Amended Employment Agreement
EXHIBIT
10(xx)
Amended
Employment Agreement
This
Amended
Employment Agreement
(this
“Agreement”) is entered into effective as of this24 day of October, 2007, by and
among W. Xxxxx Xxxxx (the “Executive”),
Crescent Financial Corporation, a North Carolina corporation (the
“Corporation”), and Crescent State Bank, a North Carolina-chartered bank and
wholly owned subsidiary of the Corporation (the “Bank”). The Corporation and the
Bank are hereinafter sometimes referred to together or individually as
“Employer.”
Whereas,
the
Executive possesses unique skills, knowledge, and experience relating to the
banking business and is expected to make significant contributions to the
profitability, growth, and financial strength of the Corporation and
affiliates,
Whereas,
Employer desires to assure itself of the continuity of management and desires
to
establish minimum severance benefits for certain of its officers and other
key
employees,
Whereas,
Employer desires to provide additional inducement for the Executive to remain
in
the employ of the Employer,
Whereas,
the
Executive, the Corporation, and Port City Capital Bank, a wholly owned
subsidiary of the Corporation that has merged into the Bank, are parties to
an
Employment Agreement dated as of September 1, 2006, but the Executive and the
Employer intend that this Agreement restate the previous employment agreement
in
its entirety, incorporating into this Agreement the terms of the September
1,
2006 Employment Agreement as amended hereby, and
Whereas,
none of
the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists
or,
to the best knowledge of Employer, is contemplated insofar as Employer or any
affiliates are concerned.
Now
Therefore,
in
consideration of these premises, the mutual covenants contained herein, and
other good and valuable consideration the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto agree as follows.
Article
1
Employment
1.1 Employment.
The
Executive shall serve as Executive Vice President of the Bank according to
the
terms and conditions of this Agreement. The Executive hereby accepts employment
according to the terms and conditions of this Agreement and for the period
stated in section 1.3.
1.2 Duties.
As
Executive Vice President of the Bank, the Executive shall serve the Bank
faithfully, diligently, competently, and to the best of the Executive’s ability.
The Executive shall also serve as a non-voting member of the loan committee
of
the Bank’s board of directors. The Executive shall exclusively devote full time,
energy, and attention to the promotion of the Bank’s interests throughout the
term of this Agreement. During the two-year period commencing when Port City
Capital Bank merges into the Bank, the Executive shall report to the President
and Chief Executive Officer of the Bank or any successor thereto. Without the
written consent of the Corporation’s board of directors, during the term of this
Agreement the Executive shall not render services to or for any person, firm,
corporation, or other entity or organization in exchange for compensation,
regardless of the form in which such compensation is paid and regardless of
whether it is paid directly or indirectly to the Executive. However, the
Executive may serve with or without compensation as an officer or director
of
any charitable or civic organization. Nothing in this section 1.2 shall prevent
the Executive from managing personal investments and affairs, however, provided
that doing so does not interfere with the proper performance of the Executive’s
duties.
1.3 Term.
The
initial term of this Agreement shall be for a period of three years, commencing
September 1, 2006. On the first anniversary of September 1, 2006 and on each
anniversary thereafter this Agreement shall be extended automatically for one
additional year unless the Bank’s board of directors determines that the term
shall not be extended. If the board of directors determines not to extend the
term, it shall promptly notify the Executive in writing. If the board of
directors decides not to extend the term of this Agreement, this Agreement
shall
nevertheless remain in force until its term expires. The board of directors’
decision not to extend the term of this Agreement shall not – by
itself – give the Executive any rights under this Agreement to claim an
adverse change in his position, compensation, or circumstances or otherwise
to
claim entitlement to severance benefits under Article 4 of this Agreement.
References herein to the term of this Agreement shall refer to the initial
term,
as the same may be extended. Unless sooner terminated, the Executive’s
employment shall terminate when the Executive attains age 65.
Article
2
Compensation
and Other Benefits
2.1 Base
Salary.
In
consideration of the Executive’s performance of the obligations under this
Agreement, Employer shall pay or cause to be paid to the Executive a salary
at
the annual rate of not less than $175,000, payable in monthly installments.
The
Executive’s salary shall be reviewed annually by the Compensation Committee of
the Bank’s board of directors or by the board committee having jurisdiction over
executive compensation. The Executive’s salary shall be increased no less
frequently than annually to account for cost of living increases. The
Executive’s salary also may be increased beyond the amount necessary to account
for cost of living increases at the discretion of the committee having
jurisdiction over executive compensation. However, the Executive’s salary shall
not be reduced. The Executive’s salary, as the same may be increased from time
to time, is referred to in this Agreement as the “Base
Salary.”
2.2 Benefit
Plans and Perquisites.
The
Executive shall be entitled throughout the term of this Agreement to participate
in any and all officer or employee compensation, bonus, incentive, and benefit
plans in effect from time to time, including without limitation stock option
plans and other stock-based compensation, incentive, bonus, or purchase plans,
or plans providing pension, medical, dental, disability, and group life
benefits, including Employer’s 401(k) Plan, and to receive any and all other
fringe benefits provided from time to time, provided that the Executive
satisfies the eligibility requirements for any such plans or
benefits.
(a) Club
dues.
During
the term of this Agreement, the Employer shall pay or cause to be paid the
Executive’s continued membership dues in civic and/or country clubs in an amount
up to $750 per month.
(b) Reimbursement
of business expenses.
The
Executive shall be entitled to reimbursement for all reasonable business
expenses incurred performing the Executive’s obligations under this Agreement,
including but not limited to all reasonable business travel and entertainment
expenses incurred while acting at the request of or in the service of Employer
and reasonable expenses for attendance at annual and other periodic meetings
of
trade associations.
2.3 Vacation.
The
Executive shall be entitled to paid annual vacation and sick leave in accordance
with the policies established from time to time by Employer, but in no event
fewer than four weeks of vacation per year. The Executive shall schedule at
least five consecutive days of vacation per year. The timing of vacations shall
be scheduled in a reasonable manner by the Executive. The Executive shall not
be
entitled to any additional compensation for failure to use allotted vacation
or
sick leave nor shall the Executive be entitled to accumulate unused sick leave
from one year to the next, unless authorized by the Bank’s board of directors to
do so.
2.4 Supplemental
Retirement Plan.
The
Bank and the Executive have entered into a Salary Continuation Agreement dated
as of October 24, 2007. Unless the Salary Continuation Agreement explicitly
provides otherwise, whether benefits are properly payable to the Executive
under
the Salary Continuation Agreement shall be determined solely by reference to
that agreement, as the same may be amended.
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Article
3
Employment
Termination
3.1 Termination
because of Death or Disability.
(a)
Death.
The
Executive’s employment shall terminate automatically on the date of the
Executive’s death. If the Executive dies in active service to Employer, for 12
months after the Executive’s death Employer shall assist the Executive’s family
with continuing health care coverage under COBRA substantially identical to
that
provided before the Executive’s death. In addition, if the Executive’s
employment terminates because of death the Executive’s estate shall be entitled
to any payments owing under section 6.2, as provided in section
6.2.
(b) Disability.
By
delivery of written notice 30 days in advance to the Executive, Employer may
terminate the Executive’s employment if the Executive is disabled. For purposes
of this Agreement, the Executive shall be considered “disabled”
if
an
independent physician selected by Employer and reasonably acceptable to the
Executive or the Executive’s legal representative determines that, because of
illness or accident, the Executive is unable to perform the Executive’s duties
for a period of 90 consecutive days. The Executive shall not be considered
disabled, however, if the Executive returns to work on a full-time basis within
30 days after Employer gives notice of termination due to disability. If the
Executive’s employment terminates because of disability, the Executive shall
receive the salary earned through the date on which termination became
effective, any unpaid bonus or incentive compensation due to the Executive
for
the calendar year preceding the calendar year in which the termination became
effective, any payments the Executive is eligible to receive under any
disability insurance program in which the Executive participates, such other
benefits to which the Executive may be entitled under Employer’s benefit plans,
policies, and agreements, and any benefits provided for elsewhere in this
Agreement. In addition, if the Executive’s employment terminates because of
disability the Executive shall be entitled to any payments owing under section
6.2, as provided in section 6.2.
3.2 Involuntary
Termination with Cause.
Employer may terminate the Executive’s employment with Cause. If the Executive’s
employment terminates with Cause, the Executive shall receive the salary to
which the Executive was entitled through the date on which termination became
effective and any other benefits to which the Executive may be entitled under
Employer’s benefit plans and policies in effect on the termination date. For
purposes of this Agreement “Cause”
means
any of the following –
(1) an
intentional act of fraud, embezzlement, or theft by the Executive in the course
of employment. An act or failure to act on the Executive’s part shall be
considered intentional if it is not in good faith and if it is without a
reasonable belief that the action or failure to act is in the Employer’s best
interests. No act or failure to act on the part of the Executive shall be deemed
to have been intentional if it was due primarily to an error in judgment or
negligence, or
(2) intentional
violation by the Executive of any applicable law or significant policy of
Employer that, in Employer’s reasonable judgement, results in an adverse effect
on Employer, regardless of whether the violation leads to criminal prosecution
or conviction. For purposes of this Agreement applicable laws include any
statute, rule, regulatory order, statement of policy, or final cease-and-desist
order of any governmental agency or body having regulatory authority over
Employer, or
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(3) the
Executive’s gross negligence or gross neglect of duties in the performance of
duties, or
(4) intentional
wrongful damage by the Executive to the business or property of Employer,
including without limitation the reputation of Employer, which in Employer’s
reasonable judgment causes material harm to Employer, or
(5) a
breach
by the Executive of fiduciary duties or misconduct involving dishonesty, in
either case whether in the Executive’s capacity as an officer or as a director,
or
(6) a
breach
by the Executive of this Agreement that, in the Employer’s reasonable judgment,
is a material breach, which breach is not corrected by the Executive within
10
days after receiving written notice of the breach, or
(7) removal
of the Executive from office or permanent prohibition of the Executive from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1),
or
(8) conviction
of the Executive for or plea of no contest to a felony or conviction of or
plea
of no contest to a misdemeanor involving moral turpitude, or the actual
incarceration of the Executive for five consecutive days or more,
or
(9) the
occurrence of any event that results in the Executive being excluded from
coverage, or having coverage limited for the Executive as compared to other
executives of the Bank, under the Bank’s blanket bond or other fidelity or
insurance policy covering its directors, officers, or employees.
3.3 Voluntary
Termination by the Executive Without Good Reason.
If the
Executive terminates employment without Good Reason, the Executive shall receive
the Base Salary and expense reimbursement to which the Executive is entitled
through the date on which termination becomes effective, and any payments owing
under section 6.2, as provided in section 6.2.
3.4 Involuntary
Termination Without Cause and Voluntary Termination with Good
Reason.
With
written notice to the Executive 90 days in advance, the Employer may terminate
the Executive’s employment without Cause. Termination shall take effect at the
end of the 90-day period. With advance written notice to the Employer as
provided in clause (y),
the
Executive may terminate employment for Good Reason. If the Executive’s
employment terminates involuntarily without Cause or voluntarily but with Good
Reason, the Executive shall be entitled to the benefits specified in Article
4
of this Agreement, except as may be provided in Article 4, and any payments
owing under section 6.2, as provided in section 6.2. For purposes of this
Agreement a voluntary termination by the Executive shall be considered a
voluntary termination with Good Reason if the conditions stated in both clauses
(x)
and
(y)
are
satisfied –
(x) a
voluntary termination by the Executive shall be considered a voluntary
termination with Good Reason if any of the following occur without the
Executive’s advance written consent, and the term Good Reason shall mean the
occurrence of any of the following without the Executive’s advance written
consent –
(1) a
material diminution of the Executive’s Base Salary,
(2) a
material diminution of the Executive’s authority, duties, or
responsibilities,
4
(3) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report,
(4) a
material diminution in the budget over which the Executive retains
authority,
(5) a
material change in the geographic location at which the Executive must perform
services for the Employer, or
(6) any
other
action or inaction that constitutes a material breach by the Employer of this
Agreement.
(y) the
Executive must give notice to the Employer of the existence of one or more
of
the conditions described in clause (x)
within
90 days after the initial existence of the condition, and the Employer shall
have 30 days thereafter to remedy the condition. In addition, the Executive’s
voluntary termination because of the existence of one or more of the conditions
described in clause (x)
must
occur within 12 months after the initial existence of the
condition.
Article
4
Severance
Compensation
4.1 Severance.
If the
Employer terminates the Executive’s employment without Cause or if the Executive
voluntarily terminates employment for Good Reason, the Executive shall be
entitled to –
(a) Cash
severance.
A
lump-sum severance payment in cash in the amount of two and one half times
his
Base Salary, payable within 30 days after the Executive’s employment
termination. Cash severance compensation shall not be payable, however, if
the
Executive’s employment terminates after a Change in Control of the Corporation.
For purposes of this Agreement a Change in Control means a change in control
as
defined in Internal Revenue Code section 409A and rules, regulations, and
guidance of general application thereunder issued by the Department of the
Treasury, including –
(1) Change
in ownership:
a
change in ownership of the Corporation occurs on the date any one person or
group accumulates ownership of Corporation stock constituting more than 50%
of
the total fair market value or total voting power of Corporation
stock,
(2) Change
in effective control:
(x)
any one
person or more than one person acting as a group acquires within a 12-month
period ownership of Corporation stock possessing 30% or more of the total voting
power of Corporation stock, or (y)
a
majority of the Corporation’s board of directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed in advance
by
a majority of the Corporation’s board of directors, or
(3) Change
in ownership of a substantial portion of assets:
a
change in ownership of a substantial portion of the Corporation’s assets occurs
if in a 12-month period any one person or more than one person acting as a
group
acquires from the Corporation assets having a total gross fair market value
equal to or exceeding 40% of the total gross fair market value of all of the
Corporation’s assets immediately before the acquisition or acquisitions. For
this purpose, gross fair market value means the value of the Corporation’s
assets, or the value of the assets being disposed of, determined without regard
to any liabilities associated with the assets.
(b) Cash-out
of the value of unvested stock options.
The
Executive shall be entitled to receive from Employer an amount equal to the
intrinsic value of any unvested stock options and the value of any unvested
restricted stock or other equity-based compensation as of the effective date
of
termination. Amounts payable under this paragraph (b) shall be paid in a single
lump sum in cash by the earlier of (x)
90 days
after the Executive’s employment termination or (y)
March
15 of the year after the year in which the Executive’s employment terminates.
The intrinsic value of unvested stock options means the per share closing price
of Corporation common stock on the date of the Executive’s employment
termination less the per share exercise price of the unvested stock options,
multiplied by the number of unvested options.
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(c)
Outplacement
and support.
Employer shall pay or cause to be paid to the Executive
reasonable outplacement expenses in an amount up to $25,000, and for one
year
after termination Employer shall provide the Executive with the use of
office
space and reasonable office support facilities, including secretarial
assistance.
Article
5
Confidentiality
and Creative Work
5.1 Non-disclosure.
The
Executive covenants and agrees not to reveal to any person, firm, or corporation
any confidential information of any nature concerning Employer or its business,
or anything connected therewith. As used in this Article 5, the term
“confidential
information”
means
all of the Corporation’s and its affiliates’ confidential and proprietary
information and trade secrets in existence on the date hereof or existing at
any
time during the term of this Agreement, including but not limited to
–
(a) the
whole
or any portion or phase of any business plans, financial information, purchasing
data, supplier data, accounting data, or other financial
information,
(b) the
whole
or any portion or phase of any research and development information, design
procedures, algorithms or processes, or other technical
information,
(c) the
whole
or any portion or phase of any marketing or sales information, sales records,
customer lists, prices, sales projections, or other sales information,
and
(d) trade
secrets, as defined from time to time by the laws of the State of North
Carolina.
Despite
anything to the contrary in this Agreement, confidential information excludes
information that – as of the date hereof or at any time after the date
hereof – is published or disseminated without obligation of confidence or
that becomes a part of the public domain by or through action of Employer or
otherwise than by or at the direction of the Executive. This section 5.1 does
not prohibit disclosure required by an order of a court having jurisdiction
or a
subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of the
Executive’s authority.
5.2 Return
of Materials.
The
Executive agrees to deliver or return to Employer upon employment termination
or
as soon thereafter as possible all written information and any other similar
items furnished by Employer or prepared by the Executive in connection with
the
Executive’s services hereunder. The Executive will retain no copies thereof
after termination of this Agreement or termination of the Executive’s
employment.
5.3 Injunctive
Relief.
The
Executive acknowledges that it is impossible to measure in money the damages
that will accrue to Employer if the Executive fails to observe the obligations
imposed by this Article 5. Accordingly, if Employer institutes an action to
enforce the provisions hereof, the Executive hereby waives the claim or defense
that an adequate remedy at law is available to Employer, and the Executive
agrees not to urge in any such action the claim or defense that an adequate
remedy at law exists.
5.4 Affiliates’
Confidential Information is Covered; Confidentiality Obligation Survives
Termination.
For
purposes of this Agreement, the term “affiliate”
of
the
Corporation includes but is not limited to the Bank, any bank successor to
the
Bank, and any entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
the
Bank. The rights and obligations set forth in this Article 5 shall survive
termination of this Agreement.
6
5.5 Creative
Work.
The
Executive agrees that all creative work and work product, including but not
limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term
of this Agreement, regardless of when or where such work or work product was
produced, constitutes work made for hire, all rights of which are owned by
Employer. The Executive hereby assigns to the Corporation and to the Bank all
rights, title, and interest, whether by way of copyrights, trade secret,
trademark, patent, or otherwise, in all such work or work product, regardless
of
whether the same is subject to protection by patent, trademark, or copyright
laws.
Article
6
Competition
After Employment Termination
6.1 Covenant
Not to Solicit Employees.
The
Executive agrees not to solicit the services of any officer or employee of
the
Employer for one year after the Executive’s employment termination.
6.2 Covenant
Not to Compete.
(a) For
and in consideration of the “payments” (as defined below), without advance
written consent of the Employer the Executive covenants and agrees not to
compete directly or indirectly with the Employer for the “non-compete term” (as
defined below) after employment termination, plus any period during which the
Executive is in violation of this covenant not to compete and any period during
which the Employer seeks by litigation to enforce this covenant not to compete.
For purposes of this section –
(1) the
term
“compete” means
(a) providing
financial products or services on behalf of any financial institution for any
person residing in the territory,
(b) assisting
(other than through the performance of ministerial or clerical duties) any
financial institution in providing financial products or services to any person
residing in the territory, or
(c) inducing
or attempting to induce any person who was a customer of the Employer at the
date of the Executive’s employment termination to seek financial products or
services from another financial institution.
(2) the
words
“directly or indirectly” means –
(a) acting
as
a consultant, officer, director, independent contractor, or employee of any
financial institution, de
novo
institution in organization, or organizational group in competition or intending
to be in competition with the Employer in the territory, or
(b) communicating
to such financial institution the names or addresses or any financial
information concerning any person who was a customer of the Employer at the
Executive’s employment termination.
(3) the
term
“customer” means any person to whom the Employer is providing financial products
or services on the date of the Executive’s employment termination.
(4) the
term
“financial institution” means any bank, savings association, or bank or savings
association holding company, or any other institution, the business of which
is
engaging in activities that are financial in nature or incidental to such
financial activities as described in section 4(k) of the Bank Holding Company
Act of 1956, other than the Employer or one of its affiliated
corporations.
7
(5) “financial
product or service” means any product or service that a financial institution or
a financial holding company could offer by engaging in any activity that is
financial in nature or incidental to such a financial activity under section
4(k) of the Bank Holding Company Act of 1956 and that is offered by the Employer
or an affiliate on the date of the Executive’s employment termination, including
but not limited to banking activities and activities that are closely related
and a proper incident to banking.
(6) the
term
“person” means any individual or individuals, corporation, partnership,
fiduciary, or association.
(7) the
term
“territory” means New Hanover County and any counties contiguous
thereto.
(8) the
term
“non-compete term” shall be a period of two years if the Executive’s employment
terminates before September 1, 2011; shall be a period of one year if the
Executive’s employment terminates after September 1, 2011, but before September
1, 2013; and after September 1, 2013, there shall be no period of time in which
Executive is not permitted to “compete” as defined herein.
(9) the
term
“payments” shall mean the payment by the Employer of $78,333 to the Executive on
September 1, 2006, and the payment of an equivalent amount on each of the first
two anniversaries of that date.
(b) If
any
provision of this section or any word, phrase, clause, sentence, or other
portion thereof (including, without limitation, the geographical and temporal
restrictions contained therein) is held to be unenforceable or invalid for
any
reason, the unenforceable or invalid provision or portion shall be modified
or
deleted so that the provisions hereof, as modified, are legal and enforceable
to
the fullest extent permitted under applicable law.
6.3 Specific
Performance.
The
Executive’s covenants contained in Article 6 shall survive termination of the
Executive’s employment for any reason, and shall be enforceable after such
termination. Without intending to limit the remedies available to the
Corporation and the Bank, the Executive agrees that damages at law are an
insufficient remedy for violation by the Executive of the covenants contained
in
this Agreement. Accordingly, the Executive hereby agrees that either of the
Corporation or the Bank may apply for and is entitled to injunctive relief
in
any court of competent jurisdiction to restrain the breach or threatened breach
of, or otherwise to specifically enforce, any of the covenants of this Article
6, in each case without proof of actual damages, in addition to any other
remedies that may be available under applicable law. The Executive hereby waives
the claim or defense that an adequate remedy at law is available to the
Corporation or the Bank, and the Executive agrees not to urge in any action
or
proceeding the claim or defense that an adequate remedy at law
exists.
Without
limiting the generality of the foregoing, without limiting the remedies
available to the Corporation or the Bank for violation of this Agreement, and
without constituting an election of remedies, if the Executive violates any
of
the terms of Article 6 he shall forfeit on the Executive’s own behalf and that
of beneficiary(ies) any rights to and interest in any severance or other
benefits under this Agreement and this Agreement shall thereafter be null,
void,
and of no further force or effect.
6.4 Article
6 Survives Termination.
The
rights and obligations set forth in this Article 6 shall survive termination
of
this Agreement.
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Article
7
Miscellaneous
7.1 Successors
and Assigns.
(a)
This
Agreement is binding on successors.
This
Agreement shall be binding upon Employer and any successor to Employer,
including any persons acquiring directly or indirectly all or substantially
all
of the business or assets of Employer by purchase, merger, consolidation,
reorganization, or otherwise. But this Agreement and Employer’s obligations
under this Agreement are not otherwise assignable, transferable, or delegable
by
Employer. By agreement in form and substance satisfactory to the Executive,
Employer shall require any successor to all or substantially all of the business
or assets of Employer expressly to assume and agree to perform this Agreement
in
the same manner and to the same extent Employer would be required to perform
had
no succession occurred.
(b) This
Agreement is enforceable by the Executive’s heirs.
This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, and legatees.
(c) This
Agreement is personal and is not assignable.
This
Agreement is personal in nature. Without written consent of the other parties,
no party shall assign, transfer, or delegate this Agreement or any rights or
obligations under this Agreement, except as expressly provided herein. Without
limiting the generality or effect of the foregoing, the Executive’s right to
receive payments hereunder is not assignable or transferable, whether by pledge,
creation of a security interest, or otherwise, except for a transfer by the
Executive’s will or by the laws of descent and distribution. If the Executive
attempts an assignment or transfer that is contrary to this section 7.1,
Employer shall have no liability to pay any amount to the assignee or
transferee.
7.2 Governing
Law, Jurisdiction and Forum.
This
Agreement shall be construed under and governed by the internal laws of the
State of North Carolina, without giving effect to any conflict of laws provision
or rule (whether of the State of North Carolina or any other jurisdiction)
that
would cause the application of the laws of any jurisdiction other than the
State
of North Carolina. By entering into this Agreement, the Executive acknowledges
that the Executive is subject to the jurisdiction of both the federal and state
courts in the State of North Carolina. Any actions or proceedings instituted
under this Agreement shall be brought and tried solely in courts located in
Wake
County, North Carolina, or in the federal court having jurisdiction in Cary,
North Carolina. The Executive expressly waives the right to have any such
actions or proceedings brought or tried elsewhere.
7.3 Entire
Agreement.
This
Agreement sets forth the entire agreement of the parties concerning the
employment of the Executive by Employer, and any oral or written statements,
representations, agreements, or understandings made or entered into prior to
or
contemporaneously with the execution of this Agreement are hereby rescinded,
revoked, and rendered null and void. This Agreement amends and restates in
its
entirety the Employment Agreement dated as of September 1, 2006 between the
Executive and the Employer.
7.4 Notices.
Any
notice under this Agreement shall be deemed to have been effectively made or
given if in writing and personally delivered, delivered by mail properly
addressed in a sealed envelope, postage prepaid by certified or registered
mail,
delivered by a reputable overnight delivery service, or sent by facsimile.
Unless otherwise changed by notice, notice shall be properly addressed to the
Executive if addressed to the address of the Executive on the books and records
of the Employer at the time of the delivery of such notice, and properly
addressed to Employer if addressed to Crescent Financial Corporation, 0000
Xxxx
Xxxxx Xxxx, Xxxx, Xxxxx Xxxxxxxx 00000, Attention: Corporate
Secretary.
7.5 Severability.
In the
case of conflict between any provision of this Agreement and any statute,
regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent
necessary to bring them within the requirements of law. If any provision of
this
Agreement is held by a court of competent jurisdiction to be indefinite,
invalid, void or voidable, or otherwise unenforceable, the remainder of this
Agreement shall continue in full force and effect unless that would clearly
be
contrary to the intentions of the parties or would result in an
injustice.
7.6 Captions
and Counterparts.
The
captions in this Agreement are solely for convenience. The captions in no way
define, limit, or describe the scope or intent of this Agreement. This Agreement
may be executed in several counterparts, each of which shall be deemed to be
an
original but all of which together shall constitute one and the same
instrument.
9
7.7 No
Duty to Mitigate.
Employer hereby acknowledges that it will be difficult and could be impossible
(x)
for the
Executive to find reasonably comparable employment after employment termination,
and (y)
to
measure the amount of damages the Executive may suffer as a result of
termination. Additionally, Employer acknowledges that its general severance
pay
plans do not provide for mitigation, offset, or reduction of any severance
payment received thereunder. The Employer further acknowledges that the payment
of severance benefits under this Agreement is reasonable and shall be liquidated
damages. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment. Moreover,
the amount of any payment provided for in this Agreement shall not be reduced
by
any compensation earned or benefits provided as the result of employment of
the
Executive or as a result of the Executive being self-employed after employment
termination.
7.8 Amendment
and Waiver.
This
Agreement may not be amended, released, discharged, abandoned, changed, or
modified except by an instrument in writing signed by each of the parties
hereto. The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall not be construed to be a waiver of any such
provision or affect the validity of this Agreement or any part thereof or the
right of any party thereafter to enforce each and every such provision. No
waiver or any breach of this Agreement shall be held to be a waiver of any
other
or subsequent breach.
7.9 Consultation
with Counsel and Interpretation of this Agreement.
The
Executive acknowledges and agrees that the Executive has had the assistance
of
counsel of the Executive’s choosing in the negotiation of this Agreement, or the
Executive has chosen not to have the assistance of counsel. Both parties hereto
having participated in the negotiation and drafting of this Agreement, they
hereby agree that there shall not be strict interpretation against either party
in connection with any review of this Agreement in which interpretation thereof
is an issue.
7.10 Compliance
with Internal Revenue Code Section 409A.
Employer and the Executive intend that their exercise of authority or discretion
under this Agreement shall comply with section 409A of the Internal Revenue
Code
of 1986. If when the Executive’s employment terminates the Executive is a
specified employee, as defined in section 409A of the Internal Revenue Code
of
1986, and if any payments under this Agreement will result in additional tax
or
interest to the Executive because of section 409A, then despite any contrary
provision of this Agreement the Executive shall not be entitled to the payments
until the earliest of (x)
the
date that is at least six months after termination of the Executive’s employment
for reasons other than the Executive’s death, (y)
the
date of the Executive’s death, or (z)
any
earlier date that does not result in additional tax or interest to the Executive
under section 409A. As promptly as possible after the end of the period during
which payments are delayed under this provision, the entire amount of the
delayed payments shall be paid to the Executive in a single lump sum. If any
provision of this Agreement does not satisfy the requirements of section 409A,
such provision shall nevertheless be applied in a manner consistent with those
requirements. If any provision of this Agreement would subject the Executive
to
additional tax or interest under section 409A, Employer shall reform the
provision. However, Employer shall maintain to the maximum extent practicable
the original intent of the applicable provision without subjecting the Executive
to additional tax or interest, and Employer shall not be required to incur
any
additional compensation expense as a result of the reformed provision.
References in this Agreement to section 409A of the Internal Revenue Code of
1986 include rules, regulations, and guidance of general application issued
by
the Department of the Treasury under Internal Revenue Code section
409A.
10
In
Witness Whereof,
the
parties have executed this Employment Agreement as of the date first written
above.
|
Executive
|
Crescent
Financial Corporation
|
|
|
/s/ W. Xxxxx Xxxxx
|
By:
|
|
|
W.
Xxxxx Xxxxx
|
||
|
Its:
|
||
|
Crescent
State Bank
|
||
|
By:
|
||
|
Its:
|
||
11
