STATE OF NORTH CAROLINA COUNTY OF WAKE
Exhibit
10.1
STATE
OF NORTH CAROLINA
COUNTY
OF WAKE
EXECUTIVE
CONSULTATION,
SEPARATION
FROM SERVICE AND
DEATH
BENEFIT AGREEMENT
THIS EXECUTIVE CONSULTATION,
SEPARATION FROM SERVICE AND DEATH BENEFIT AGREEMENT (“Agreement”) is made
and entered into this 28th day of February, 2008, to be effective as of the 1st
day of January, 2005, by and between FIRST-CITIZENS BANK & TRUST
COMPANY, a North Carolina banking corporation with its principal office
in Raleigh, Wake County, North Carolina (“Company”) and XXXXX X. HOLDING
(“Executive”);
W
I T N E S S E T H
WHEREAS, Executive is
an employee of Company who has provided guidance, leadership and direction in
the growth, management and development of Company and has learned trade secrets,
confidential procedures and information, and technical and sensitive plans of
Company; and
WHEREAS, Company
desires to limit Executive’s availability to other employers or entities which
are in competition with Company following Executive’s separation from service
with Company; and
WHEREAS, Company has
offered to Executive a non-competition arrangement and a consultation
arrangement together with a death benefit arrangement for Executive’s designated
beneficiary or estate, as applicable, and the parties hereto have reached an
agreement concerning those arrangements and other matters contained herein and
desire to set forth the terms and conditions thereof.
NOW, THEREFORE, for and
in consideration of the mutual promises and undertakings herein set forth,
Executive and Company hereby agree as follows:
1. Administration
of the Agreement. The Agreement
shall be administered by the Board of Directors of the Company or its delegate
(the “Administrator”). Subject to the provisions of the Agreement,
the Administrator shall have full and final authority in its discretion to take
any action with respect to the Agreement including, without limitation, the
authority to (i) determine all matters relating to the payments; (ii) establish,
amend and rescind rules and regulations for the administration of the Agreement;
and (iii) construe and interpret the Agreement, to interpret rules and
regulations for administering the Agreement and to make all other determinations
deemed necessary or advisable for administering the Agreement. Except
to the extent otherwise required under Section 409A of the Internal Revenue Code
of 1986, as amended (“Code”), the Administrator shall have the authority, in its
sole discretion, to accelerate the date that any Consultation Payments or
Separation Payments which were not otherwise vested or earned shall become
vested or earned in whole or in part without any obligation to accelerate such
date with respect to any other employee. The Administrator also may
in its sole discretion determine that Executive’s rights or payments under the
Agreement shall be subject to reduction, cancellation, forfeiture or recoupment
due to conduct by Executive that is determined by the Administrator to be
detrimental to the business or reputation of the Company, including, without
limitation, upon termination of employment for cause; violation of policies of
the Company; or breach of non-solicitation, noncompetition, confidentiality or
other restrictive covenants that apply to the Executive. In addition
to action by meeting in accordance with applicable laws, any action of the
Administrator with respect to the Agreement may be taken by a written instrument
signed by the Administrator (including, where the Board or a committee serves as
the Administrator, by written consent signed by all of the members of the Board,
or all of the members of a committee, and any such action so taken by written
consent shall be as fully effective as if it had been taken by a majority of the
members at a meeting duly held and called). No individual shall be
liable while acting as Administrator for any action or determination made in
good faith with respect to the Agreement, and any such individual shall be
entitled to indemnification and reimbursement in the manner provided in the
Company’s certificate of incorporation and bylaws and/or under applicable
law.
2.
Consultation
Payments. Following
Executive’s separation from service with Company on or after his Vesting Date
(as defined in Section 7), Company shall pay to Executive the sum of ELEVEN
THOUSAND FOUR HUNDRED TWO and 35/100 Dollars ($11,402.35) per month, beginning
six months and one week after Executive’s date of separation for a period of ten
(10) years, or until Executive’s death, whichever first occurs (“Consultation
Payments”). If Executive should die during the ten-year period during
which Consultation Payments are being made under this Paragraph 2, then those
payments shall terminate.
The monthly
Consultation Payments shall be paid for and in consideration of Executive’s
support, sponsorship, advisory and other services provided to Company
(“Consultation Services”), such sum to be payable to Executive whether or not
Executive’s Consultation Services are utilized in said month by Company. Except
as set forth below, Consultation Payments hereunder shall be payable each month
without deductions and Executive agrees to be solely responsible for the payment
of all income and other taxes out of said funds and all Social Security,
self-employment and any other taxes or assessments, if any, applicable on said
compensation.
For and in
consideration of said monthly Consultation Payments to Executive, Executive will
provide Consultation Services as an independent contractor to Company, as and
when Company may request, which services may be provided with respect to all
phases of Company’s business and particularly those phases in which Executive
has particular expertise and knowledge. Executive’s services shall be limited to
those of an independent contractor, shall not be on a day-to-day regularly
scheduled operational basis and shall be provided only when Executive is
reasonably available and willing, which willingness will not be unreasonably
withheld.
Effective as
of Executive’s date of separation, Executive and Company agree that Executive
shall be, under the terms of this Agreement, an independent contractor, and
Executive agrees that Executive’s rights and privileges and obligations are only
as provided in this Agreement as to matters covered
herein. Notwithstanding the foregoing, if Company determines that the
Consultation Payments are compensation for other than payments for Consultation
Services, and such payments shall be subject to any and all applicable
withholding, Social Security, employment, income and other taxes or assessments,
if any, under applicable tax law, the said payments shall be subject to the
required withholdings.
3. Separation
Payments. Following
Executive’s separation from service with Company on or after his Vesting Date
(as defined in Section 7), Company shall pay to Executive the sum of THIRTY-FOUR
THOUSAND TWO HUNDRED SEVEN and 04/100 Dollars ($34,207.04) per month, beginning
six months and one week after Executive’s date of separation for a period of ten
(10) years, or until Executive’s death, whichever first occurs (the “Separation
Payments”). Such payments shall be subject to any and all applicable
withholding, Social Security, employment, income and other taxes or assessments,
if any, under the applicable tax law. If Executive should die during
the ten-year period during which payments are being made under this Paragraph 3,
then those payments shall terminate and future payments, if any, shall be made
to Executive’s designated beneficiary(ies) or Executive’s estate in accordance
with the provisions of Paragraph 4 of this Agreement.
4. Continuation
of Payments. Following
Executive’s death during the original ten-year period of payments, under
Paragraph 3 above, the sum of FORTY-FIVE THOUSAND SIX HUNDRED NINE and 39/100
Dollars ($45,609.39) per month shall be paid to such individual or individuals
as Executive shall have designated in writing as his beneficiary(ies) as
provided in Paragraph 13 below or, in the absence of such designation, to
Executive’s estate, as applicable, beginning the first calendar month following
the date of Executive’s death and continuing thereafter until the expiration of
said original ten-year period. Once the monthly payments have begun to
Executive, whether paid by Company or as otherwise provided herein, the maximum
payment period under this Agreement shall be ten (10) years.
5. Covenant
Not To Compete. For and in consideration of the monthly
payments described in Paragraphs 2 and 3, Executive agrees not to become an
officer or employee of, provide any consultation to, nor participate in any
manner with, any other entity of any type or description involved in any major
element of business which Company is performing at the time of Executive’s
separation from service with the Company, nor will Executive perform or seek to
perform any consultation or other type of work or service with any other firm,
person or entity, directly or indirectly, in any such business which competes
with Company, whether done directly or indirectly, in ownership, consultation,
employment or otherwise. Executive agrees not to reveal to outside sources,
without the consent of Company, any matters, the revealing of which could, in
any manner, adversely affect or disclose Company’s business or any part thereof,
unless required by law to do so. This Covenant Not To Compete by
Executive is limited to the geographic area consisting of each county or like
jurisdictional entity in which either Company or any banking or investment
entity owned directly or indirectly by the parent of Company shall maintain a
banking or other business office at the time of Executive’s separation from
service, shall exist for and during the term of all payments to be made under
Paragraphs 2 and 3, whether made directly by Company or as otherwise provided
herein, and shall not prevent Executive from purchasing or acquiring, as an
investor only, a financial interest of less than 5% in a business or other
entity which is in competition with Company.
Executive
acknowledges that the remedy at law for breach of Executive’s Covenant Not To
Compete will be inadequate and that Company shall be entitled to injunctive
relief as to any violation thereof; however, nothing herein shall be construed
as prohibiting Company from pursuing any other remedies available to it, in
addition to injunctive relief, whether at law or in equity, including the
recovery of damages. In the event Executive shall breach any condition of
Executive’s Covenant Not To Compete, then Executive’s right to any of the
payments becoming due under Paragraphs 2 and 3 of this Agreement after the date
of such breach shall be forever forfeited and the right of Executive’s
designated beneficiary(ies) or Executive’s estate to any payments under this
Agreement shall likewise be forever forfeited. This forfeiture is in addition to
and not in lieu of any of the above-described remedies of Company and shall be
in addition to any injunctive or other relief as described herein. Executive
further acknowledges that any breach of Executive’s Covenant Not To Compete
shall be deemed a material breach of this Agreement.
6.
Death
Benefits. In the event
Executive dies while employed by Company or within six months and one week after
Executive’s date of separation from service with Company due to retirement,
Company will pay the sum of FORTY-FIVE THOUSAND SIX HUNDRED NINE and
39/100 dollars ($45,609.39) per month for a period of ten (10) years, to such
individual or individuals as Executive shall have designated in writing as his
beneficiary(ies) as provided in Paragraph 13 below or, in the absence of such
designation, to Executive’s estate, as applicable. The first payment
shall be made not later than two months following Executive’s
death.
7. Forfeiture
of Benefits. This Agreement is
subject to termination by Company at any time and without stated cause prior to
the 1st day of
January, 2011 or such earlier date as the Executive and Company may mutually
agree (the “Vesting Date”). In the event Company shall terminate this
Agreement prior to the Vesting Date, Executive shall forfeit all rights to
receive any payment provided for herein. Likewise, in the event
Executive’s employment is terminated prior to his Vesting Date, either
voluntarily or involuntarily, for reasons other than his death, Executive shall
forfeit all rights to receive any payment provided for
herein. Executive acknowledges and agrees that, prior to the earlier
of his death or Vesting Date, nothing contained herein shall be construed as
conferring upon Executive any vested benefits or any vested rights to receive
any payment provided for herein.
8.
Claims
Procedure. Any claim for
benefits under this Agreement shall be made in writing to Company. If any claim
for benefits under this Agreement is wholly or partially denied, notice of the
decision shall be furnished to the claimant within a reasonable period of time,
not to exceed 90 days after receipt of the claim by Company, unless special
circumstances require an extension of time for processing the claim. If such an
extension of time is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 90-day period.
In no event shall such extension exceed the period of 90 days from the end of
such initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date on which the
administrator expects to render a decision.
Company shall
provide every claimant who is denied a claim for benefits written notice setting
forth, in a manner calculated to be understood by the claimant, the following:
(i) specific reasons for the denial; (ii) specific reference to pertinent
provisions upon which the denial is based; (iii) a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (iv) an
explanation of the Agreement’s claims review procedure as set forth
below.
The claimant
may appeal the denial of his claim to Company for a full and fair review. A
claimant (or his duly authorized representative) may request a review by filing
a written application for review with the Administrator at any time within 60
days after receipt by the claimant of written notice of the denial of his claim.
The claimant or his duly authorized representative may request, upon written
application to Company, to review pertinent documents, and submit issues and
comments in writing.
The decision
on review shall be made by the Administrator, who may, in its or his/her
discretion, hold a hearing on the denied claim; the Administrator shall make
this decision promptly, and not later than 60 days after Company receives the
request for review, unless special circumstances require extension of time for
processing, in which case a decision shall be rendered as soon as possible, but
not later than 120 days after receipt of the request for review. If such an
extension of time for review is required, written notice of the extension
(including the special circumstances requiring the extension of time) shall be
furnished to the claimant prior to the commencement of the extension. In the
event that the decision on review is not furnished within the time period set
forth in this paragraph, the claim shall be deemed denied on
review.
The decision
on review shall be in writing and shall include reasons for the decision,
written in a manner calculated to be understood by the claimant, and specific
references to the pertinent provisions in the relevant documents on which the
decision is based.
9.
Assignment
of Rights; Spendthrift Clause. Neither Executive nor
Executive’s estate, or any designated beneficiary shall have any right to sell,
assign, transfer or otherwise convey the right to receive any payment hereunder.
To the extent permitted by law, no benefits payable under this Agreement shall
be subject to the claim of any creditor of Executive or Executive’s estate or
any designated beneficiary, or to any legal process by any creditor of any such
person.
10. Unfunded
Plan. Executive and
Company do not intend that the amounts payable hereunder be held by Company in
trust or as a segregated fund for Executive or any other person entitled to
payments hereunder. The benefits provided under this Agreement shall be payable
solely from the general assets of Company, and neither Executive nor any other
person entitled to payments hereunder shall have any interest in any assets of
Company by virtue of this Agreement. Company’s obligation under this Agreement
shall be merely that of an unfunded and unsecured promise of Company to pay
money in the future. To the extent that this Agreement may be deemed to be a
“pension plan,” Executive and Company intend that it be unfunded for federal
income tax purposes, as well as for Title I of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).
11. Payments
and Funding. Any payments
under this Agreement shall be independent of, and in addition to, those under
any other plan, program or agreement which may be in effect between the parties
hereto, or any other compensation payable to Executive or Executive’s
designee by Company. This Agreement shall not be construed as a contract of
employment nor does it restrict the right of Company to discharge Executive at
will or the right of Executive to terminate said Executive’s employment at
will.
Company may,
in its sole discretion, purchase an insurance policy on the life of Executive to
fund or assist in the funding of this Agreement. Executive agrees to promptly
supply to Company and its selected or prospective insurance carrier, upon
request, any and all information requested, in order to enable the insurance
carrier to evaluate the risks involved, in providing the insurance requested by
Company. Any and all rights to any and all benefits under such insurance policy
on the life of Executive shall be solely the property of Company and all
proceeds of such policy shall be payable by the insurer solely to Company, as
owner of such policy. Executive specifically waives any rights in any insurance
policy on Executive’s life owned by Company pursuant to this Agreement. Such policy shall not
serve in any way as security to Executive for Company’s performance under this
Agreement. The rights accruing to Executive or any designee hereunder shall be
solely those of an unsecured creditor of Company and shall be subordinate to the
rights of the depositors of Company.
12. Survivor
Annuities and QDROs. Nothing contained
in this Agreement is intended to give nor shall give any spouse or former spouse
of Executive nor any other person any right to benefits under this Agreement by
virtue of sections 401(a)(11) and 417 of the Code (relating to qualified
preretirement survivor annuities and qualified joint and survivor annuities) or
Code Sections 401(a)(13)(B) and 414(p) (relating to qualified domestic relations
orders).
13. Designation
of Beneficiary(ies). In order to
designate one or more beneficiaries as described in Paragraph 4 or 6 above,
Executive shall file a written designation with Company in the form attached as
Exhibit A to this Agreement. Each such designation shall specify, by name(s),
the person(s) to whom any amounts payable under this Agreement shall be paid
following Executive’s death. From time to time, Executive may change or revoke a
beneficiary designation without the consent of the beneficiary(ies) by filing a
new beneficiary designation form with Company, and the filing of a new
designation form automatically shall revoke any and all designation forms
previously filed with Company. A beneficiary designation form not properly filed
with Company prior to Executive’s death shall be of no force or effect under
this Agreement.
Subject to
reasonable restrictions imposed by Company and to Company’s right to refuse to
accept such a designation for reasons satisfactory to it, Executive may
designate more than one beneficiary and/or alternative or contingent
beneficiaries, in which case Executive’s designation form shall specify the
relative shares and terms and conditions upon which amounts shall be paid to
such multiple or alternative or contingent beneficiaries.
If, at the
time of Executive’s death, (i) no beneficiary designation is on file with
Company, (ii) no beneficiary designated by Executive has survived Executive, or
(iii) there are other circumstances not covered by the beneficiary designation
form on file with Company, then Executive’s estate conclusively shall be deemed
to be the beneficiary designated to receive any amounts then remaining payable
to Executive under this Agreement.
In making all
determinations regarding Executive’s beneficiary, the latest designation form
filed by Executive with Company shall control, and all changes in circumstances
that occur after the filing of that designation shall be ignored. For example,
if Executive’s spouse is designated as beneficiary in the latest designation
filed by Executive but, thereafter, is divorced from Executive, such designation
shall remain valid until and unless Executive files a later beneficiary
designation form with Company naming a different beneficiary.
Any check for
a payment under this Agreement that is issued on or before the date of
Executive’s death shall remain payable to Executive and shall be handled
accordingly, whether or not the check actually is received by Executive prior to
death. Any check issued after the date of Executive’s death shall be the
property of Executive’s beneficiary(ies) determined in accordance with this
Paragraph 13.
14. Suicide. In the event Executive
commits suicide within two years of the date of this Agreement, all payments
provided for herein to be paid to Executive’s designated beneficiary or
Executive’s estate shall be forfeited.
15. Binding
Effect. This
Agreement shall be binding upon Executive, his heirs, personal representatives
and assigns, and upon Company, its successors and assigns.
16. Amendment
of Agreement.
This Agreement may not be altered, amended or revoked except by a written
agreement signed by Company and Executive; provided, however, that if Company
determines to its reasonable satisfaction that an alteration or amendment of the
Agreement is necessary or advisable in order for the Agreement to comply with
the Code, the Treasury Regulations, or any other applicable tax authority
(collectively “Tax Law”), then, upon written notice to Executive, Company may
unilaterally amend the Agreement in such manner and to such an extent as it
reasonably considers necessary or advisable in order to comply with the Tax Law.
Nothing in this Paragraph 16 shall be deemed to limit Company’s right to
terminate this Agreement at any time and without stated cause as provided in
Paragraph 7.
17. Compliance
with Code Section 409A. Notwithstanding
any other provision in the Agreement to the contrary, if and to the extent that
Code Section 409A is deemed to apply to the Agreement, it is the general
intention of Company that the Agreement shall, to the extent practicable, comply
with Code Section 409A, and the Agreement shall, to the extent practicable, be
construed in accordance therewith. Without in any way limiting the
effect of the foregoing, in the event that Code Section 409A requires that any
special terms, provisions or conditions be included in the Agreement, then such
terms, provisions and conditions shall, to the extent practicable, be deemed to
be made a part of the Agreement, as applicable. Further, in the event
that the Agreement shall be deemed not to comply with Code Section 409A, then
neither the Company, the Administrator nor its or their designees or agents
shall be liable to any Executive or other person for actions, decisions or
determinations made in good faith.
18. Interpretation. Where appropriate
in this Agreement, words used in the singular shall include the plural and words
used in the masculine shall include the feminine.
19. Invalid
Provision. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were not contained
herein.
20. Governing
Law. This
Agreement shall be construed and enforced in accordance with and governed by the
laws of the State of North Carolina.
21. Entire
Agreement. This Agreement
contains the entire agreement and understanding of the parties with respect to
the subject matter hereof and supersedes and replaces any and all prior
agreements and understandings, whether oral or written, with respect to the
subject matter hereof.
IN TESTIMONY WHEREOF, Company
has caused this Agreement to be executed in its corporate name by its Executive
Vice President, and attested by its Assistant Secretary, all by the authority of
its Board of Directors duly given, and Executive has hereunto set his hand and
adopted as his seal the typewritten word “SEAL” appearing beside his name, as of
the day and year first above written.
FIRST-CITIZENS
BANK & TRUST COMPANY
By: /s/ XXX X.
XXXXX
ATTEST:
/s/ XXX
XXXXXXXX
Assistant
Secretary
/s/ XXXXX X.
HOLDING (SEAL)
Executive
DESIGNATION
OF BENEFICIARY
Pursuant to
the terms of the Executive Consultation, Separation from Service and Death
Benefit Agreement, effective as of ______________, between me and FIRST-CITIZENS
BANK & TRUST COMPANY, I hereby designate the following beneficiary(ies) to
receive any payments which may be due under such Agreement after my
death.
Primary Beneficiary(ies): (If
more than one is listed, it is assumed that Executive intends for all Primary
Beneficiaries to share in payments as co-beneficiaries in the percentages
listed, or equally if no percentages are listed, rather than as alternative or
contingent beneficiaries or in any order of listing or otherwise.)
____________________________________
_________________ %
____________________________________
_________________ %
____________________________________
_________________ %
Contingent Beneficiary(ies):
(If more than one is listed, it is assumed that, if no Primary
Beneficiary shall survive Executive, Executive intends for all Contingent
Beneficiaries to share in payments as co-contingent beneficiaries in the
percentages listed, or equally if no percentages are listed, rather than in the
order in which they are listed or otherwise. If Executive intends for one or
more Contingent Beneficiary(ies) to receive payments in any particular order or
to the exclusion of any other(s) listed, that should be clearly indicated
below.)
____________________________________
_________________ %
____________________________________
_________________ %
____________________________________
_________________ %
This
designation hereby revokes any prior designation which may have been in
effect.
Date:
_________________________ ______________________
Executive
______________________________
Witness
Acknowledged
by:
Title:
Date: ,
20
