or 9(c) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
would certainly result. Accordingly, an award of legal damages, if without other
relief, would be inadequate to protect the Employer. The Executive, therefore,
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or anticipated breach of any such covenant, and to obtain any other
available legal, equitable, statutory, or contractual relief. Should the
Employer have cause to seek such relief, no bond shall be required from the
Employer, and the Executive shall pay all attorney’s fees and court costs
which the Employer may incur to the extent the Employer prevails in its
enforcement action.
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16.
Saving Clause. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision or
clause of this Agreement, or portion thereof, shall be held by any court or
other tribunal of competent jurisdiction to be illegal, void, or unenforceable
in such jurisdiction, the remainder of such provision shall not be thereby
affected and shall be given full effect, without regard to the invalid portion.
It is the intention of the parties that, if any court construes any provision or
clause of this Agreement, or any portion thereof, to be illegal, void, or
unenforceable because of the duration of such provision or the area or matter
covered thereby, such court shall reduce the duration, area, or matter of such
provision, and, in its reduced form, such provision shall then be enforceable
and shall be enforced. The Executive and the Employer hereby agree that they
will negotiate in good faith to amend this Agreement from time to time to modify
the terms of Sections 9(a), 9(b), and 9(c), the definition of the term
“Territory,” and the definition of the term “Business,” to
reflect changes in the Employer’s business and affairs so that the scope of
the limitations placed on the Executive’s activities by Section 9
accomplishes the parties’ intent in relation to the then current facts and
circumstances. Any such amendment shall be effective only when completed in
writing and signed by the Executive and the Employer.
17.
Certain Definitions.
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(a)
“Affiliate” shall mean any business entity controlled by,
controlling or under common control with the Employer. |
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(b)
“Business” shall mean the operation of a depository financial
institution, including, without limitation, the solicitation and acceptance of
deposits of money and commercial paper, the solicitation and funding of loans
and the provision of other banking services, and any other related business
engaged in by the Employer or any of its Affiliates as of the date of
termination. |
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(c)
“Cause” shall consist of any of (A) the commission by the
Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the material breach by the Executive of this
Agreement that, if susceptible of cure, remains uncured ten days following
written notice to the Executive of such breach, (D) the receipt of any form
of notice, written or otherwise, that any regulatory agency having jurisdiction
over the Employer intends to institute any form of formal or informal
(e.g., a memorandum of understanding which relates to the
Executive’s performance) regulatory action against the Executive or the
Employer or the Employer (provided that the Board of Directors determines
in good faith, with the Executive abstaining from participating in the
consideration of and vote on the matter, that the subject matter of such action
involves acts or omissions by or under the supervision of the Executive or that
termination of the Executive would materially advance the Employer’s
compliance with the purpose of the action or would materially assist the
Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action, and |
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provided further that, if
the matters relating to the Executive’s performance are susceptible of
cure, such matters remain uncured to the satisfaction of the regulatory agency
30 days following receipt of the notice from the regulatory agency); (E) the
exhibition by the Executive of a standard of behavior within the scope of his
employment that is materially disruptive to the orderly conduct of the
Employer’s business operations (including, without limitation, substance
abuse or sexual misconduct) to a level which, in the Board of Directors’
good faith and reasonable judgment, with the Executive abstaining from
participating in the consideration of and vote on the matter, is materially
detrimental to the Employer’s best interest, that, if susceptible of cure
remains uncured ten days following written notice to the Executive of such
specific inappropriate behavior; or (F) the failure of the Executive to devote
his full business time and attention to his employment as provided under this
Agreement that, if susceptible of cure, remains uncured 30 days following
written notice to the Executive of such failure. |
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(d) “Change in Control” shall mean the occurrence during the Term
of any of the following events, unless such event is a result of a Non-Control
Transaction: |
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(i)
The individuals who, as of the date of this Agreement, are members of the Board
of Directors of the Employer (the “Incumbent Board”) cease for any
reason to constitute at least fifty percent of the Board of Directors of the
Employer; provided, however, that if the election, or nomination
for election by the Employer’s shareholders, of any new director was
approved in advance by a vote of at least fifty percent of the Incumbent Board,
such new director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board; provided, further, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened election contest or other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board of
Directors of the Employer, including by reason of any agreement intended to
avoid or settle any election contest or proxy contest. |
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(ii) An acquisition (other than directly from the Employer) of any voting securities
of the Employer (the “Voting Securities”) by any “Person”
(as the term “person” is used for purposes of Section 13(d) or 14(d)
of the Exchange Act) immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of the combined voting power of the Employer’s then
outstanding Voting Securities; provided, however, that in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a Non-Control Acquisition shall not constitute an acquisition
which would cause a Change in Control. |
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(iii)
Approval by the shareholders of the Employer of: (i) a merger, consolidation,
or reorganization involving the Employer; (ii) a complete liquidation or
dissolution of the Employer; or (iii) an agreement for the sale or other
disposition of all or substantially all of the assets of the Employer to any
Person (other than a transfer to a Subsidiary). |
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(iv)
A notice of an application is filed with the Office of Comptroller of the
Currency (the “OCC”) or the Federal Reserve Board or any other bank or
thrift regulatory approval (or notice of no disapproval) is granted by the
Federal Reserve, the OCC, the Federal Deposit Insurance Corporation, or any
other regulatory authority for permission to acquire control of the Employer or
any of its banking subsidiaries; provided that if the application is filed in
connection with a transaction which has been approved by the Board, then the
Change in Control shall not be deemed to occur until consummation of the
transaction. |
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(e) “
Competing Business” shall mean any business that, in whole or
in part, is the same or substantially the same as the Business. |
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(f) “
Good Reason” shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i) through
(viii) hereof: |
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(i)
a change in the Executive’s status, title, position or responsibilities
(including reporting responsibilities) which, in the Executive’s reasonable
judgment, represents an adverse change from his status, title, position or
responsibilities as in effect at any time within ninety days preceding the date
of a Change in Control or at any time thereafter; the assignment to the
Executive of any duties or responsibilities which, in the Executive’s
reasonable judgment, are inconsistent with his status, title, position or
responsibilities as in effect at any time within ninety days preceding the date
of a Change in Control or at any time thereafter; any removal of the Executive
from or failure to reappoint or reelect him to any of such offices or positions,
except in connection with the termination of his employment for Disability or
Cause, as a result of his death, or by the Executive other than for Good Reason,
or any other change in condition or circumstances that in the Executive’s
reasonable judgment makes it materially more difficult for the Executive to
carry out the duties and responsibilities of his office than existed at any time
within ninety days preceding the date of Change in Control or at any time
thereafter; |
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(ii)
a reduction in the Executive’s base salary or any failure to pay the
Executive any compensation or benefits to which he is entitled within five days
of the date due; |
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(iii)
the Employer’s requiring the Executive to be based at any place outside a
30-mile radius from the executive offices occupied by the Executive immediately
prior to the Change in Control, except for reasonably required travel on the
Employer’s business which is not materially greater than such travel
requirements prior to the Change in Control; |
|
(iv)
the failure by the Employer to (A) continue in effect (without reduction
in benefit level and/or reward opportunities) any material compensation or
employee benefit plan in which the Executive was participating at any |
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time within ninety days preceding the date of a Change in Control or at any timethereafter,
unless such plan is replaced with a plan that provides substantially
equivalent compensation or benefits to the Executive, or (B) provide the
Executive with compensation and benefits, in the aggregate, at least equal (in
terms of benefit levels and/or reward opportunities) to those provided for under
each other employee benefit plan, program and practice in which the Executive
was participating at any time within ninety days preceding the date of a Change
in Control or at any time thereafter; |
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(v)
the insolvency or the filing (by any party, including the Employer) of a
petition for bankruptcy of the Employer, which petition is not dismissed within
sixty days; |
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(vi)
any material breach by the Employer of any material provision of this Agreement; |
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(vii)
any purported termination of the Executive’s employment for Cause by the
Employer which does not comply with the terms of this Agreement; or |
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(viii)
the failure of the Employer to obtain an agreement, satisfactory to the
Executive, from any successor or assign to assume and agree to perform this
Agreement, as contemplated in Section 11 hereof. |
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Any event or condition described in clause (i) through (viii) above which occurs prior to a
Change in Control but which the Executive reasonably demonstrates (A) was at the
request of a third party, or (B) otherwise arose in connection with, or in
anticipation of, a Change in Control which actually occurs, shall constitute Good Reason
for purposes of this Agreement, notwithstanding that it occurred prior to the Change in
Control. The Executive’s right to terminate his employment for Good Reason shall not
be affected by his incapacity due to physical or mental illness. |
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(g) “Non-Control Transaction” shall mean a transaction described below: |
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(i)
the shareholders of the Employer, immediately before such merger, consolidation
or reorganization, own, directly or indirectly, immediately following such
merger, consolidation or reorganization, at least 50% of the combined voting
power of the outstanding voting securities of the corporation resulting from
such merger, consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger, consolidation or
reorganization; and |
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(ii)
immediately following such merger, consolidation or reorganization, the number
of directors on the board of directors of the Surviving Corporation who were
members of the Incumbent Board shall at least equal |
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the number of directors who were affiliated with or appointed by the other party to the merger,
consolidation or reorganization. |
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(h)
“Territory” shall mean a radius of 40 miles from (i) the main
office of the Employer or (ii) any branch or loan production office of the
Employer. |
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(i)
“Notice of Termination” shall mean a written notice of
termination from the Employer or the Executive which specifies an effective date
of termination, indicates the specific termination provision in this Agreement
relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. |
18.
Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto and supersedes all prior agreements, if any, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof.
19.
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN
WITNESS WHEREOF, the Employer has caused this Agreement to be executed and its seal to be
affixed hereunto by its officers thereunto duly authorized, and the Executive has signed
and sealed this Agreement, effective as of the date first above written.
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FIRST NATIONAL BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Title: Chairman |
|
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FIRST NATIONAL BANK OF THE SOUTH
By: /s/ Xxxxxx X. Xxxxxxx
Title: Chairman |
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EXECUTIVE
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx |
