EMPLOYMENT AGREEMENT OF JAMES B. SCHWIERS
EXHIBIT
10.1
EMPLOYMENT
AGREEMENT OF XXXXX X. XXXXXXXX
STATE
OF SOUTH CAROLINA
COUNTY
OF GREENVILLE
THIS
EMPLOYMENT AGREEMENT (the
"Agreement") is entered into as of
7th day of
March, 2005 (the "Effective Date"), by and between SUMMIT
FINANCIAL CORPORATION
("Summit") and XXXXX
X. XXXXXXXX
("Employee").
W
I T N E S S E T H:
WHEREAS,
Employee currently is employed by Summit as EVP, Chief Operating Officer of
Summit's wholly-owned subsidiary, Summit National Bank ("SNB"), pursuant to an
Employment Agreement between Summit and Employee dated September 2, 1999 (the
"Existing Agreement"), and in such position Employee has provided leadership and
guidance in the growth and development of Summit's and SNB's business;
and,
WHEREAS, Summit
and SNB propose to enter into an Agreement and Plan of Reorganization and Merger
with First Citizens Bank and Trust Company, Inc. ("FCB"), under which Summit and
SNB will be merged into FCB (the "Merger") and their operations will be combined
with those of FCB; and,
WHEREAS, as a
result of his ownership of shares of Summit's common stock, together with his
right to purchase additional shares pursuant to stock options previously granted
to him by Summit, Employee has a substantial financial interest in Summit and
will receive substantial personal financial benefits from the Merger; and,
therefore, Employee desires that FCB enter into the Merger with Summit;
and,
WHEREAS,
Employee's experience and knowledge of Summit's and SNB's operations, customers,
and affairs, and Employee's knowledge of and standing and reputation in Summit's
and SNB's market area, have contributed to Summit's and SNB's business success,
and they will be of continuing benefit to FCB in its succession to and
continuation of Summit's and SNB's business following the Merger; and, for that
reason, and for its own benefit as well as for the benefit of FCB following the
Merger, Summit and FCB desire for Employee to continue as an employee of Summit
and its successors in interest, including FCB, for the Term of Employment
specified below and to restrict Employee's ability to compete against Summit,
SNB or FCB in Summit's banking markets for a reasonable period following any
termination of Employee's employment; and, as a condition to its agreement to
enter into the Merger, and to provide for the terms of Employee's continuing
employment with Summit before the Merger and with FCB following the Merger, FCB
has requested that Summit and Employee enter into a new employment agreement
that will replace the Existing Agreement; and
WHEREAS,
Employee desires to remain as an employee of Summit and, if the Merger is
completed, as an employee of FCB following the Merger, and Employee desires to
accept Summit's offer of continued employment on the basis described herein;
and,
WHEREAS, in
contemplation of the Merger, and as an inducement for FCB to enter into the
Merger, Summit and Employee desire to set forth the terms and conditions of
Employee's continued employment with Summit and his employment with FCB
following the Merger in a new written agreement and, for that purpose, Summit
and Employee have agreed to enter into this Agreement with the intent that this
Agreement be binding on and inure to the benefit of Summit as well as its
successors in interest, including FCB following the Merger; and,
WHEREAS, Summit
and Employee have agreed that, (i) from and
after the Effective Date, the provisions of the Existing Agreement will be
suspended and this Agreement will define and control their respective
rights and obligations and, following the Merger, those of Employee and FCB,
(ii) when the
Merger becomes effective, the Existing Agreement will be terminated and of no
further force or effect retroactive to the Effective Date, and (iii) if the
Merger does not become effective on or before the date specified herein, then
this Agreement shall terminate and be of no further force or effect and the
provisions of the Existing Agreement shall be reinstated retroactive to the
Effective Date and thereafter define and control the respective rights and
obligations of Summit and Employee.
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NOW,
THEREFORE, in
consideration of the premises and mutual promises, covenants and conditions
hereinafter set forth, and for other good and valuable considerations, the
receipt and sufficiency of which hereby are acknowledged, Summit and Employee
hereby agree as follows:
1. "Employer." As used
throughout the remainder of this Agreement, and except as otherwise indicated by
the context, the term "Employer" is intended to refer to Summit and, following
the Merger, to FCB which, by virtue of and at the effective time of the Merger,
shall assume Summit's obligations and succeed to its rights and interests
hereunder.
2. Employment.
Employer agrees to employ Employee, and Employee accepts employment with
Employer, upon the terms and conditions stated herein. As an employee of
Employer, Employee will (i) serve in
such position or positions as shall be specified from time to time by Employer's
Board of Directors, (ii) provide
such assistance and advice to Employer as it may request from time to time
regarding matters involving Employer's customers and employees, quality control
and review, and other tasks relating to Employer's operations and, following the
Merger, the transition of control over such operations,
(iii) promote
Employer and its business and engage in business development activities on
Employer's behalf, and (iv) have
such other duties and responsibilities, and render to Employer such other
management services, as are customary for persons employed in Employee's
position and/or as shall be assigned to Employee from time to time by
Employer.
3. Term. Unless
sooner terminated as provided in this Agreement, and subject to the right of
either Employee or Employer to terminate Employee's employment at any time as
provided herein, the term of Employee's employment with Employer under this
Agreement (the "Term of Employment") shall be for a period commencing on the
Effective Date and, except as otherwise described below, terminating on the
"Expiration Date" which, for purposes of this Agreement, shall be the close of
business on the third anniversary date of the effective date of the Merger (the
"Merger Date"). Employee's employment following the Expiration Date shall be on
an "at will" basis. Notwithstanding anything contained herein to the contrary,
if the Merger has not become effective on or before the "Termination Date"
specified in Paragraph 7(a), then this Agreement and the Term of Employment will
terminate on that date as provided in that Paragraph and the Existing Agreement
shall be reinstated as provided in Paragraph 10(a)(iii).
4. Cash
Compensation and Expense Reimbursement.
(a) Base
Salary.
For all
services rendered by Employee under this Agreement, during the Term of
Employment Employer shall pay Employee base salary at an annual rate of
ONE
HUNDRED-EIGHTY-EIGHT-THOUSAND-FIVE-HUNDRED AND NO/100s DOLLARS
($188,500.00)
("Base Salary"). Base Salary shall be payable not less frequently than monthly
in accordance with Employer's payroll policies and procedures, and shall be
reviewed, and at Employer's discretion may be increased, from time to time by
Employer in accordance with its normal salary and performance review policies
and procedures.
(b) Additional
Cash Payments. In
further consideration for Employee's execution of this Agreement and his
agreements described herein (including without limitation his agreements under
Paragraph 8 below), Employer agrees to make the following additional payments to
Employee.
(i) Immediately
prior to consummation of the Merger on the Merger Date, Employer will pay to
Employee the sum of FIFTY
THOUSAND AND NO/00s DOLLARS
($50,000.00) (the "Initial Bonus"). Except as described in Paragraph 7(f)(iv)
below in the case of a termination of Employee's employment "without Cause,"
Employee shall have no right to receive the Initial Bonus if Employee's
employment is terminated, voluntarily or involuntarily, for any reason prior to
consummation of the Merger. Likewise, Employee shall have no right to receive
the Initial Bonus if this Agreement terminates in the manner described in
Paragraph 7(a) below.
(ii) If
Employee remains employed by Employer at the close of business on the Expiration
Date, then, at that time, Employer shall pay to Employee the sum of ONE
HUNDRED THOUSAND AND NO/00s DOLLARS ($100,000.00) (the
"Additional Bonus"). Except as described in Paragraph 7(f)(iv) below in the case
of a termination of Employee's employment "without Cause," Employee shall have
no right to receive the Additional Bonus if Employee's employment is terminated,
voluntarily or involuntarily, for any reason prior to the Expiration Date.
Likewise, Employee shall have no right to receive the Additional Bonus if this
Agreement terminates in the manner described in Paragraph 7(a)
below.
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(c) Expense
Reimbursement. Employer
shall reimburse Employee for reasonable business expenses incurred by Employee
in performance of Employee’s duties hereunder, provided that those expenses are
of a type that are reimbursable under employee expense reimbursement policies
adopted by Employer from time to time and that Employee shall, as a condition of
reimbursement, submit verification of the nature and amount of such expenses in
accordance with Employer's reimbursement policies and in sufficient detail to
comply with rules and regulations promulgated by the Internal Revenue
Service.
5. Employee
Benefit Plans; Incentive Compensation Plans; Income
Taxes.
(a) Benefit
and Incentive Plans. During
the Term of Employment, Employee shall be eligible to participate in any and all
employee benefit programs maintained by or for Employer that are generally
available to and which cover all Employer’s employees, and in any incentive
compensation plans provided by Employer that are generally available to and
which cover all Employer’s officers at Employee's job level or classification,
subject in each case to the rules applicable to such plans or programs
prevailing from time to time. Except as otherwise specifically provided herein,
Employee's participation in such plans and programs shall be subject to and in
accordance with the terms and conditions (including eligibility requirements) of
such plans and programs, resolutions of Employer's Board of Directors
establishing such plans and programs, and Employer's normal practices and
established policies regarding such plans and programs.
Employee
acknowledges that the terms and provisions of Employer's employee benefit and
incentive compensation plans and programs from time to time may be determined
only by reading the actual plan documents under which Employer or the plan
administrator, as applicable, may make certain administrative determinations
with discretion, and that Employer reserves the right to modify or terminate
each plan or program and any benefits provided thereunder.
(b) Taxes;
Withholding. All
cash or other compensation payable or provided to Employee under this Agreement
shall be subject to any and all applicable withholding, Social Security,
employment, income and such other taxes, deductions or assessments as are
required by law or customary for Employer's employees. Employee shall be solely
responsible for any income and other taxes owed on account of Employee's receipt
from Employer of all compensation and benefits under this Agreement and, to the
extent that Employer reasonably believes itself obligated to do so, Employer may
withhold any such taxes from any cash compensation payable to Employee. If the
amount of any such taxes that Employer believes itself required to withhold and
transmit to any governmental or taxing authority exceeds the amount of any
payments then due and payable to Employee and from which such withholding may be
made, then Employer may require that Employee pay to it the full amount of any
such taxes then due and, if Employee shall fail to make such payment, Employer
may itself advance and pay the amount of those taxes and recover any such
payments by offset against other or future payments payable by Employer to
Employee under this Agreement or otherwise.
6. Standards
of Performance and Conduct. During
the Term of Employment, Employee faithfully and diligently shall discharge
Employee's obligations under this Agreement, perform the duties associated with
Employee's positions with Employer in a manner which is reasonably competent and
satisfactory to Employer and in accordance with any performance standards
established from time to time by Employer, and make a reasonable effort in good
faith to comply with and implement Employer's policies and procedures in effect
and as established from time to time by Employer.
In the
execution of Employee's employment duties under this Agreement, Employee shall,
at all times and in all material respects, comply with any codes or standards of
conduct or ethics policies applicable to Employee and/or Employer's employees in
general, as in effect as of the Effective Date or as may be adopted, amended or
supplemented from time to time subsequent thereto (the "Code of Conduct"), and
with all federal and state statutes, and all rules, regulations, administrative
orders, statements of policy, and other pronouncements or standards promulgated
thereunder, which are applicable to Employer and its employees, business, and
operations.
Employee
shall devote substantially all of the Employee’s time, energy and skill during
regular business hours to the performance of the duties of the Employee’s
employment (reasonable vacations and reasonable absences due to illness
excepted).
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7. Termination
and Termination Pay.
(a) Automatic
Termination. In the
event that the Merger does not become effective on or before December 31, 2005
(the "Termination Date"), then, without action on the part of Employer or
Employee, the Term of Employment and this Agreement automatically shall
terminate and this Agreement shall be of no further force or effect, and the
Existing Agreement shall be reinstated as provided in Paragraph 10(a)(iii).
(b) By
Employee. The
Term of Employment and Employee's employment under this Agreement may be
terminated at any time by Employee upon 60 days' written notice to Employer.
(c) Death
or Retirement. The
Term of Employment and Employee's employment under this Agreement automatically
shall be terminated upon Employee's death during the Term of Employment or upon
the effective date of Employee's "Retirement." As used
in this Agreement, the term "Retirement" shall mean a termination of Employee's
employment with Employer which is treated as a "retirement" under the terms of
any of Employer's retirement plans, or such other termination of Employee's
employment as Employer and Employee shall agree in writing to treat as
"Retirement" for purposes of this Agreement.
(d) By
Employer.
Employer may terminate the Term of Employment and Employee's employment under
this Agreement at any time and for any reason satisfactory to Employer, and
whether or not for "Cause" as defined below.
Notwithstanding
any provision in this Agreement to the contrary, before Employer may terminate
Employee's employment for a Cause described in Paragraph 7(d)(i)(A) below,
Employer first shall give Employee thirty (30) days written notice of the facts
or circumstances constituting such Cause for termination, and, if during such
period Employee shall cure such Cause to the reasonable satisfaction of
Employer, then Employee's employment shall continue; provided however that, in
the event of any reoccurrence or further occurrence of the same Cause, Employer
shall have no obligation to give Employee any further or additional notice or
opportunity to cure prior to the termination of Employee's employment. Except as
specifically described above, no such notice or opportunity to cure shall be
required in the case of termination of Employee's employment for any Cause.
For
purposes of this Paragraph 7(d), Employer shall have "Cause" to terminate
Employee's employment upon:
(i) A
determination by Employer, in good faith, that (A)
Employee
has breached in any material respect any of the terms or conditions of this
Agreement, or has failed in any material respect to perform or discharge
Employee's duties or responsibilities of employment in the manner provided
herein, or that (B) Employee
has violated any provision of the Code of Conduct, or has engaged in willful
misconduct or conduct which is detrimental in any material respect to the
business or business prospects of Employer or its parent or other affiliated
companies, or which has had or likely will have an adverse effect on Employer's
or its parent's or other affiliates' business or reputation;
(ii) The
violation by Employee of any applicable federal or state law, or any applicable
rule, regulation, order, or statement of policy promulgated by any governmental
agency or authority having jurisdiction over Employer or its parent or
affiliated companies, or the operations of any of their respective departments
or divisions, including but not limited to the South Carolina Commissioner of
Banks, the Federal Deposit Insurance Corporation, the Comptroller of the
Currency, the South Carolina Board of Financial Institutions, the Federal
Reserve Board, the Securities and Exchange Commission, or any other state or
federal regulator (a "Regulatory Authority"), that results from Employee's
negligence, willful misconduct, or intentional disregard of such law, rule,
regulation, order, or policy statement;
(iii) The
commission in the course of Employee's employment with Employer of an act of
fraud, embezzlement, theft, or proven personal dishonesty (whether or not such
act or charge results in criminal indictment, charges, prosecution, or
conviction), or the willful making in the course of Employee's employment with
Employer of any false statement or representation;
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(iv) The
conviction of Employee of any felony or any criminal offense involving
dishonesty or breach of trust, or the occurrence of any event described in
Section 19 of the Federal Deposit Insurance Act or any other event or
circumstance which disqualifies Employee from serving as an employee or
executive officer of, or a party affiliated with, Employer or its parent or
affiliated companies; or, in the event Employee becomes unacceptable to, or is
removed, suspended, or prohibited from participating in the conduct of
Employer's or its parent's or affiliated companies' affairs (or if proceedings
for that purpose are commenced), by any Regulatory Authority; or
(v) Employee's
excessive use of any addictive drug or use of any controlled substance, as
defined at 21 U.S.C. § 802 and listed on Schedules I through V of
21 U.S.C. § 812, as revised from time to time, and as defined by
other federal laws or regulations, Employee's use of legal drugs that have not
been obtained legally or are not being taken as prescribed by a licensed
physician, or Employee's use of alcohol in a manner that adversely affects the
performance of Employee's job duties under this Agreement, prevents Employee
from performing Employee's job duties safely or creates a risk to the safety of
others at the workplace; or,
(vi) The
exclusion of Employee by the carrier or underwriter from coverage under
Employer's then current "blanket bond" or other fidelity bond or insurance
policy covering its directors, officers, or employees, or the occurrence of any
event that Employer believes, in good faith, will result in Employee being
excluded from such coverage, or having coverage limited as to Employee as
compared to other covered officers or employees, pursuant to the terms and
conditions of such "blanket bond" or other fidelity bond or insurance
policy.
(e) Disability. Subject
to Employer's obligations and Employee's rights under (i) Title I
of the Americans with Disabilities Act, the Family and Medical Leave Act, and
any other applicable federal or state laws, and to (ii) the
vacation leave, disability leave, sick leave and any other leave policies of
Employer, Employee's employment under this Agreement automatically shall be
terminated in the event Employee becomes disabled during the Term of Employment
and it is reasonably determined by Employer that Employee is unable to perform
the essential functions of Employee's job under this Agreement for ninety (90)
days or more during any 12-month period. Employee agrees to submit to such
medical examinations as may be reasonably requested by Employer in accordance
with applicable law with regard to the issue of disability of Employee, with
permanent disability hereunder and the effective date thereof to be determined
by Employer.
(f)
Effect
of Termination.
(i) In the
event of a termination of this Agreement on the Termination Date as provided in
Paragraph 7(a) above, then, notwithstanding anything contained herein to the
contrary, this Agreement shall be of no further force or effect and neither
Employee nor Employer shall have any further rights or obligations hereunder,
including without limitation any rights or obligations pursuant to Paragraph 8
below or any right or obligation with respect to the Initial Bonus or the
Additional Bonus, and the Existing Agreement shall be reinstated as provided in
Paragraph 10(a)(iii).
(ii) Except as
otherwise provided below or in Paragraph 7(a) above, on the Expiration Date this
Agreement shall terminate and neither Employee nor Employer shall have any
further rights or obligations hereunder. Employee's covenants contained in
Paragraph 8 below and Employee's and Employer's respective rights and
obligations thereunder shall survive and remain in effect in accordance with
their terms following the Expiration Date.
(iii) Except as
otherwise provided below or in Paragraph 7(a) above, upon any termination of
Employee's employment during the Term of Employment for any reason, Employee
(or, in the case of Employee's death, Employee's estate) shall be entitled to
receive earned but unpaid Base Salary due under this Agreement through the date
of such termination (or, in the case of termination under Paragraph 7(b) above,
through any earlier date on which Employee ceases to provide services to
Employer), and, thereafter, Employee shall have no further rights, and Employer
shall have no further obligations, under this Agreement, including any right or
obligation with respect to the Additional Bonus and, if such termination of
employment occurs before the Merger Date, any right or obligation with respect
to the Initial Bonus; provided, however, that (A)
Employer's obligations under subparagraph (iv) below (if any), and Employee's
covenants contained in Paragraph 8 below and Employee's and Employer's
respective rights and obligations thereunder, shall survive and remain in effect
in accordance with their terms following any actual termination of Employee's
employment during the Term of Employment, and (B) in the
case of termination of employment as a result of Employee's disability as
provided in Paragraph 7(e), Employee shall be entitled to any payments provided
under any disability income plan of Employer which is applicable to
Employee.
(iv) Notwithstanding
subparagraph (iii) above, in the case of a termination of Employee's employment
by Employer prior to the Expiration Date under Paragraph 7(d) without
Cause,
Employer shall remain obligated to (i)
pay Base
Salary to Employee at Employee's then current Base Salary rate for the then
current unexpired Term of Employment hereunder (which payments shall be made on
the same schedule as Employee's Base Salary was paid by Employer during the Term
of Employment), (ii) in the
case of such a termination prior to the Merger Date, pay the Initial Bonus to
Employee on the Merger Date, (iii) pay the
Additional Bonus to Employee at the time Employer pays the final payment of Base
Salary, and, (iv)
if
Employee chooses to exercise Employee's rights to purchase continued health
insurance coverage under Employer's health insurance plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), reimburse Employee for
the cost of such continued insurance coverage for the maximum period during
which such coverage is available to and actually purchased by Employee under
COBRA, but not longer than the unexpired Term of Employment hereunder.
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8. Noncompetition;
Nonsolicitation; Nonpiracy; Confidentiality.
(a) General.
Employee hereby acknowledges and agrees that (i) Summit
and its subsidiaries, including SNB (collectively referred to in this Paragraph
8 as "Summit"), have made a significant investment in the development of their
business in Summit's banking market included in geographic area identified below
as the "Relevant Market" and that, by virtue of FCB's acquisition of Summit, FCB
will acquire a valuable economic interest in Summit's business in the Relevant
Market which it is entitled to protect; (ii) in the
course of Employee's service on behalf of Summit and future service as an
employee of FCB, Employee has gained and will gain substantial knowledge of and
familiarity with Summit's and FCB's customers and their dealings with them, and
other information concerning Summit's and FCB's businesses, all of which
constitute valuable assets and information proprietary to them; and (iii) in order
to protect Summit's and FCB's interests in their businesses, and to assure FCB
the benefit of its acquisition of and succession to Summit's business, it is
reasonable and necessary to place certain restrictions on Employee's ability to
compete against Summit and FCB and on Employee's disclosure of information about
Summit's and FCB's businesses and customers. For that purpose, and in
consideration of Employer's agreements contained herein, Employee covenants and
agrees with Employer as provided below. For purposes of this Paragraph 8,
references to "Employer" shall be considered to refer to Summit, including its
subsidiaries, before the Merger and to FCB following the Merger.
(b) Definitions.
For
purposes of this Paragraph 8, the following terms shall have the meanings set
forth below:
Compete. The
term "Compete" means: (i) acting
as a consultant, officer, director, advisory director, independent contractor,
employee, organizer or sponsor of any Financial Institution that has, or will
have, its main or principal office in the Relevant Market (as defined below),
or, in acting in any such capacity with any other Financial Institution, to
maintain an office or be employed at or assigned to or to have any direct
involvement in the management, supervision, business, marketing activities, or
solicitation of business for or operation of any office of such Financial
Institution located in the Relevant Market; or (ii) communicating
to any Financial Institution the names or addresses of or any financial
information concerning any Person who was a Customer of Employer on the date of
termination of Employee's employment with Employer.
Confidential
Information. The
term "Confidential Information" means any and all information, including but not
limited to figures, projections, estimates, lists, files, records, documents,
manuals or other such materials or information (including any files, data or
information maintained electronically, on microfiche or otherwise) relating to
Customers, or relating to Employer and its respective lending, deposit and trust
operations and related businesses, regulatory examinations, financing sources,
financial results and condition, Customers (including lists of Customers and
former customers and information regarding their dealings with Employer),
prospective Customers, contemplated acquisitions (whether of business or
assets), ideas, methods, marketing investigations, surveys, research, policies
and procedures, computer systems and software, shareholders, employees, officers
and directors, which is
or has been disclosed to the Employee or of which the Executive became aware as
a consequence of or through the Employee’s relationship to Employer and which
has value to Employer and is not generally known to its competitors.
Confidential Information shall not include any data or information that has been
voluntarily disclosed to the public by Employer (except where such public
disclosure has been made by the Employee without authorization) or that has been
independently developed and disclosed by others, or that otherwise enters the
public domain through lawful means.
Customer. The
term "Customer" means any Person residing or located within the Relevant Market
with whom Employer has a depository or loan relationship and/or to whom Employer
is providing any service or product.
Financial
Institution. The
term "Financial Institution" means (i) any
federal or state chartered bank, savings bank, savings and loan association, or
credit union (a "Depository Institution"), (ii) any
holding company for, or corporation that owns or controls, any Depository
Institution (a "Holding Company"), (iii) any
direct or indirect subsidiary, service corporation or affiliate of any
Depository Institution or Holding Company, or any entity controlled in any way
by any Depository Institution or Holding Company, or (iv) any
other Person engaged in the business of making loans of any type, soliciting or
taking deposits, or providing any other service or product that is provided by
Employer or one of its affiliated corporations.
Person. The
term "Person" means any natural person or any corporation, partnership,
proprietorship, joint venture, limited liability company, trust, estate,
governmental agency or instrumentality, unincorporated association, or other
entity.
Relevant
Market. The
term "Relevant Market" means the areas encompassed by Greenville, Spartanburg,
Xxxxxxxx and Laurens Counties, South Carolina.
Restriction
Period. The
term "Restriction Period" means the period beginning on the Effective Date and
ending on the later of (i) two
years following the Merger Date in the event of any termination of Employee's
employment with Summit before the Merger Date, (ii) two
years following any termination of Employee's employment with FCB after the
Merger Date but before the Expiration Date, or (iii) if
Employee remains employed by Employer on the Expiration Date, one year following
the termination of this Agreement on the Expiration Date, and, in the case of
any termination of Employee's employment described in clauses (i) or (ii) above,
whether such termination is initiated by Employee or by Summit or FCB for any
reason; provided however that, in the case of a termination of Employee's
employment by Employer prior to the Expiration Date under Paragraph 7(d)
without
Cause, the
Restriction Period shall not extend beyond the date that is one year following
the Expiration Date, and the Restriction Period shall immediately expire upon a
default by Employer in making the payments for which it is obligated under
Paragraph 7(f)(iv) above. Notwithstanding anything contained herein to the
contrary, in the event any payment required under Paragraph 7(f)(iv) is not made
by Employer by the due date for that payment, Employer shall not be considered
to be in default with respect to that payment for purposes of this Paragraph 8
unless it shall fail to make that payment within ten business days after its
receipt of written notice from Employee that the payment has not been
made.
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(c) Covenant
Not to Compete.
Employee agrees that, during the Restriction Period, and in consideration of the
Employer's agreements hereunder, Employee shall not Compete, directly or
indirectly, with Employer.
(d) Covenant
Not to Solicit Customers.
Employee agrees that, during the Restriction Period, and in consideration of
Employer's agreements hereunder, Employee shall not solicit any Person who was a
Customer on the date of termination of Employee's employment with Employer to
become a depositor in or a borrower from any Financial Institution, to obtain
any other service or product from any Financial Institution, or to change any
depository, loan, and/or other banking relationship to any Financial
Institution, other than Employer.
(e) Covenant
Not to Solicit Employees.
Employee agrees that, during the Restriction Period, and in consideration of
Employer's agreements hereunder, Employee shall not, directly or indirectly, on
Employee's own behalf or on behalf of others, in the Relevant Market, solicit,
recruit or hire away or attempt to solicit, recruit or hire away, to another
person or entity providing products or services competitive with the business of
Employer, any full-time, part-time or temporary employee of Employer or its
affiliates, whether or not such employees are subject to an employment agreement
with Employer.
(f) Covenant
of Confidentiality.
Employee covenants and agrees that, in consideration of Employer's agreements
hereunder, all Confidential Information shall be considered and kept as the
confidential, private and proprietary records and information of Employer, and
except as shall be required in the course of the performance by Employee of
Employee's duties on behalf of Employer or otherwise pursuant to the direct,
written authorization of Employer, Employee, will not at any time (whether
during the Term of Employment or following the expiration or termination
thereof): divulge any such Confidential Information to any other Person; remove
any such Confidential Information in written or other recorded form from
Employer's premises; or make any use of any Confidential Information for
Employee's own purposes or for the benefit of any Person other than Employer.
The above obligations of confidentiality shall not prohibit the disclosure of
any such Confidential Information by Employee to Employee's attorneys (if each
such attorney is advised of the existence of this agreement), or to the extent
such disclosure is required by subpoena or order of a court or regulatory
authority of competent jurisdiction, or to the extent that, in the reasonable
opinion of legal counsel to Employee (which opinion, unless otherwise prohitibed
by law, shall be delivered in writing to Employer as far in advance as
practicable prior to such disclosure), disclosure otherwise is required by
law.
(g) Reasonableness
of Restrictions. If any of
the restrictions set forth in this Paragraph 8 shall be declared invalid
for any reason whatsoever by a court of competent jurisdiction, the validity and
enforceability of the remainder of such restrictions shall not thereby be
adversely affected. Employee acknowledges that Summit has a substantial presence
in the area included in Relevant Market, that FCB, through its merger with
Summit, will acquire a legitimate economic interest of Summit in the Relevant
Market which this Paragraph 8 specifically is intended to protect, and that the
Relevant Market and Restriction Period are limited in scope to the geographic
territory and period of time reasonably necessary to protect Summit's and FCB's
economic interest and otherwise are reasonable and proper. In the event the
Restriction Period or any other such time limitation is deemed to be
unreasonable by a court of competent jurisdiction, Employee hereby agrees to
submit to such reduction of the Restriction Period as the court shall deem
reasonable. In the event the Relevant Market is deemed by a court of competent
jurisdiction to be unreasonable, Employee hereby agrees that the Relevant Market
shall be reduced by excluding any separately identifiable and geographically
severable area necessary to make the remaining geographic restriction
reasonable, but this Paragraph 8 shall be enforced as to all other areas
included in the Relevant Market which are not so excluded.
(h) Remedies
for Breach.
Employee understands and acknowledges that Employee's breach or violation of any
of the covenants contained in Paragraphs 8(c), 8(d), 8(e) and 8(f) shall be
deemed a material breach of this Agreement and will cause substantial, immediate
and irreparable injury to Employer, and that Employer will have no adequate
remedy at law for such breach or violation. In the event of Employee's actual or
threatened breach or violation of the covenants contained in either such
Paragraph, Employer shall be entitled to bring a civil action seeking, and, upon
a finding by a court of competent jurisdiction that it appears likely that
Employee has breached or threatens to breach any of these covenants, shall be
entitled to, an injunction restraining Employee from violating or continuing to
violate such covenant or from any threatened violation thereof, or for any other
legal or equitable relief relating to the breach or violation of such covenant.
Employee agrees that, if Employer institutes any action or proceeding against
Employee seeking to enforce any of such covenants or to recover other relief
relating to an actual or threatened breach or violation of any of such
covenants, Employee shall be deemed to have waived the claim or defense that
Employer has an adequate remedy at law and shall not urge in any such action or
proceeding the claim or defense that such a remedy at law exists. However, the
exercise by Employer of any such right, remedy, power or privilege shall not
preclude Employer or its successors or assigns from pursuing any other remedy or
exercising any other right, power or privilege available to it for any such
breach or violation, whether at law or in equity, including the recovery of
damages, all of which shall be cumulative and in addition to all other rights,
remedies, powers or privileges of Employer.
7
Notwithstanding
any provision in this Agreement to the contrary, Employee agrees that the
provisions of Paragraphs 8(c), 8(d), 8(e) and 8(f) above and the remedies
provided in this Paragraph 8(h) for a breach by Employee shall be in
addition to, and shall not be deemed to supersede or to otherwise restrict,
limit or impair the rights of Employer under any state or federal law or
regulation dealing with or providing a remedy for the wrongful disclosure,
misuse or misappropriation of trade secrets or other proprietary or confidential
information.
(i) Survival
of Covenants.
Employee's covenants and agreements and Employer's rights and remedies provided
for in this Paragraph 8 shall survive and remain fully in effect following the
expiration of the Term of Employment or any actual termination of Employee's
employment with Employer during the Term of Employment; provided however that,
upon any termination of this Agreement pursuant to Paragraph 7(a) above,
Employee's covenants and agreements and Employer's rights and remedies provided
for in this Paragraph 8 likewise shall terminate and be of no further force or
effect. In the event that Employee remains in the employ of Employer following
the Expiration Date, then, upon any termination of his employment for any reason
following the date that is one year after the Expiration Date, Employee shall
have no further obligations pursuant to this Paragraph 8.
9. Additional
Regulatory Requirements.
Notwithstanding anything contained in this Agreement to the contrary, it is
understood and agreed that Employer (or any of its successors in interest) shall
not be required to make any payment or take any action under this Agreement if,
in the opinion of counsel to Employer such payment or action: (a)
would be
prohibited by or would violate any provision of state or federal law applicable
to Employer, including without limitation the Federal Deposit Insurance Act, as
now in effect or hereafter amended, (b) would be
prohibited by or would violate any applicable rules, regulations, orders or
statements of policy, whether now existing or hereafter promulgated, of any
Regulatory Authority, or (c)
otherwise would be prohibited by any Regulatory Authority.
10. Termination
of Previous Employment Arrangements. Except
as otherwise described in this Agreement below, Employee and Employer
specifically agree that this Agreement supersedes any and all prior agreements,
arrangements or understandings between Employee and Employer pertaining to
employment, compensation, severance benefits, or other such arrangements, either
oral or written. As additional consideration for Employer's agreements and
obligations under this Agreement, Employee hereby waives any and all rights, and
releases Employer from any and all obligations or liabilities, arising under any
such prior agreements, arrangements or understandings, or otherwise arising out
of the employment relationship between Employee and Employer, and agrees that
all such rights and liabilities hereby are terminated and shall be of no further
force or effect.
It is
understood that Employee and Summit are parties to the Existing Agreement and to
that certain Salary Continuation Agreement dated September 9, 1998, as amended
on January 2, 2002 (the "Salary Continuation Agreement"). Employee and Employer
agree that, notwithstanding anything contained in this Agreement to the
contrary:
(a) (i)
effective as of the Effective Date, the provisions of the Existing Agreement
shall be suspended and this Agreement alone shall be in effect and binding on
them and shall define and control the respective rights and obligations of
Employee and Summit, (ii) on the
Merger Date, the Existing Agreement automatically shall terminate and be of no
further force or effect retroactive to the Effective Date, and this Agreement
alone shall define and control the respective rights and obligations of Employee
and of FCB, as successor to Summit, and (iii) in the
event that this Agreement terminates on the Termination Date as described in
Paragraph 7(a) above, then the provisions of the Existing Agreement shall be
reinstated retroactive to the Effective Date and shall once again define and
control the respective rights and obligations of Employee and Summit;
and
(b) the
Salary Continuation Agreement described above shall remain in full force and
effect.
8
11. Successors
and Assigns.
(a) This
Agreement shall inure to the benefit of and be binding upon any corporate or
other successor of Employer (including FCB upon consummation of the Merger)
which shall acquire, directly or indirectly, by conversion, merger,
consolidation, purchase, or otherwise, all or substantially all of the assets of
Employer.
(b) Employer
is contracting for the unique and personal skills of Employee. Therefore,
Employee shall be precluded from assigning or delegating Employee's rights or
duties hereunder without first obtaining the written consent of
Employer.
12. Modification;
Waiver; Amendments. Any
term or condition of this Agreement may be waived, either in whole or in part,
at any time by the party which is entitled to the benefits thereof; provided,
however, that no waiver of any term or condition of this Agreement by any party
shall be effective unless such waiver is in writing and signed by the waiving
party. 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 failure or delay of any party to exercise any power, or to
insist upon a strict compliance by any other party of any obligation, and no
custom or practice at variance with any terms hereof, shall constitute a waiver
of the right of any party to demand full and complete compliance with such
terms. This Agreement may be amended, modified or supplemented only by an
agreement in writing executed in the same manner as this Agreement.
13. Applicable
Law. The
parties hereto agree that without regard to principles of conflicts of laws, the
internal laws of the State of South Carolina shall govern and control the
validity, interpretation, performance, and enforcement of this Agreement, except
to the extent that federal law shall be deemed to apply. Any suit or action
relating to this Agreement shall be instituted and prosecuted exclusively in the
Courts of Richland County, South Carolina, and each party hereto hereby does
waive any right or defense relating to such jurisdiction and venue.
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.
15. No
Set-Off by the Employee. The
existence of any claim, demand, action or cause of action by the Employee
against Employer or its parent or other affiliated companies, whether based upon
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Employer of any of its rights hereunder.
16. Delivery
of Property upon Request or Termination. Upon
request by Employer, and in any event at the end of the Term of Employment,
Employee will promptly deliver to Employer all property belonging to Employer or
its parent or other affiliated companies, including without limitation all
Confidential Information, then in Employee's possession or control.
17. Headings. The
section and paragraph headings and captions in this Agreement have been inserted
for convenience of reference only and shall not affect in any way the meaning or
interpretation of any provisions of this Agreement.
18. Notices. Except
as otherwise may be provided herein, all notices, claims, certificates,
requests, demands, and other communications hereunder shall be in writing and
shall be deemed to have been duly given when hand delivered or sent by facsimile
transmission by one party to the other, or when deposited by one party with the
United States Postal Service, postage prepaid; and, if directed to Employer,
delivered or addressed to its Chief Financial Officer at its principal executive
offices, and if to Employee, delivered or addressed to Employee at Employee's
address in Employer's records or at such other address as Employee shall specify
from time to time in a notice given to Employer as provided above.
19. Counterparts. This
Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
20. Entire
Agreement. This
Agreement (including all schedules, exhibits, and other documents attached
hereto, and all documents incorporated herein by reference) contains the entire
agreement of the parties with respect to the transactions described herein and
supersedes any and all other oral or written agreement(s) heretofore made, and
there are no representations or inducements by or to, or any agreements,
promises, warranties, covenants or undertakings among, any of the parties hereto
that are not expressly set forth in this Agreement.
9
IN
WITNESS WHEREOF,
Employer has caused this Agreement to be executed by its duly authorized officer
in pursuance of authority duly given by its Board of Directors, and Employee has
set hereunto Employee's hand and adopted as Employee's seal the typewritten word
"SEAL" appearing beside Employee's name, all as of the day and year first above
written.
|
SUMMIT
FINANCIAL CORPORATION | |
|
By:
/s/
J. Xxxxxxxx
Xxxxxx | |
|
Attested:
|
Its:
President |
|
/s/
Xxxxxx X. Xxxxxxxxxx |
|
| Assistant Secretary |
EMPLOYEE |
|
(SEAL) |
/s/
Xxxxx X. Xxxxxxxx |
|
|
Xxxxx X. Xxxxxxxx |
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