EXHIBIT 10.16
AMENDED AND RESTATED
SALARY CONTINUATION AGREEMENT
This Amended and Restated Salary Continuation Agreement (the "Agreement")
is made and entered into this 22nd day of December, 1997, by and between First
Charter National Bank, a national banking association, hereinafter referred to
as the "Bank," and Xxxx X. Xxxxxxx, Xx., hereinafter referred to as "Employee."
Statement of Purpose
Employee currently is a party to that certain Salary Continuation Agreement
dated March 16, 1993 (the "Existing Agreement") between Employee and Carolina
State Bank, a corporation organized and existing under the laws of the State of
North Carolina ("CSB"). As of the close of business on December 22, 1997, CSB
will merge with and into the Bank, and Employee's employment with and the
separate corporate existence of CSB shall cease. Under the Existing Agreement,
Employee generally forfeits his right to salary continuation benefits in the
event that he voluntarily terminates or resigns his employment with the Bank, as
successor by merger with CSB. The Bank desires to employ Employee and Employee
desires to be employed to provide services to the Bank pursuant to the terms of
this Agreement. The Bank and Employee have agreed that, in consideration of
Employee's employment with the Bank, as successor to CSB, and the Bank's
agreement to limit the termination of service provisions of the Existing
Agreement as set forth in Article I.C. below and the other terms and conditions
of this Agreement, Employee and the Bank shall enter into this Amended and
Restated Salary Continuation Agreement, which amends, restates and supersedes
the Existing Agreement in its entirety.
NOW, THEREFORE, in consideration of services performed by Employee in the
future and based upon the mutual promises and covenants herein contained, the
Bank and the Employee agree as follows:
I. ARTICLE ONE - DEFINITIONS
A. Effective Date
The effective date of this Agreement shall be December 23, 1997.
B. Normal Retirement Date
The Normal Retirement Date shall mean the Employee's 65th birthday.
C. Termination Of Service
Termination of Service shall mean the Bank's discharge of the Employee
for Due Cause as defined in Article V.G. hereof. If a dispute arises
as to discharge for Due
Cause, such dispute shall be resolved by arbitration as set forth in
Article VI.B. hereof.
II. ARTICLE TWO - EMPLOYMENT
A. Employment
The Bank agrees to employ Employee in such capacity as the Bank may
from time to time agree and/or determine with such duties,
responsibilities and compensation as determined by the President and
Chief Executive Officer of the Bank and/or the Board of Directors of
the Bank (the "Board of Directors").
Employee agrees to remain in the Bank's employment, to devote his full
time and attention exclusively to the business of the Bank and to use
his best efforts to provide faithful and satisfactory service to Bank.
Employment services shall include temporary disability not to exceed
six months "leave of absences" specifically granted Employee by the
Board of Directors.
B. No Employment Agreement Created
No provision of this Agreement shall be deemed to restrict or limit
any existing employment agreement by and between the Bank and the
Employee nor shall any conditions herein create specific employment
rights with respect to any term or guarantee of employment with the
Bank nor in any way limit the Bank's ability to terminate Employee's
employment relationship with the Bank at any time with or without
cause. In a similar fashion, no provision of this Agreement shall
limit the Employee's rights to voluntarily sever his employment with
the Bank at any time.
III. ARTICLE THREE - BENEFITS
The benefits provided by the Bank to the Employee pursuant to this
Agreement are in the nature of a fringe benefit and shall in no event be
construed to effect nor limit the Employee's current or prospective salary
increases, cash bonuses or profit-sharing distributions or credits, if any.
A. Retirement Benefits
Subject to the provisions of this Agreement, Employee shall be
entitled to receive monthly from the Bank the sum of $8,333.33,
commencing on the first day of the month following Employee's Normal
Retirement Date and continuing for a period of one hundred and twenty
(120) consecutive months. In the event the Employee should die
following his Normal Retirement Date but before the expiration of such
one hundred and twenty (120) months, the unpaid balance of such
monthly payments shall be paid monthly by the Bank for the remainder
of such period to the beneficiary selected by Employee in the
Beneficiary Designation Form provided by the Bank. In
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the absence of or failure of the Employee to designate a beneficiary,
or in the event the designated beneficiary shall have predeceased the
Employee, the unpaid balance of the above retirement benefits shall be
commuted at 75% and paid in a lump sum to the personal representative
of the Employee's estate.
B. Effect of Termination Of Service
Upon the occurrence of a Termination of Service, all of Employee's
benefits under this Agreement shall be automatically forfeited and
this Agreement shall become null and void.
C. Death Benefit Prior To Retirement
Subject to the provisions of this Agreement, should the Employee die
prior to his Normal Retirement Date, the Bank agrees to pay to the
Employee's designated beneficiary the monthly sum of $8,333.33
commencing on the first day of the month following Employee's death
and continuing for a period of one hundred and twenty (120)
consecutive months. If the designated beneficiary should die prior to
the expiration of such one hundred twenty (120) months, the remaining,
unpaid installments shall be commuted at 75% and paid in a lump sum to
the personal representative of the designated beneficiary.
Employee shall declare his designated beneficiary in writing on a form
provided by the Bank. In the absence of or a failure to designate a
beneficiary, or in the event the designated beneficiary shall have
predeceased the Employee, the unpaid balance shall be commuted at 75%
and paid in a lump sum to the personal representative of the
Employee's estate.
In the event the Employee's death shall be the result of suicide
within a two year period following the effective date of this
Agreement, then no death benefits shall be payable to the Employee or
his designated beneficiary.
IV. ARTICLE FOUR - RESTRICTIONS UPON FUNDING
Bank shall have no obligation to set aside, earmark or entrust any fund or
money with which to pay its obligations under this Agreement. The Employee,
his beneficiaries or any successor in interest to him shall be and remain
simply a general creditor of the Bank in the same manner as any other
creditor having a general claim for matured and unpaid compensation.
The Bank reserves the absolute right at its sole discretion to either fund
the obligations undertaken by this Agreement or to refrain from funding the
same and to determine the extent, nature and method of such funding.
Should Bank elect to fund this Agreement, in whole or in part, through the
purchase of life insurance, mutual funds, disability policies or annuities,
the Bank reserves the absolute right,
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in its sole discretion, to terminate such funding at any time, in whole or
in part. At no time shall the Employee be deemed to have any lien nor
right, title or interest in or to any specific funding investment or to any
assets of the Bank.
If Bank elects to invest in a life insurance, disability or annuity policy
upon the life of Employee, then Employee shall assist the Bank by freely
submitting to a physical exam and supplying such additional information
necessary to obtain such insurance or annuities.
V. ARTICLE FIVE - MISCELLANEOUS
A. Alienability And Assignment Prohibition
Neither Employee, his widow nor any other beneficiary under this
Agreement shall have any power or right to transfer, assign,
anticipate, hypothecate, mortgage, commute, modify or otherwise
encumber in advance any of the benefits payable hereunder nor shall
any of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the Employee
or his beneficiary, nor be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise. In the event the
Employee or any beneficiary attempts assignment, commutation,
hypothecation, transfer or disposal of the benefits hereunder, the
Bank's liabilities shall forthwith cease and terminate.
B. Binding Obligation Of Bank And Any Successor In Interest
Bank expressly agrees that it shall not merge or consolidate into or
with another bank or corporation or sell substantially all of its
assets to another corporation, firm or person until such corporation,
firm or person expressly agrees, in writing, to assume and discharge
the duties and obligations of the Bank under this Agreement. This
Agreement shall be binding, upon the parties hereto, their successors,
beneficiaries, heirs and personal representatives.
C. Revocation
It is agreed by and between the parties hereto that, during the
lifetime of the Employee, this Agreement may be amended or revoked at
any time or times, in whole or in part, by the mutual written assent
of the Employee and the Bank.
D. Gender
Whenever in this Agreement words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine
or neuter gender, whenever they should so apply.
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E. Effect On Other Bank Benefit Plans
Nothing contained in this Agreement shall affect the right of the
Employee to participate in or be covered by any qualified or
non-qualified pension, profit sharing, group, bonus or other
supplemental compensation or fringe benefit plan constituting a part
of Bank's existing or future compensation structure.
F. Headings
Headings and Subheadings in this Agreement are inserted for reference
and convenience only and shall not be deemed a part of this Agreement.
G. "Due Cause"
"Due Cause" shall mean:
1. Any act of dishonesty, fraud or neglect of job duties by Employee
in connection with his employment with the Bank or against any
parent, affiliate or subsidiary company of the Bank;
2. Any conviction, guilty plea or plea of nolo contendere by
Employee for any crime involving moral turpitude or for any
felony, if the Board of Directors reasonably deems that such
conviction or plea may have a significant adverse effect upon the
Bank or any parent, affiliate or subsidiary company of the Bank
or upon Employee's ability to perform under this Agreement;
3. Repeated use of alcohol during or after working hours that
materially interferes with Employee's duties under this
Agreement, use of illegal drugs or violation of the Bank's drug
and/or alcohol policies by Employee;
4. Excessive absenteeism not related to illness, authorized
family/medical leave or vacation;
5. An intentional violation by Employee of the Bank's policies,
rules or instructions;
6. Insubordination or Employee's unwillingness or failure to carry
out the reasonable performance criteria established by the Board
of Directors from time to time;
7. The breach or threatened breach of any provision of this
Agreement by Employee or under any other agreement between
Employee and the Bank; or
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8. The occurrence of any event or circumstance which would prevent
the Bank from obtaining a fidelity bond with respect to
Employee's performance of his duties with the Bank.
H. Applicable Law
The validity and interpretation of this Agreement shall be governed by
the laws of the State of North Carolina.
I. Existing Agreement
This Agreement amends and restates the Existing Agreement in its
entirety.
VI. ARTICLE SIX - ERISA PROVISIONS
A. Named Fiduciary And Plan Administrator
The "Named Fiduciary And Plan Administrator" of this Agreement shall
be the Compensation Committee of the Board of Directors of First
Charter Corporation, until such administrator's resignation or removal
by the Board of Directors. As Named Fiduciary and Administrator, such
administrator shall be responsible for the management, control and
administration of this Agreement as established herein. Such
administrator may delegate to others certain aspects of the management
and operation responsibilities of the Agreement including the
employment of advisors and the delegation of administrative duties to
qualified individuals.
B. Claims Procedure and Arbitration
In the event that benefits under this Agreement are not paid to the
Employee (or to his beneficiary in the case of the Employee's death)
and such claimants feel they are entitled to receive such benefits,
then a written claim must be made to the Named Fiduciary and
Administrator named above within sixty (60) days from the date
payments are refused. The Named Fiduciary and Administrator and the
Bank shall review the written claim, and if the claim is denied, in
whole or in part, they shall provide in writing within ninety (90)
days of receipt of such claim their specific reasons for such denial,
reference to the provisions of this Agreement upon which the denial is
based and any additional material or information necessary to perfect
the claim. Such written notice shall further indicate the additional
steps to be taken by claimants if a further review of the claim denial
is desired. A claim shall be deemed denied if the Named Fiduciary and
Administrator fails to take any action within the aforesaid ninety-day
period.
If claimants desire a second review, they shall notify the Named
Fiduciary and Administrator in writing within sixty (60 ) days of the
first claim denial. Claimants may review the Agreement or any
documents relating thereto and submit any written
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issues and comments they may feel appropriate. In its sole discretion,
the Named Fiduciary and Administrator shall then review the second
claim and provide a written decision within sixty (60) days of receipt
of such claim. This decision shall likewise state the specific reasons
for the decision and shall include reference to specific provisions of
the Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of the Agreement or the meaning and effect of
the terms and conditions thereof, then claimants may submit the
dispute to a Board of Arbitration for final, binding arbitration. Said
Board shall consist of one member selected by the claimant, one member
selected by the Bank and the third member selected by the first two
members. The Board shall operate under any generally recognized set of
arbitration rules agreed upon by the Bank and the Employee. The
parties hereto agree that they and their heirs, personal
representatives, successors and assigns shall be bound by the decision
of such Board with respect to any controversy properly submitted to it
for determination.
Where a dispute arises as to the Bank's discharge of Employee for Due
Cause, such dispute shall likewise be submitted to arbitration as
above described and the parties hereto agree to be bound by the
decision thereunder.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully
read this Agreement and executed the original thereof as of the _____ day of
December, 1997, and that, upon execution each has received a conforming copy.
/s/ XXXXXXXX X. XXXXXXXXX /s/ XXXX X. XXXXXXX, XX. (SEAL)
------------------------- -----------------------
WITNESS EMPLOYEE
ATTEST: FIRST CHARTER NATIONAL BANK
/s/ XXXX X. XXXXXXX By: /s/ XXXXXXXX X. XXXXXXXXX
----------------------------- -----------------------------
Assistant Corporate Secretary Xxxxxxxx X. Xxxxxxxxx
President and Chief Executive
(SEAL) Officer
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SALARY CONTINUATION BENEFICIARY DESIGNATION
Employee, Xxxx X. Xxxxxxx, Xx., under the terms of a certain Amended and
Restated Salary Continuation Agreement by and between him and First Charter
National Bank, dated as of December ______, 1997, hereby designates the
following beneficiary to receive any guaranteed payments or death benefits under
such Agreement, following his death:
PRIMARY BENEFICIARY: ________________________
SECONDARY BENEFICIARY: _______________________
This Beneficiary designation hereby revokes any prior beneficiary designation
which may have been in effect.
Such beneficiary designation is revocable.
DATE: ____________ , 19 ___
______________________________ ________________________________
WITNESS EMPLOYEE
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