AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment
Agreement (“Agreement”), effective as of the 17th day of September, 2008 (the “Effective Date”), is made
and entered into by Capital Bank (hereinafter the “Bank”), and B. Xxxxx Xxxxxx
(hereinafter “Employee”).
The Bank and Employee entered into an
employment agreement dated April 21, 2004 and entered into an amendment of that
employment agreement dated January 25, 2007 (collectively referred to herein as
the “Prior Agreement”). The Bank and Employee hereby amend and
restate the Prior Agreement in its entirety in part to evidence compliance with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
the regulations thereunder (collectively, “Section 409A”).
The Bank desires to continue to employ
Employee and Employee desires to accept such employment on the terms set forth
below.
In consideration of the mutual promises
set forth below and other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge, the Bank and Employee agree as
follows:
1. Employment. The Bank employs Employee and Employee
accepts employment on the terms and conditions set forth in this
Agreement.
2. Nature
of Employment. Employee shall serve as President and
Chief Executive Officer of Capital Bank Corporation (“CBC”) and Capital Bank and
shall have such responsibilities and authority consistent with each such
position as may be reasonably assigned to him by the Bank or
CBC. Employee shall devote his full time and attention and best
efforts to perform successfully his duties and advance the Bank's and CBC’s
interests. Employee shall abide by the Bank's and CBC’s policies,
procedures, and practices as they may exist from time to
time.
During this employment, Employee shall
have no other employment of any nature whatsoever without the prior consent of
the Bank; provided, however, this Agreement shall not prohibit Employee from
personally owning and dealing in stocks, bonds, securities, real estate,
commodities or other investment properties for his own benefit or those of his
immediate family.
3. Compensation
and Benefits.
(a) Base
Salary. Employee's annual base salary for all
services rendered shall be Three Hundred and Fifty Thousand Dollars ($350,000)
(less any applicable taxes and withholdings), payable in accordance with the
Bank's policies, procedures, and practices as they may exist from time to
time. Employee's salary periodically may be reviewed
and adjusted at
the
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(b) Incentive
Plan. Employee shall be eligible to
participate in the Bank’s Annual Incentive Plan in accordance with the
applicable terms, conditions, and eligibility requirements of that Plan, some of
which are in the plan administrator's discretion, as they may exist from time to
time.
(c) Benefits. Employee may participate in any medical
insurance or other employee benefit plans and programs which may be made
available from time to time to other Bank or CBC employees at Employee's level;
provided, however, that Employee's participation in such benefit plans and
programs is subject to the applicable terms, conditions, and eligibility
requirements of those plans and programs, some of which are within the plan
administrator's discretion, as they may exist from time to
time.
(d) Automobile. Employee shall be entitled to use an
automobile provided by the Bank in accordance with the Bank's policies and
practices as they may exist from time to time.
(e) Expenses. Employee shall be reimbursed by the Bank
for any reasonable and necessary business expenses incurred by Employee on
behalf of the Bank or in connection with Employee's performance of his duties
hereunder. Such reimbursement shall be in accordance with the Bank's
practices or policies as they may exist from time to time.
(f) Vacation. Employee shall be entitled to vacation
in accordance with the Bank's policies. Such vacation shall be taken
in accordance with the Bank's policies and practices as they may exist from time
to time.
4. Termination
of Employment and Post-Termination Compensation.
(a) With
Notice. Either the Bank or Employee may
terminate the employment relationship at any time for any reason or no reason by
giving thirty (30) days' written notice to the other party.
(b) Cause,
Disability, or Death. The Bank may terminate Employee's
employment immediately for “Disability,” “Cause,” or in the event of Employee's
death. For purposes of this Agreement, “Disability” shall mean
Employee's mental or physical inability to perform the essential functions of
his duties satisfactorily for a period of one hundred eighty (180) consecutive
days or one hundred eighty (180) days within a 365-day period as determined by
the Bank in its reasonable discretion and in accordance with applicable
law. For purposes of this Agreement, “Cause” shall mean: (i) any
act of Employee involving dishonesty; (ii) any material violation by
Employee of any Bank rule, regulation, or policy; (iii) gross negligence
committed by Employee; (iv) material failure of Employee to perform his
duties hereunder; or (v) Employee's breach of any of the express
obligations of this Agreement.
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(c) Post-Termination
Compensation.
(i) In the event of termination for Cause,
the Bank's obligation to compensate Employee ceases on the date of termination
except as to the amounts of salary due at that time.
(ii) In the event of a termination for death
or Disability, the Bank shall arrange through insurance or otherwise for payment
to Employee or Employee's estate an amount equal to his then current annual base
salary plus the amount of bonus paid to Employee, if any, in the prior bonus
year prorated by the number of full months in the current bonus year through
date of death or Disability, such payment to be less any applicable taxes and
withholdings and to be paid in a single, lump-sum payment within thirty (30)
days after the date of termination of employment.
(iii) If there has been no Change in Control
and the Bank terminates Employee's employment without Cause or Employee
terminates his employment for Good Reason (as defined below), then Employee upon
his execution of an enforceable general release in a form prepared by the Bank
shall be entitled to (A) receive an amount equal to his then current annual
base salary plus the amount of bonus paid to Employee, if any, in the prior
bonus year (less any applicable taxes and withholdings) payable in substantially
equal amounts over a twelve (12) month period in accordance with the payroll
schedule applicable to Employee immediately prior to the termination of
employment (for purposes of Section 409A, as applicable, each installment
payment shall be considered a separate payment), provided, however, that in the
event that Employee has not accepted subsequent employment at any time during
the 12-month period following his termination with a total annual compensation
package that, in the aggregate is substantially equal to or greater than his
annual salary plus bonus at the time of his termination with the Bank, Employee
shall continue to receive the installment payments in the same amount until the
earlier of the period ending twenty-four (24) months following his termination
(i.e., up to an additional 12 months of payments) or the date he accepts such
subsequent employment; and (B) for the period of time Employee receives
payments pursuant to Section 4(c)(iii)(A), receive reimbursement for COBRA (or
other comparable health insurance) premiums (less the amount Employee would have
paid in premiums had he remained an active employee) that he actually pays to
continue his coverage under the Bank's group health plan or to secure other
comparable health insurance (all such amounts to be reimbursed within
twelve (12) months of the date the expense
is incurred and in accordance with other requirements of Treas. Regs.
§1.409A-3(i)(1)(iv)). Employee must immediately
notify the Bank upon acceptance of any subsequent employment and, in any month
for which he seeks installment payments beyond the twelve (12) month period
following his termination, provide the Bank with verification satisfactory to
the Bank of his employment status and total compensation package. If
Employee fails to do so, then the Bank will be relieved of its obligations to
continue payments under this paragraph. Provided, however, no
installment payments, reimbursements, or other cash payment shall be provided
until the required general release becomes effective. Any payments,
reimbursements, or other
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cash payments delayed pursuant to this
Section shall be paid in a lump sum on the first payroll date following the
effective date of the release.
(d) For purposes of Section 4(c) , Good
Reason shall mean the occurrence of any of the following events or conditions
without Employee's prior written consent and prior to a Change in
Control:
(A) a change in Employee's status, title,
position, or responsibilities (including reporting responsibilities) which
represents a material adverse change from his status, title, position, or
responsibilities in effect immediately prior thereto; the assignment to Employee
of any duties or responsibilities which are materially inconsistent with his
status, title, position or responsibilities; or any removal of Employee from or
failure to reappoint or re-elect him to any of such positions, status, or title
(including positions, titles, and responsibilities with any affiliate), except
in connection with the termination of his employment for Disability, Cause, or
death, or by Employee other than for Good Reason;
(B) the Bank's requiring Employee to be
based at any place outside a thirty (30) mile radius from its headquarters at
000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx, except for reasonably required
travel on the Bank's business;
(C) any material breach by the Bank of any
express provision of this Agreement.
5. Change in
Control.
(a) Definition. For purposes of this Agreement, “Change
in Control” shall mean any of the following:
(i) Any “person” (as such term is used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Act”)) acquiring “beneficial ownership”) (as such term is used in Rule
13d-3 under the Act), directly or indirectly, of securities of CBC, the parent
holding company of the Bank, representing fifty percent (50%) or more of the
combined voting power of CBC's then outstanding voting securities (the “Voting
Power”), but excluding for this purpose an acquisition by CBC or an “affiliate”
(as defined in Rule 12b-2 under the Act) or by an employee benefit plan of CBC
or of an affiliate.
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(ii) The individuals who constitute the Board
of Directors of CBC (“Board”) on the effective date hereof or their successors
duly appointed in the ordinary course (collectively, the “Incumbent Directors”)
cease to constitute at least a majority of the Board in any twelve (12) month
period. Any director whose nomination is approved by a majority of
the Incumbent Directors shall be considered an Incumbent Director; provided,
however, that no Director whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
directors of CBC shall be considered an Incumbent Director.
(iii) The shareholders of CBC approve a
reorganization, share exchange, merger or consolidation related to CBC or the
Bank following which the owners of the Voting Power of CBC immediately prior to
the closing of such transaction do not beneficially own, directly or indirectly,
more than fifty percent (50%) of the Voting Power of the
Bank.
(iv) The shareholders of the Bank approve a
complete liquidation or dissolution of the Bank, or a sale or other disposition
of all or substantially all of the capital stock or assets of the Bank, but
excluding for this purpose any sale or disposition of all or substantially all
of the capital stock or assets of the Bank to an “affiliate” (as defined in Rule
12b-2 under the Act) of CBC.
Change in Control shall not include a
transaction, or series of transactions, whereby CBC or the Bank becomes a
subsidiary of a holding company if the shareholders of the holding company are
substantially the same as the shareholders of CBC prior to such transaction or
series of series of transactions.
(b) Change
in Control Termination. After the occurrence of a Change in
Control, Employee shall be entitled to receive payments and benefits pursuant to
this Agreement in the following circumstances:
(i) if within the period beginning ninety
(90) days prior to and ending three (3) years after the occurrence of a Change
in Control, the Bank terminates Employee's employment for any reason other than
Cause, Disability, or death; or
(ii) if within three (3) years after the
occurrence of a Change in Control, Employee terminates his employment with the
Bank for “Good Reason.” For purposes of this Section 5(b), “Good Reason” shall
mean the occurrence after a Change in Control of any of the following events or
conditions:
(A) a change in Employee's status, title,
position, or responsibilities (including reporting responsibilities) which
represents a material adverse change from his status, title, position, or
responsibilities in effect immediately prior thereto; the assignment to Employee
of any duties or responsibilities which are materially inconsistent with his
status, title, position or responsibilities; or any removal of Employee from or
failure to reappoint or re-elect him to any of such positions, status, or title,
except in connection with the
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termination of his employment for
Disability, Cause, or death, or by Employee other than for Good
Reason. For purposes of this section, a change in Employee's status,
title, position, etc., shall also include his position and responsibilities with
respect to CBC;
(B) a reduction in Employee's base
salary;
(C) the Bank's requiring Employee to be
based at any place outside a thirty (30) mile radius from 000 Xxxxxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx, except for reasonably required travel on the
Bank's business which is not substantially greater than such travel requirements
prior to the Change in Control;
(D) the failure by the Bank to continue in
effect any compensation, welfare, or benefit plan or other perquisite in which
Employee is participating at the time of a Change in Control without
substituting plans providing Employee with substantially similar or greater
benefits taken in the aggregate, or the taking of any action by the Bank which
would adversely affect Employee's participation in or materially reduce
Employee's benefits under, any of such plans or deprive Employee of any material
fringe benefit enjoyed by Employee at the time of the Change in
Control;
(E) any material breach by the Bank of any
express provision of this Agreement; or
(F) the failure of CBC to obtain an
agreement, satisfactory to Employee, from any successor or assign of CBC to
assume and agree to perform this Agreement.
(c) Change
in Control Benefits. In the event that Employee's employment
with the Bank terminates under any of the circumstances described above in this
Section 5 at any time, Employee shall be entitled to receive all accrued
compensation and any pro rata bonuses to which he may be entitled and which
Employee may have earned up to the date of termination and, upon Employee's
execution of an enforceable general release in a form prepared by the Bank,
severance payments and benefits according to the following schedule and
terms:
(i) a severance payment equal to: 2.99 times
the amount of Employee's then current annual base salary plus the amount of
bonus paid to Employee, if any, in the prior bonus year (less any applicable
taxes and withholdings), in the event the termination occurs no later than
twelve (12) months after the occurrence of a Change in Control; 2.0 times the
amount of Employee's then current annual base salary plus the amount of bonus
paid to Employee, if any, in the prior bonus year (less any applicable taxes and
withholdings), in the event the termination occurs more than twelve (12) months
but within (up to and including) twenty-four (24) months after the occurrence of
a Change in Control; or 1.0 times the amount of Employee's then current annual
base salary plus the amount of bonus paid to Employee, if any, in the prior
bonus year (less any
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applicable taxes and withholdings), in
the event the termination occurs more than twenty-four (24) months but within
(up to and including) thirty-six (36) months after the occurrence of a Change in
Control. The severance payment shall be paid in substantially equal
monthly installments without interest, over a period of thirty–six (36),
twenty-four (24), or twelve (12) months, respectively, in accordance with the
payroll schedule applicable to Employee immediately prior to the termination of
employment and beginning with the first month after the date of termination of
employment (for purposes of Section 409A of the Code, as applicable, each
installment payment shall be considered a separate payment);
and
(ii) a cash payment in an
amount equal to the premiums that Employee would pay in order to secure COBRA
continuation coverage for health insurance under the Bank’s medical plan and for
the premiums Employee would pay for life insurance, accidental death and
dismemberment and disability insurance to continue such insurance during the
applicable severance periods following termination of employment (irrespective
of whether COBRA otherwise would terminate prior to expiration of any such
severance period) (“Premium Payment”); and the additional federal, state, and
local income and other taxes that will result from the Premium Payment (the
“Premium Tax Gross-up”). This Premium Payment and the Premium Tax
Gross-up shall be paid in a single lump-sum cash payment, less any applicable
taxes and withholdings, within thirty (30) days after the date of termination of
employment;
and
(iii) a lump sum payment (or otherwise as
specified by Employee to the extent permitted by the applicable plan) of any and
all amounts contributed to a Bank pension or retirement plan which Employee is
entitled to under the terms of any such plan. In the event Employee
fails to execute or revokes following the execution of the general release
described above, he shall receive any such payments in accordance with the
payment provisions of the applicable plan(s).
Provided,
however, no installment payments or other cash payment shall be provided until
the required general release becomes effective. Any payments delayed
pursuant to this Section shall be paid in a lump sum on the first payroll date
following the effective date of the release.
(d) Limitation
on Payments. Notwithstanding
anything set forth in this Agreement to the contrary, in the event any payment
or benefit to Employee or for his benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement, the Capital Bank Defined
Benefit Supplemental Executive Retirement Plan (the “SERP”), or otherwise (a
“Payment”) would individually or together with any other such payment or benefit
(i) constitute a “parachute payment” within the meaning of Section 280G of
the Code and (ii) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code and any related interest or penalties (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then such Payment shall be
reduced (the “Reduced Amount”) if and to the extent that a reduction in the
Payment would result in Employee’s retaining, on an after-tax basis (after
taking into account all applicable federal, state and local employment taxes,
income taxes, and the Excise Tax computed at the highest applicable marginal
rate), a larger portion of such Payment than if the Payment were not
so
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reduced. If
a reduction in payments or benefits (or a cancellation of the acceleration of
vesting of stock options or equity awards and/or cancellation or other
adjustment of accelerated vesting or service credit for SERP benefits)
constituting “parachute payments” is necessary so that the Payment equals the
Reduced Amount, such reduction and/or cancellation of acceleration shall occur
in the order that generally provides the maximum economic benefit to Employee to
the extent practicable for the Bank. The foregoing calculations shall
be made at the Bank’s expense by an accounting firm selected by the Bank and
reasonably acceptable to Employee which is designated as one of the seven (7)
largest accounting firms in the United States (the “Accounting Firm”); provided,
however, that the Accounting Firm not also be serving as accountant or auditor
for the individual, entity or group effecting the change in ownership or control
that gives rise to the potential application of the Excise Tax. The
Accounting Firm engaged to make the calculations under this Section
5(d) shall provide its determination (the “Determination”), together with
detailed supporting documentation, to the Bank and Employee as soon as
practicable after the date on which Employee’s right to a Payment is triggered
or such other time as is reasonably requested by the Bank or
Employee. If the Accounting Firm determines that no Excise Tax is
payable with respect to a Payment, either before or after the application of the
Reduced Amount, it shall furnish the Bank an opinion reasonably acceptable to
Employee that no Excise Tax will be imposed with respect to such
Payment. Within ten (10) days of the delivery of the Determination to
the Bank, Employee shall have the right to dispute the Determination (the
“Dispute”). Upon the final resolution of a Dispute, the Bank shall
pay to Employee any additional amount required by such resolution in order to
provide Employee the maximum benefit possible pursuant to this Section
5(d). If there is no Dispute, the Determination shall be binding,
final, and conclusive upon the Bank and Employee. Employee shall
remain solely liable for all income taxes, Excise Taxes, or other amounts
assessed on any Payments under this Section 5(d) and nothing in this
Agreement or otherwise shall be interpreted as obligating CBC, the Bank, or any
successors thereto, to pay (or reimburse Employee for) any income taxes, Excise
Taxes, or other taxes or amounts assessed against or incurred by Employee in
connection with his receipt of such Payments.
(e) Payment
of Legal Fees. The
Bank is aware that after a “Change in Control” as such term is defined in
Section 5(a) of this Agreement, management could cause or attempt to cause
the Bank to refuse to comply with its obligations under this Agreement, or could
institute or cause or attempt to cause the Bank to institute litigation seeking
to have this Agreement declared unenforceable, or could take or attempt to take
other action to deny Employee the benefits intended under this
Agreement. In such circumstances, the purpose of this Agreement could
be frustrated. It is the Bank’s intention that Employee not be
required to incur the expenses associated with the enforcement or defense of his
rights under this Agreement, whether by litigation or other legal action,
because the cost and expense thereof would substantially detract from the
benefits intended to be granted to Employee hereunder. It is the
Bank’s intention that Employee not be forced to negotiate settlement of his
rights under this Agreement under threat of incurring
expenses. Accordingly, if after a Change in Control occurs it appears
to Employee that (A) the Bank has failed to comply with any of its
obligations under this Agreement or a dispute arises between Employee and the
Bank as to the terms of this Agreement, or (B) the Bank or any other person
has taken or threatened to take any action to declare this Agreement void or
unenforceable, or instituted any litigation or other action designed to deny,
diminish, or to recover from Employee the benefits intended to be provided
to
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Employee
hereunder, the Bank authorizes Employee to retain counsel of his choice, at the
Bank’s expense pursuant to the limitations set forth in this Section 5(e), to
represent Employee in connection with the enforcement or defense of his rights
under this Agreement, including without limitation the initiation or defense of
any claim, demand, litigation or other legal action, whether by or against the
Bank or any director, officer, stockholder, or other person affiliated with the
Bank, in any jurisdiction. Notwithstanding any previous
attorney-client relationship between the Bank and any counsel chosen by Employee
under this Section 5(e), the Bank irrevocably consents to Employee entering into
an attorney-client relationship with that counsel, and the Bank and Employee
agree that a confidential relationship shall exist between Employee and that
counsel. The Bank agrees to promptly pay or reimburse Employee for,
as the case may be, all attorneys’ fees and related costs and expenses incurred
by Employee in connection with the enforcement or defense of his rights under
this Agreement as described above, up to a maximum aggregate amount of $125,000,
whether suit be brought or not and whether or not incurred in trial, bankruptcy,
or appellate proceedings; provided, however, that Employee obtains either a
written settlement or a final judgment of a court of competent jurisdiction
substantially in his favor or the matter is otherwise resolved substantially in
his favor. The fees and expenses of counsel selected from time to
time by Employee as provided in this Section 5(e) shall be paid directly to
counsel or reimbursed to Employee by the Bank within thirty (30) days following
presentation by Employee of a statement or statements prepared by such counsel
in accordance with such counsel’s customary billing practices. Such reimbursements will be made in
accordance with Treas. Regs. §1.409A-3(i)(1)(iv). The Bank’s
obligation to pay Employee’s legal fees provided by this Section 5(e) operates
separately from, and in addition to, any legal fee reimbursement obligation Bank
may have with Employee under any separate severance or other
agreement. Anything in this Section 5(e) to the contrary
notwithstanding, however, the Bank shall not be required to pay or reimburse
Employee’s legal expenses if doing so would violate Section 18(k) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(k)) and Part 359 of the
Federal Deposit Insurance Corporation (12 C.F.R. § 359.0 et. seq.).
6. Proprietary
Information And Property. Employee shall not, at any time during
or following employment with the Bank, disclose or use, except in the course of
his employment with the Bank or as may be required by law, any confidential or
proprietary information of the Bank or CBC received by Employee while employed
hereunder, whether such information is in Employee's memory or embodied in
writing or other physical form.
Confidential or proprietary information
is information which is not generally available to the general public, or Bank's
competitors, or ascertainable through common sense or general business
knowledge; including, but not limited to data, compilations, methods, financial
data, financial plans, business plans, product plans, lists of actual or
potential customers, and marketing information regarding executives and
employees.
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All records, files or other objects
maintained by or under the control, custody or possession of the Bank or CBC or
their agents in their capacity as agents shall be and remain the Bank's or CBC’s
property. Upon termination of his employment or upon the Bank’s or
CBC’s earlier request, Employee shall return to the Bank all property
(including, but not limited to, credit cards, keys, company car, cell phones,
computer hardware and software, records, files, manuals and other documents in
whatever form they exist, whether electronic, hard copy or otherwise and all
copies, notes or summaries thereof) which he received in connection with his
employment. At the Bank's request, Employee shall bring current all
such records, files or documents before returning them.
Upon notice of cessation of his
employment with the Bank, Employee shall fully cooperate with the Bank in
winding up his pending work and transferring his work to those individuals
designated by the Bank.
7. Survival. The terms and conditions of Section 6
shall survive termination of this Agreement and/or Employee's employment and
shall not be affected by any change or modification of this Agreement unless
specific reference is made to such sections.
8. Remedies. Employee agrees that his breach or
threatened violation of Section 6, will result in immediate and irreparable harm
to the Bank for which legal remedies would be inadequate. Therefore,
in addition to any legal or other relief to which the Bank may be entitled,
(A) the Bank may seek legal and equitable relief, including but not limited
to, preliminary and permanent injunctive relief, (B) the Bank will be
released of its obligations under this Agreement to make any payments to
Employee, including but not limited to, those payable pursuant to Sections 4
and/or 5, and (C) Employee will indemnify the Bank for all expenses,
including attorneys' fees, in seeking to enforce that
Section.
9. Delayed
Distribution to Key Employees; Compliance with Section 409A. If the Bank determines in
accordance with Sections 409A and 416(i) of the Code and the regulations
promulgated thereunder, in the Bank’s sole discretion, that Employee is a Key
Employee of the Bank on the date his employment with the Bank terminates and
that a delay in benefits provided under this Agreement is necessary to comply
with Code Section 409A(A)(2)(B)(i), then any severance payments and any
continuation of benefits or reimbursement of benefit costs provided by this
Agreement shall be delayed for a period of six (6) months following Employee’s
termination date (the “409A Delay Period”). In such event, any
severance payments and the cost of any continuation of benefits provided under
this Agreement that would otherwise be due and payable to Employee during the
409A Delay Period shall be paid to Employee in a lump sum cash amount in the
month following the end of the 409A Delay Period. For purposes of
this Section 9, “Key Employee” shall mean an employee who, on an Identification
Date (“Identification Date” shall mean each December 31) is a key employee as
defined in Section 416(i) of the Code without regard to paragraph (5)
thereof. If Employee is identified as a Key Employee on an
Identification Date, then Employee shall be considered a Key Employee for
purposes of this Agreement during the period beginning on the first April 1
following the Identification Date and ending on the following March
31.
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The
parties intend that the provisions of this Agreement comply with Section 409A
and all provisions of this Agreement shall be construed in a manner consistent
with the requirements for avoiding taxes or penalties under Section
409A. If any provision of this Employment Agreement would subject the
Employee to additional tax or interest under Section 409A, the Bank shall, after
consulting with the Employee, reform the provision to comply with Section 409A.
In reforming any such provision, the Bank shall maintain, to the maximum extent
practicable, the original intent and economic benefit of the applicable
provision without subjecting Employee to additional tax or interest; provided,
however, the Bank shall not be obligated to incur any additional costs or
expenses as a result of reforming any provision. Notwithstanding the foregoing,
the Bank shall have no liability with regard to any failure to comply with
Section 409A so long as it acted in good faith with regard to compliance
therewith.
A termination of employment shall not be
deemed to have occurred for purposes of any provision of this Agreement
providing for the payment of any amounts or benefits upon or following a
termination of employment unless such termination also constitutes a “Separation
from Service” within the meaning of Section 409A and, for purposes of any such
provision of this Agreement, references to a “termination,” “termination of
employment,” “separation from service” or like terms shall mean Separation from
Service.
10. Waiver
of Breach. The Bank's or Employee's waiver of any
breach of a provision of this Agreement shall not waive any subsequent breach by
the other party.
11. Entire
Agreement. Except as provided in this Agreement,
this Agreement: (i) supersedes all other understandings and agreements,
oral or written, between the parties with respect to the subject matter of this
Agreement; and (ii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that:
(i) no representations, inducements, promises or agreements, oral or
written, have been made by any party or by anyone acting on behalf of any party,
which are not embodied in this Agreement; and (ii) no agreement, statement
or promise not contained in this Agreement shall be valid. No change
or modification of this Agreement shall be valid or binding upon the parties
unless such change or modification is in writing and is signed by the
parties.
12. Severability. If a court of competent jurisdiction
holds that any provision or sub-part thereof contained in this Agreement is
invalid, illegal or unenforceable, that invalidity, illegality or
unenforceability shall not affect any other provision in this
Agreement. Additionally, if any of the provisions, clauses or phrases
set forth in Section 6 of this Agreement are held unenforceable by a court of
competent jurisdiction, then the parties desire that such provision, clause or
phrase be “blue-penciled” or rewritten by the court to the extent necessary to
render it enforceable.
13. Parties
Bound. The terms, provisions, covenants and
agreements contained in this Agreement shall apply to, be binding upon and inure
to the benefit of the Bank's successors and assigns. Employee may not
assign this Agreement without the Bank's prior written
consent.
14. Governing
Law. This Agreement and the employment
relationship created by it shall be governed by North Carolina
law. The parties hereby consent to exclusive jurisdiction
in
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North Carolina for the purpose of any
litigation relating to this Agreement and agree that any litigation by or
involving them relating to this Agreement shall be conducted in the court of
Wake County or the federal court of the United States for the Eastern District
of North Carolina.
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IN WITNESS
WHEREOF, the parties have
entered into this Agreement on the day and year written
below.
|
EMPLOYEE
|
||||
|
By: /s/ B. Xxxxx
Xxxxxx
|
September 17,
2008
|
|||
|
B. Xxxxx
Xxxxxx
|
Date
|
|||
|
CAPITAL
BANK
|
||||
|
By: /s/ X. X.
Xxxxxx, III
|
September 22,
2008
|
|||
|
X. X. Xxxxxx,
III
|
Date
|
|||
|
Chairman
|
||||
|
CAPITAL BANK
CORPORATION
|
||||
|
By: /s/ X. X.
Xxxxxx, III
|
September 22,
2008
|
|||
|
X. X. Xxxxxx,
III
|
Date
|
|||
|
Chairman
|
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