EXHIBIT (10)((ii)(f)
HILLSBOROUGH SAVINGS BANK, INC., SSB
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of December 1, 1997, by and between HILLSBOROUGH
SAVINGS BANK, INC., SSB (hereinafter referred to as the "SavingsBank") and
Xxxxxx X. Xxxxx (hereinafter referred to as the "Officer") and is joined in by
PIEDMONT BANCORP, INC., the parent holding company of theSavings Bank
(hereinafter referred to as the "Holding Company").
WHEREAS, the Savings Bank is a state-chartered stock savings bank and
the wholly-owned subsidiary of the Holding Company, and
WHEREAS, the Savings Bank desires to retain the services of the Officer
as Vice President and Chief Financial Officer of the Savings Bank upon the terms
and conditions set forth herein; and
WHEREAS, the services of the Officer, his experience and knowledge of
the affairs of the Savings Bank, and his reputation and contacts in the industry
and the local community are extremely valuable to the Savings Bank, and
WHEREAS, the Savings Bank wishes to attract and retain such
well-qualified executives and it is in the best interest of the Savings Bank and
of the Officer to secure the continued services of the Officer notwithstanding
any change in control of the Savings Bank or the Holding Company; and
WHEREAS, the Savings Bank considers the establishment and maintenance
of a sound and vital management to be part of its overall corporate strategy and
to be essential to protecting and enhancing the best interests of the Holding
Company, the Savings Bank and their stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to
set forth the terms and conditions of the Officer's employment relationship with
the Savings Bank.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants and conditions hereinafter set forth and other good and
valuable considerations, the receipt and sufficiency of which hereby are
acknowledged, the parties hereby do agree as follows:
1. Employment. The Savings Bank hereby agrees to employ the Officer and
the Officer hereby agrees to accept employment, upon the terms and conditions
stated herein, as Vice President and Chief Financial Officer of the Savings
Bank. The Officer shall render such administrative and management services to
the Savings Bank as are customarily performed by persons situated in a similar
executive capacity. The Officer shall promote the business of the Savings Bank
and perform such other duties as shall, from time to time, be reasonably
prescribed by the Board of Directors of the Savings Bank (the "Board").
2. Compensation. The Savings Bank shall pay the Officer during the term
of this agreement, as compensation for all service rendered by him to the
Savings Bank, a base salary at the rate of $59,000.00 per annum, payable in cash
not less frequently than monthly; provided that the rate of salary shall be
reviewed by the Board not less often than annually. Such rate of salary, or
increased rate of salary, as the case may be, may be further increased from time
to time in such amounts as the Board, in its discretion, may decide. In
determining salary increases, the Board shall compensate the Officer for
increases in the cost of living and may also provide for performance or merit
increases. Participation in incentive compensation, deferred compensation,
discretionary bonus, profit-sharing, retirement, stock option and other employee
benefit plans that the Savings Bank or the Holding Company have adopted or may
from time to time adopt, and participation in any fringe benefits, shall not
reduce that salary payable to the Officer under this Section. The Officer will
be entitled to such customary fringe benefits, vacation, sick leave as are
consistent with the normal practices and established policies of the Savings
Bank. In the event of a Change of Control (as defined in Section 10), the
Officer's rate of salary shall be increased not less than six percent (6%)
annually during the term of this Agreement.
3. Discretionary Bonuses. During the term of this Agreement, the
Officer shall be entitled in an equitable manner with all other key management
personnel of the Savings Bank, to such discretionary bonuses as may be
authorized, declared and paid by the Directors to the Savings Bank's key
management employees. No other compensation provided for in this Agreement shall
be deemed a substitute for the Officer's right to such discretionary bonuses
when and as declared by the Directors.
4. Participation in Retirement and Employee Benefit Plans: Fringe
Benefits. The Officer shall be entitled to participate in any plan relating to
deferred compensation, stock awards, stock options, stock purchases, pension,
thrift, profit sharing, group life insurance, medical and dental coverage,
disability coverage, education, or other retirement or employee benefits that
the Savings Bank or the Holding Company have adopted, or may, from time to time
adopt, for benefit of their executive employees and for employees generally,
subject to the eligibility rules of such plans. The Officer shall also be
entitled to participate in any other fringe benefits which are now or may be or
become applicable to the Officer or the Savings Bank's other executive
employees, including the payment of reasonable expenses for attending annual and
periodic meetings of trade associations, and any other benefits which are
commensurate with the duties and responsibilities to be performed by the Officer
under this Agreement. Additionally, the Officer shall be entitled to such
vacation and sick leave as shall be established under uniform employee policies
promulgated by the Directors. The Savings Bank shall reimburse the Officer for
all out-of-pocket reasonable and necessary business expenses which the Officer
may incur in connection with his services on behalf of the Savings Bank.
5. Term. The initial term of employment under this Agreement shall be
for the period commencing upon the effective date of this Agreement and ending
three (3 ) calendar years from the effective date of this Agreement. On each
anniversary of the effective date of this Agreement of the Savings Bank, the
term of this Agreement shall automatically be extended for an additional one
year period beyond the then effective expiration date unless written notice from
the Savings Bank or the Officer is received 90 days prior to an anniversary date
advising the other party that this Agreement shall not be further extended;
provided that the Directors shall review the Officer's performance annually and
make a specific determination pursuant to such review to renew this Agreement
prior to the 90 day notice period.
6. Loyalty. The Officer shall devote his full efforts and entire
business time to the performance of his duties and responsibilities under this
Agreement. The Officer agrees that he will hold in confidence all knowledge or
information of a confidential nature with respect to the respective businesses
of the Holding Company, the Savings Bank or of their subsidiaries, if any,
received by him during the term of this Agreement and will not disclose or make
use of such information, except in the ordinary course of his duties under this
Agreement, without the prior written consent of the Holding Company or the
Savings Bank.
7. Standards. The Officer shall perform his duties and responsibilities
under this Agreement in accordance with such reasonable standards expected of
employees with comparable positions in comparable organizations and as may be
established from time to time by the Board. The Savings Bank will provide the
Officer with the working facilities and staff customary for similar executives
and necessary for him to perform his duties.
8. Termination and Termination Pay. (a) The Officer's employment under
this Agreement shall be terminated upon the death of the Officer during the term
of this Agreement, in which event, the Officer's estate shall be entitled to
receive the compensation due the Officer through the last day of the calendar
month in which his death shall have occurred and for a period of one month
thereafter. (b) The Officer's employment under this Agreement may be terminated
at any time by the Officer upon sixty (60) days' written notice to the Board of
Directors. Upon such termination, the Officer shall be entitled to receive
compensation through the effective date of such termination. (c) The Board may
terminate the Officer's employment at any time, but any termination by the
Board, other than termination for cause, shall not prejudice the Officer's right
to compensation or other benefits under this Agreement for the remaining period
which would have been covered by this Agreement if such termination had not
occurred. The Officer shall have no right to receive compensation or other
benefits for any period after termination for "cause." Termination for "cause"
shall include termination because of the Officer's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provisions of this
Agreement.
9. Additional Regulatory Requirements. (a) If the Officer is suspended
and/or temporarily prohibited from participating in the conduct of the Savings
Bank's affairs by a notice served under Section 8(e)(3) or Section 8(g)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(l)), the Savings
Bank's obligations under this Agreement shall be suspended as of the date of
service, unless stayed by appropriate proceedings. If the charges in the notice
are dismissed, the Savings Bank shall (i) pay the Officer all of the
compensation withheld while its contract obligations were suspended and (ii)
reinstate (in whole or in part) any of its obligations which were suspended. (b)
If the Officer is removed and/or permanently prohibited from participating in
the conduct of the Savings Bank's affairs by an order issued under Section
8(e)(4) of Section 8(g)(l) of the Federal Deposit lnsurance Act
(12U.S.C.1818(e)(4) and (g)(1)), all obligations of the Savings Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected (c) If the Savings Bank
is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act
(12U.S.C. ss. 1818(x)(1)), all obligations under this Agreement shall terminate
as of the date of default, but this paragraph shall not affect any vested rights
of the contracting parties. (d) All obligations under this Agreement shall be
terminated, except to the extent determined that continuation of the Agreement
is necessary for the continued operation of the Savings Bank, (i) by the Federal
Deposit Insurance Corporation (the "Corporation"), at the time the Corporation
enters into an agreement to provide assistance to or on behalf of the Savings
Bank under the authority contained in Section 13(c) of the Federal Deposit
Insurance Act (12 U.S.C. ss. 1818(c)); or (ii) by the Administrator of the
Savings Institution Division of the North Carolina Department of Commerce (the
"Administrator"), at the time the Administrator approves a supervisory merger to
resolve problems related to operation of the Savings Bank or when the Savings
Bank is determined by the Administrator to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not be
affected by such action.
10. Change in Control.
(a) In the event of a "Change in Control" (as defined in Subsection (b)
below), the acquiror shall be prohibited, during the remainder of the term of
this Agreement, from:
(i) Assigning Officer any duties and/or responsibilities that are
inconsistent with his position, duties, responsibilities or
status at the time of the Change in Control or with his
reporting responsibilities or equivalent titles with the
Savings Bank in effect at such time; or
(ii) Adjusting Officer's annual base salary rate other than in
accordance with the provisions of Section 2 of this Agreement;
or
(iii) Reducing in level, scope or coverage or eliminating Officer's
life insurance, medical or hospitalization insurance,
disability insurance, profit sharing plans, stock option
plans, stock purchase plans, deferred compensation plans,
management retention plans, retirement plans or similar plans
or benefits being provided by the Savings Bank or the Holding
Company to the Officer as of the effective date of the Change
in Control; or
(iv) Transferring Officer to a location outside of Orange County,
North Carolina, without the Officer's express written consent.
(b) For the purposes of this Agreement, the term "Change in
Control" shall mean any of the following events:
(i) a change in control of a nature that would be required to be
reported in response to Item 1 of the Current Report on Form
8K, as in effect on the date hereof, pursuant to Section 13 or
1 5(d) of the Exchange Act; or
(ii) such time as any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Holding Company or Savings Bank representing 25 percent or
more of the combined voting power of the outstanding Common
Stock of the Holding Company or Common Stock of the Savings
Bank, as applicable; or
(iii) individuals who constitute the Board or board of directors of
the Holding Company on the date hereof (the "Incumbent Board"
and "Incumbent Holding Company Board," respectively) cease for
any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three
quarters of the directors comprising the Incumbent Board or
Incumbent Holding Company Board, as applicable, or whose
nomination for election by the Savings Bank's or Holding
Company's shareholders was approved by the Savings Bank's or
Holding Company's Board of Directors or Nominating Committee,
as applicable, shall be considered as though he or she were a
member of the Incumbent Board or Incumbent Holding Company
Board, as applicable; or
(iv) either the Holding Company or the Savings Bank consolidates or
merges with or into another corporation, association or entity
or is otherwise reorganized, where neither the Holding Company
nor the Savings Bank, respectively, is the surviving
corporation in such transaction; or
(v) all or substantially all of the assets of either the Holding
Company or the Savings Bank are sold or otherwise transferred
to or are acquired by any other entity or group.
Notwithstanding the other provisions of this Section 10, a transaction
or event shall not be considered a Change in Control if, prior to the
consummation or occurrence of such transaction or event, Officer and Savings
Bank agree in writing that the same shall not be treated as a Change in Control
for purposes of this Agreement.
(c) If, after the occurrence of a Change in Control, (i) the
employment of the Officer shall be terminated by the Savings
Bank or its successor for any reason other than for "cause" as
defined in Section 8(c) or (ii) the employment of the Officer
shall be terminated by the Officer as a result of a breach of
this Agreement by the Savings Bank or its successor, and as a
result of such termination, the Officer shall not become fully
vested in benefits provided to the Officer under any
retirement plan, restricted stock plan, stock option plan,
stock ownership plan, or other employee benefit plan, then in
addition to any liability arising under this Agreement, the
Savings Bank or its successor shall pay to the Officer an
amount equal to the value of the benefits in which the Officer
shall not become fully vested as a result of such termination.
(d) In the event any dispute shall arise between the Officer and
the Savings Bank as to the terms or interpretation of this
Agreement, including this Section 10, whether instituted by
formal legal proceedings or otherwise, including any action
taken by the Officer to enforce the terms of this Section 10
or in defending against any action taken by the Savings Bank,
the Savings Bank shall reimburse the Officer for all costs and
expenses incurred in such proceedings or actions, including
attorney's fees, in the event the Officer prevails in any such
action.
11. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Savings Bank which shall
acquire, directly or indirectly, by conversion, merger,
consolidation, purchase or otherwise, all or substantially all of
the assets of the Holding Company or the Savings Bank.
(b) Since the Savings Bank is contracting for the unique and personal
skills of the Officer, the Officer shall be precluded from
assigning or delegating his rights or duties hereunder without
first obtaining the written consent of the Savings Bank.
12. Modification: Waiver: Amendments. 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 Officer and on behalf of the
Savings Bank by such officer as may be specifically designated by the Directors.
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 amendments or additions to this Agreement shall be binding unless in
writing and signed by both parties, except as herein otherwise provided.
13. Applicable Law. This Agreement shall be governed in all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of North Carolina, except to the extent that federal law shall be deemed to
apply.
14. Severability. 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.
IN WlTNESS WHEREOF, the parties have executed this Agreement as of the
day and year first herein above written.
HILLSBOROUGH SAVINGS BANK, INC., SSB
By: /s/M. Xxxxxx Xxxxx
----------------------
M. Xxxxxx Xxxxx
Chairman of the Board
By: /s/Xxxxxx X. Xxxxx (SEAL)
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Xxxxxx X. Xxxxx
The foregoing Agreement is consented and agreed to by Piedmont
Bancorp, Inc., the parent holding company of Hillsborough Savings Bank, Inc.,
SSB.
PIEDMONT BANCORP, INC.
By: /s/ M. Xxxxxx Xxxxx
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M. Xxxxxx Xxxxx
Chairman of the Board
