Exhibit 10.9
Form of Amended and Restated Employment Agreement between Tidelands Bancshares,
Inc. and Xxxxxx X. Xxxxxxxx
Exhibit 10.9
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") dated as
of February ___, 2003, is made by and between Tidelands Bancshares, Inc., a
South Carolina corporation (the "Employer" or the "Company"), which is the
holding company for Tidelands Bank (Proposed), a proposed South Carolina state
bank (the "Bank"), and Xxxxxx X. Xxxxxxxx, Xx., an individual resident of South
Carolina (the "Executive").
Upon execution by both parties hereto, this Agreement shall supercede and
replace any previous employment agreement, including the Employment Agreement
dated as of April 8, 2002 (the "2002 Employment Agreement"), between the
Employer and the Employee, pursuant to which Employer employed the Employee as
its Senior Vice President and Chief Lending Officer, and any previous employment
agreement, including the 2002 Employment Agreement, between the parties shall be
of no further force and effect.
The Employer is in the process of organizing the Bank, and the Executive
has agreed to serve as Senior Vice President and Senior Lending Officer of the
Bank and the Company. Upon organization of the Bank, the Employer and the
Executive contemplate that this Agreement will be assigned by the Employer to
the Bank and that the Bank will assume the duties of the Company hereunder
(except pursuant to Section 3). Following any such assignment, the term
"Employer" as used herein from time to time shall refer to the Bank.
The Employer desires to provide for the employment of the Executive in a
manner which will reinforce and encourage the dedication of the Executive to the
Bank and promote the best interests of the Bank and its shareholders. The
Executive is willing to serve the Employer on the terms and conditions herein
provided. Certain terms used in this Agreement are defined in Section 17 hereof.
In consideration of the foregoing, the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the Executive
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shall serve the Employer, as Senior Vice President and Senior Lending Officer of
the Bank and as Senior Vice President of the Company upon the terms and
conditions set forth herein. The Executive shall have such authority and
responsibilities consistent with his position as are set forth in the Company's
or the Bank's Bylaws or assigned by the Company's or the Bank's Board of
Directors (collectively, the "Board") from time to time. The Executive shall
devote his full business time, attention, skill and efforts to the performance
of his duties hereunder, except during periods of illness or periods of vacation
and leaves of absence consistent with Bank policy. The Executive may devote
reasonable periods to service as a director or advisor to other organizations,
to charitable and community activities, and to managing his personal
investments, provided that such activities do not materially interfere with the
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performance of his duties hereunder and are not in conflict or competitive with,
or adverse to, the interests of the Company or the Bank.
2. Term. Unless earlier terminated as provided herein, the Executive's
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employment under this Agreement shall commence on the date hereof and be for a
term (the "Term") of three years. At the end of each day of the Term, the Term
shall be extended for an additional day so that the remaining term shall
continue to be three years; provided that the Executive or the Bank may at any
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time, by written notice, fix the Term to a finite term of three years commencing
with the date of the notice. Notwithstanding the foregoing, the Term of
employment hereunder will end on the date that the Executive attains the
retirement age, if any, specified in the Bylaws of the Bank for directors of the
Bank.
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3. Compensation and Benefits.
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(a) Starting , 2003, the Employer shall pay the Executive an
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initial annual base salary of $67,500, plus family yearly medical, dental,
vision and disability insurance premium. On the date that the Bank opens for
business, the annual base salary will be increased to $95,000. The Board (or an
appropriate committee of the Board) shall review the Executive's performance and
salary at least annually and may increase the Executive's base salary if it
determines in its sole discretion that an additional increase is appropriate.
(b) The Executive shall participate in all retirement, welfare and
other benefit plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of employees that includes
senior executives of the Employer.
(c) The Employer shall provide the Executive with a term life
insurance policy providing for death benefits totaling $250,000 payable to the
Executive's spouse and heirs and $250,000 payable to the Employer, and the
Executive shall cooperate with the Employer in the securing and maintenance of
such policy. If Executive is taxed by state or federal authorities with respect
to Employer's payment of the key man life insurance policy, Executive's
compensation payable hereunder shall be increased, on a tax gross-up basis, so
as to reimburse the Executive for the additional tax payable by the Executive as
a result of Employer's payment of the key man life insurance premiums taking
into account all taxes payable by the Executive with respect to such tax
gross-up payments hereunder, so that the Executive shall be, after payment of
all taxes, in the same financial position as if no taxes with respect to the key
man life insurance policy had been imposed upon him.
(d) The Employer shall provide the Executive with an automobile
allowance with a cost not to exceed $500 per month, with prior approval of the
executive committee of the Board. Until the Employer provides this automobile
allowance, the Employer will reimburse the Executive for the use of his personal
automobile at the IRS legal mileage rate.
(e) In addition, with prior approval of, and at a time deemed
appropriate by, the executive committee of the Board, the Employer shall obtain
a membership in and pay the initiation fee for and the dues pertaining to an
area country club and shall designate the Executive as the authorized user of
such membership for so long as the Executive remains the Senior Vice President
and Senior Lending Officer of the Bank and as Senior Vice President of the
Company and this Agreement remains in force.
(f) The Employer shall reimburse the Executive for reasonable travel
and other expenses related to the Executive's duties which are incurred and
accounted for in accordance with the normal practices of the Employer.
4. Termination.
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(a) The Executive's employment under this Agreement may be terminated
prior to the end of the Term only as follows, and the effect of such termination
shall be as set forth in Sections 4(b) through 4(j):
(i) upon the death of the Executive;
(ii) upon the disability of the Executive for a period of 180
days which, in the opinion of the Board of Directors, renders him
unable to perform the essential functions of his job and for which
reasonable accommodation is unavailable. For purposes of this
Agreement, a "disability" is defined as a physical or mental
impairment that substantially limits one or more major life
activities, and a "reasonable accommodation" is one that does not
impose an undue hardship on the Employer;
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(iii) by the Employer for Cause upon delivery of a Notice of
Termination to the Executive;
(iv) by the Executive for Good Reason upon delivery of a Notice
of Termination to the Employer within a 90-day period beginning on the
30th day after the occurrence of a Change in Control or within a
90-day period beginning on the one year anniversary of the occurrence
of a Change in Control;
(v) by the Employer if its effort to organize the Bank is
abandoned;
(vi) by the Employer without Cause upon delivery of a Notice of
Termination; and
(vii) by the Executive effective upon the 30th day after
delivery of a Notice of Termination.
(b) If the Executive's employment is terminated because of the
Executive's death, the Executive's estate shall receive any sums due him as base
salary and reimbursement of expenses through the end of the month during which
death occurred, plus any bonus which may have been earned or accrued through the
date of death (including any amounts awarded for previous years but which were
not yet vested) and a pro rata share of any bonus with respect to the current
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fiscal year which may have been earned as of the date of the Executive's death.
(c) During the period of any incapacity leading up to the termination
of the Executive's employment as a result of disability, the Employer shall
continue to pay the Executive his full base salary at the rate then in effect
and all perquisites and other benefits (other than any bonus) until the
Executive becomes eligible for benefits under any long-term disability plan or
insurance program maintained by the Employer, provided that the amount of any
such payments to the Executive shall be reduced by the sum of the amounts, if
any, payable to the Executive for the same period under any disability benefit
or pension plan of the Employer or any of its subsidiaries. Furthermore, the
Executive shall receive any bonus which may have been earned or accrued through
the date of incapacity (including any amounts awarded for previous years but
which were not yet vested) and a pro rata share of any bonus with respect to the
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current fiscal year which may have been earned as of the date of the Executive's
incapacity.
(d) If the Executive's employment is terminated for Cause as provided
above, or if the Executive resigns (except for a termination of employment
pursuant to Section 4(e)), the Executive shall receive any sums due him as base
salary and reimbursement of expenses through the date of such termination.
(e) If the Executive's employment is terminated (1) by the Executive
pursuant to clause (iv) of Section 4(a) or (2) by the Employer pursuant to
clause (vi) of Section 4(a) following a Change in Control, then in addition to
other rights and remedies available in law or equity, the Executive shall be
entitled to the following:
(i) the Employer shall pay the Executive in cash within
fifteen days of the Termination Date severance compensation in
an amount equal to 100% of his then current monthly base salary each
month for a term equal to the remaining Term under this Agreement,
plus any bonus which may have been earned or accrued through the
Termination Date (including any amounts awarded for previous years but
which were not yet vested) and a pro rata share of any bonus with
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respect to the current fiscal year which may have been earned as of
the Termination Date; and
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(ii) for a period of one year following the Termination Date
(the "Continuation Period"), the Employer shall at its expense
continue on behalf of the Executive and his dependents and
beneficiaries the life insurance, disability, medical, dental, and
hospitalization benefits provided (x) to the Executive at any time
during the 90-day period prior to the Change in Control or at any time
thereafter or (y) to other similarly situated executives whocontinue
in the employ of the Employer during the Continuation Period. Such
coverage and benefits (including deductibles and costs) shall be no
less favorable to the Executive and his dependents and beneficiaries
than the most favorable of such coverages and benefits during any of
the periods referred to above. The Employer's obligation hereunder
with respect to the foregoing benefits shall be limited to the extent
that the Executive obtains any such benefits pursuant to a subsequent
employer's benefit plans, in which case the Employer may reduce the
coverage of any benefits it is required to provide the Executive
hereunder as long as the aggregate coverages and benefits of the
combined benefit plans is no less favorable to the Executive than the
coverages and benefits required to be provided hereunder. This
subsection (ii) shall not be interpreted so as to limit any benefits
to which the Executive or his dependents or beneficiaries may be
entitled under any of the Employer's employee benefit plans, programs,
or practices following the Executive's termination of employment,
including, without limitation, retiree medical and life insurance
benefits.
(f) If the Executive's employment is terminated pursuant to clause (v)
of Section 4(a), the Employer shall pay to the Executive severance compensation
in an amount equal to any sums due him as base salary and reimbursement of
expenses through the date of termination, but shall not be obligated to pay any
portion of any bonus.
(g) If the Employer terminates the Executive's employment pursuant to
clause (vi) of Section 4(a) before a Change in Control, the Employer shall pay
to the Executive severance compensation in an amount equal to 100% of his then
current monthly base salary each month the remaining Term under this Agreement,
plus any bonus which may have been earned or accrued through the date of
termination (including any amounts awarded for previous years but which were not
yet vested) and a pro rata share of any bonus with respect to the current fiscal
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year which may have been earned as of the date of the Executive's termination.
(h) With the exceptions of the provisions of this Section 4, and the
express terms of any benefit plan under which the Executive is a participant, it
is agreed that, upon termination of the Executive's employment, the Employer
shall have no obligation to the Executive for, and the Executive waives and
relinquishes, any further compensation or benefits (exclusive of COBRA
benefits). At the time of termination of employment, the Employer and the
Executive shall enter into a mutually satisfactory form of release acknowledging
such remaining obligations and discharging both parties, as well as the
Employer's officers, directors and employees with respect to their actions for
or on behalf of the Employer, from any other claims or obligations arising out
of or in connection with the Executive's employment by the Employer, including
the circumstances of such termination.
(i) In the event that the Executive's employment is terminated for any
reason, the Executive shall (and does hereby) tender his resignation as a
director of the Company, the Bank, and any subsidiary, effective as of the date
of termination.
(j) The parties intend that the severance payments and other
compensation provided for herein are reasonable compensation for the Executive's
services to the Employer and shall not constitute "excess parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder. In the event that the Employer's independent accountants
acting as auditors for the Employer on the date of a Change in Control determine
that the payments provided for herein constitute "excess parachute payments,"
then the compensation payable hereunder shall be increased, on a tax gross-up
basis, so as
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to reimburse the Executive for the tax payable by the Executive, pursuant to
Section 4999 of the Internal Revenue Code, on such "excess parachute payments,"
taking into account all taxes payable by the Executive with respect to such tax
gross-up payments hereunder, so that the Executive shall be, after payment of
all taxes, in the same financial position as if no taxes under Section 4999 had
been imposed upon him.
5. Ownership of Work Product. The Employer shall own all Work Product
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arising during the course of the Executive's employment (prior, present or
future). For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, and other intellectual property rights in any
programming, documentation, technology or other work product that relates to the
Employer, its business or its customers and that employee conceives, develops,
or delivers to the Employer at any time during his employment, during or outside
normal working hours, in or away from the facilities of the Employer, and
whether or not requested by the Employer. If the Work Product contains any
materials, programming or intellectual property rights that the Executive
conceived or developed prior to, and independent of, the Executive's work for
the Employer, the Executive agrees to point out the pre-existing items to the
Employer and the Executive grants the Employer a worldwide, unrestricted,
royalty-free right, including the right to sublicense such items. The Executive
agrees to take such actions and execute such further acknowledgments and
assignments as the Employer may reasonably request to give effect to this
provision.
6. Protection of Trade Secrets. The Executive agrees to maintain in strict
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confidence and, except as necessary to perform his duties for the Employer, the
Executive agrees not to use or disclose any Trade Secrets of the Employer during
or after his employment. "Trade Secret" means information, including a formula,
pattern, compilation, program, device, method, technique, process, drawing, cost
data or customer list, that: (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use; and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
7. Protection of Other Confidential Information. In addition, the Executive
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agrees to maintain in strict confidence and, except as necessary to perform his
duties for the Employer, not to use or disclose any Confidential Business
Information of the Employer during his employment and for a period of 24 months
following termination of the Executive's employment. "Confidential Business
Information" shall mean any internal, non-public information (other than Trade
Secrets already addressed above) concerning the Employer's financial position
and results of operations (including revenues, assets, net income, etc.); annual
and long-range business plans; product or service plans; marketing plans and
methods; training, educational and administrative manuals; customer and supplier
information and purchase histories; and employee lists. The provisions of
Sections 6 and 7 shall also apply to protect Trade Secrets and Confidential
Business Information of third parties provided to the Employer under an
obligation of secrecy.
8. Return of Materials. The Executive shall surrender to the Employer,
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promptly upon its request and in any event upon termination of the Executive's
employment, all media, documents, notebooks, computer programs, handbooks, data
files, models, samples, price lists, drawings, customer lists, prospect data, or
other material of any nature whatsoever (in tangible or electronic form) in the
Executive's possession or control, including all copies thereof, relating to the
Employer, its business, or its customers. Upon the request of the Employer,
employee shall certify in writing compliance with the foregoing requirement.
9. Restrictive Covenants.
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(a) No Solicitation of Customers. During the Executive's employment
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with the Employer and for a period of 24 months thereafter, the Executive shall
not (except on behalf of or with the prior written consent of the Employer),
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or
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appropriate to or for a Competing Business, or (B) attempt to solicit, divert,
or appropriate to or for a Competing Business, any person or entity that is or
was a customer of the Employer or any of its Affiliates at any time during the
24 months prior to the date of termination and with whom the Executive has had
material contact. This restriction does not apply after a Change in Control.
(b) No Recruitment of Personnel. During the Executive's employment with
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the Employer and for a period of 24 months thereafter, the Executive shall not,
either directly or indirectly, on the Executive's own behalf or in the service
or on behalf of others, (A) solicit, divert, or hire away, or (B) attempt to
solicit, divert, or hire away, to any Competing Business located in the
Territory, any employee of or consultant to the Employer or any of its
Affiliates, regardless of whether the employee or consultant is full-time or
temporary, the employment or engagement is pursuant to written agreement, or the
employment is for a determined period or is at will. This restriction does not
apply after a Change in Control.
(c) Non-Competition Agreement. During the Executive's employment with
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the Employer and for a period of 24 months thereafter, the Executive shall not
(without the prior written consent of the Employer) compete with the Employer or
any of its Affiliates by, directly or indirectly, forming, serving as an
organizer, director or officer of, or consultant to, or acquiring or maintaining
more than a 1% passive investment in, a depository financial institution or
holding company therefor if such depository institution or holding company has
one or more offices or branches located in the Territory. Notwithstanding the
foregoing, the Executive may serve as an officer of or consultant to a
depository institution or holding company therefor even though such institution
operates one or more offices or branches in the Territory, if the Executive's
employment does not directly involve, in whole or in part, the depository
financial institution's or holding company's operations in the Territory. This
restriction does not apply after a Change in Control.
10. Independent Provisions. The provisions in each of the above Sections
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9(a), 9(b), and 9(c) are independent, and the unenforceability of any one
provision shall not affect the enforceability of any other provision.
11. Successors; Binding Agreement. The rights and obligations of this
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Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Employer is a party, or any assignee of
all or substantially all of the Employer's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
12. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
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notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
13. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of South Carolina without
giving effect to the conflict of laws principles thereof. Any action brought by
any party to this Agreement shall be brought and maintained in a court of
competent jurisdiction in State of South Carolina.
14. Non-Waiver. Failure of the Employer to enforce any of the provisions
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of this Agreement or any rights with respect thereto shall in no way be
considered to be a waiver of such provisions or rights, or in any way affect the
validity of this Agreement.
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15. Enforcement. The Executive agrees that in the event of any breach or
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threatened breach by the Executive of any covenant contained in Section 9(a),
9(b), or 9(c) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
would certainly result. Accordingly, an award of legal damages, if without other
relief, would be inadequate to protect the Employer. The Executive, therefore,
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or anticipated breach of any such covenant, and to obtain any other
available legal, equitable, statutory, or contractual relief. Should the
Employer have cause to seek such relief, no bond shall be required from the
Employer, and the Executive shall pay all attorney's fees and court costs which
the Employer may incur to the extent the Employer prevails in its enforcement
action.
16. Saving Clause. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or
unenforceable in such jurisdiction, the remainder of such provision shall not be
thereby affected and shall be given full effect, without regard to the invalid
portion. It is the intention of the parties that, if any court construes any
provision or clause of this Agreement, or any portion thereof, to be illegal,
void, or unenforceable because of the duration of such provision or the area or
matter covered thereby, such court shall reduce the duration, area, or matter of
such provision, and, in its reduced form, such provision shall then be
enforceable and shall be enforced. The Executive and the Employer hereby agree
that they will negotiate in good faith to amend this Agreement from time to time
to modify the terms of Sections 9(a), 9(b), and 9(c), the definition of the term
"Territory," and the definition of the term "Business," to reflect changes in
the Employer's business and affairs so that the scope of the limitations placed
on the Executive's activities by Section 9 accomplishes the parties' intent in
relation to the then current facts and circumstances. Any such amendment shall
be effective only when completed in writing and signed by the Executive and the
Employer.
17. Certain Definitions.
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(a) "Affiliate" shall mean any business entity controlled
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by, controlling or under common control with the Employer.
(b) "Business" shall mean the operation of a depository financial
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institution, including, without limitation, the solicitation and acceptance of
deposits of money and commercial paper, the solicitation and funding of loans
and the provision of other banking services, and any other related business
engaged in by the Employer or any of its Affiliates as of the date of
termination.
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(c) "Cause" shall consist of any of (A) the commission by the
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Executive of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act by the Executive, which is intended to cause, causes or is
reasonably likely to cause material harm to the Employer (including harm to its
business reputation), (B) the indictment of the Executive for the commission or
perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud, (C) the material breach by the Executive of this
Agreement that, if susceptible of cure, remains uncured ten days following
written notice to the Executive of such breach, (D) the receipt of any form of
notice, written or otherwise, that any regulatory agency having jurisdiction
over the Employer intends to institute any form of formal or informal (e.g., a
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memorandum of understanding which relates to the Executive's performance)
regulatory action against the Executive or the Employer or the Employer
(provided that the Board of Directors determines in good faith that the subject
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matter of such action involves acts or omissions by or under the supervision of
the Executive or that termination of the Executive would materially advance the
Employer's compliance with the purpose of the action or would materially assist
the Employer in avoiding or reducing the restrictions or adverse effects to the
Employer related to the regulatory action); (E) the exhibition by the Executive
of a standard of behavior within the scope of his employment that is materially
disruptive to the orderly conduct of the Employer's business operations
(including, without limitation, substance abuse or sexual misconduct) to a level
which, in the Board of Directors' good faith and reasonable judgment, is
materially detrimental to the Employer's best interest, that, if susceptible of
cure remains uncured ten days following written notice to the Executive of such
specific inappropriate behavior; or (F) the failure of the Executive to devote
his full business time and attention to his employment as provided under this
Agreement that, if susceptible of cure, remains uncured 30 days following
written notice to the Executive of such failure.
(d) "Change in Control" shall mean the occurrence during the Term
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of any of the following events, unless such event is a result of a Non-Control
Transaction:
(i) The individuals who, as of the date of this Agreement, are
members of the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least fifty percent of
the Board of Directors of the Company; provided, however, that if the
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election, or nomination for election by the Company's shareholders, of
any new director was approved in advance by a vote of at least fifty
percent of the Incumbent Board, such new director shall, for purposes
of this Agreement, be considered as a member of the Incumbent Board;
provided, further, that no individual shall be considered a member of
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the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Securities Exchange Act
of 1934 (the "Exchange Act"), or other actual or threatened
solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors of the Company (a "Proxy Contest"),
including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest.
(ii) An acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities") by any
"Person" (as the term "person" is used for purposes of Section 13(d)
or 14(d) of the Exchange Act) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of the combined voting power of
the Company's then outstanding Voting Securities; provided, however,
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that in determining whether a Change in Control has occurred, Voting
Securities which are acquired in a Non-Control Acquisition shall not
constitute an acquisition which would cause a Change in Control.
(iii) Consummation of: (i) a merger, consolidation, or
reorganization involving the Company; (ii) a complete liquidation or
dissolution of the Company; or (iii) the sale or other disposition of
all or substantially all of the assets of the Company to any Person
(other than a transfer to a Subsidiary).
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(iv) A notice of an application is filed with the South
Carolina Board of Financial Institutions or the Federal Reserve Board
or any other bank or thrift regulatory approval (or notice of no
disapproval) is granted by the Federal Reserve, the South Carolina
Board of Financial Institutions, the Federal Deposit Insurance
Corporation, or any other regulatory authority for permission to
acquire control of the Company or any of its banking subsidiaries;
provided that if the application is filed in connection with a
transaction which has been approved by the Board, then the Change in
Control shall not be deemed to occur until consummation of the
transaction.
(e) "Competing Business" shall mean any business that, in whole or
in part, is the same or substantially the same as the Business.
(f) "Good Reason" shall mean the occurrence after a Change in
Control of any of the events or conditions described in subsections (i)
through (viii) hereof:
(i) a change in the Executive's status, title, position or
responsibilities (including reporting responsibilities) which, in the
Executive's reasonable judgment, represents an adverse change from his
status, title, position or responsibilities as in effect at any time
within ninety days preceding the date of a Change in Control or at any
time thereafter; the assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are
inconsistent with his status, title, position or responsibilities as
in effect at any time within ninety days preceding the date of a
Change in Control or at any time thereafter; any removal of the
Executive from or failure to reappoint or reelect him to any of such
offices or positions, except in connection with the termination of his
employment for Disability or Cause, as a result of his death, or by
the Executive other than for Good Reason, or any other change in
condition or circumstances that in the Executive's reasonable judgment
makes it materially more difficult for the Executive to carry out the
duties and responsibilities of his office than existed at any time
within ninety days preceding the date of Change in Control or at any
time thereafter;
(ii) a reduction in the Executive's base salary or any failure
to pay the Executive any compensation or benefits to which he is
entitled within five days of the date due;
(iii) the Employer's requiring the Executive to be based at any
place outside a 30-mile radius from the executive offices occupied by
the Executive immediately prior to the Change in Control, except for
reasonably required travel on the Employer's business which is not
materially greater than such travel requirements prior to the Change
in Control;
(iv) the failure by the Employer to (A) continue in effect
(without reduction in benefit level and/or reward opportunities) any
material compensation or employee benefit plan in which the Executive
was participating at any time within ninety days preceding the date of
a Change in Control or at any time thereafter, unless such plan is
replaced with a plan that provides substantially equivalent
compensation or benefits to the Executive, or (B) provide the
Executive with compensation and benefits, in the aggregate, at least
equal (in terms of benefit levels and/or reward opportunities) to
those provided for under each other employee benefit plan, program and
practice in which the Executive was participating at any time within
ninety days preceding the date of a Change in Control or at any time
thereafter;
(v) the insolvency or the filing (by any party, including the
Company or the Bank) of a petition for bankruptcy of the Company or
the Bank, which petition is not dismissed within
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sixty days;
(vi) any material breach by the Employer of any material
provision of this Agreement;
(vii) any purported termination of the Executive's employment
for Cause by the Employer which does not comply with the terms of this
Agreement; or
(viii) the failure of the Employer to obtain an agreement,
satisfactory to the Executive, from any successor or assign to assume
and agree to perform this Agreement, as contemplated in Section 11
hereof.
Any event or condition described in clause (i) through (viii) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (A) was at the request of a third party, or (B) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement,
notwithstanding that it occurred prior to the Change in Control. The Executive's
right to terminate his employment for Good Reason shall not be affected by his
incapacity due to physical or mental illness.
(g) "Non-Control Transaction" shall mean a transaction described
-----------------------
below:
(i) the shareholders of the Company, immediately before such
merger, consolidation or reorganization, own, directly or indirectly,
immediately following such merger, consolidation or reorganization, at
least 50% of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger,
consolidation or reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of the Voting
Securities immediately before such merger, consolidation or
reorganization; and
(ii) immediately following such merger, consolidation or
reorganization, the number of directors on the board of directors of
the Surviving Corporation who were members of the Incumbent Board
shall at least equal the number of directors who were affiliated with
or appointed by the other party to the merger, consolidation or
reorganization.
(h) "Territory" shall mean a radius of ten miles from (i) the main
---------
office of the Employer or (ii) any branch office of the Employer.
(i) "Notice of Termination" shall mean a written notice of
-----------------------
termination from the Employer or the Executive which specifies an
effective date of termination, indicates the specific termination provision
in this Agreement relied upon, and, in the case of a termination for Good
Reason or for Cause, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated.
18. Entire Agreement. This Agreement constitutes the entire agreement
-----------------
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Executive has signed and sealed this Agreement, effective as of the date
first above written.
TIDELANDS BANCSHARES, INC.
ATTEST:
By: By:
------------------------------ ----------------------------------
Name: Xxxxxx X. Coffee Name: Xxxx Xxxxxx
----------------------------
Title: Chairman/ Compensation Committee
EXECUTIVE
-------------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
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