AMERICAN FEDERAL
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into this 31st day of July, 1997 by and between American
Federal Bank, FSB, a federal stock savings bank ("American
Federal"), and Xxxxxxx X. Xxxxxxx (hereinafter, "Executive").
BACKGROUND
Executive is the Chief Financial and Chief Operating Officer
of American Federal, which was acquired by CCB Financial
Corporation, a North Carolina corporation ("CCB") on the date
hereof pursuant to an Agreement and Plan of Reorganization, dated
as of February 17, 1997 (the "Merger Agreement") (the "Merger").
CCB and Executive have entered into an Employment Agreement of even
date herewith, which governs the terms of Executive's employment
with CCB and certain of its affiliates (the "CCB Agreement").
American Federal desires to employ Executive in accordance
with the terms of this Agreement. Executive is willing to serve as
an employee of American Federal in accordance with the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the
"Effective Date") is the date on which the effective time of the
Merger occurred.
2. Employment. Executive will continue to serve during the
term of this Agreement as the Executive Vice President and Chief
Operating Officer of American Federal. Executive's
responsibilities to American Federal under this Agreement shall be
in accordance with the policies and objectives established from
time to time by the Board of Directors of American Federal.
3. Employment Period. The term of this Agreement will be
concurrent with the term of the CCB Agreement (the "Employment
Period"), unless earlier terminated in accordance with Section 6
hereof.
4. Extent of Service. During the Employment Period, and
excluding any periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote his business time,
attention, skill and efforts to the faithful performance of his
duties hereunder and under the CCB Agreement; provided, however,
Executive may engage in such incidental activities as are permitted
under the CCB Agreement.
5. Compensation and Benefits. During the Employment Period,
Executive's compensation and benefits for service to American
Federal will be provided by CCB in accordance with the terms of
Section 5 of the CCB Agreement, which terms are incorporated herein
by reference.
6. Termination of Employment. Executive's employment with
American Federal under this Agreement will terminate (i) under the
same circumstances as, (ii) simultaneously with, and (iii) with the
same consequences as, the termination of his employment with CCB
under the terms of Sections 6, 7 and 8 of the CCB Agreement, which
terms are incorporated herein by reference. Any termination
benefits shall be payable only once (i.e., not under both
Agreements). Notwithstanding the above, the Board of Directors of
American Federal may terminate Executive's employment hereunder at
any time, but any such termination other than for Cause (as defined
in the CCB Agreement) shall not prejudice Executive's right to
compensation or other benefits under this Agreement or the CCB
Agreement. As provided in the CCB Agreement, if such termination
is for Cause, Executive shall have no right to receive compensation
or other benefits hereunder or under the CCB Agreement for any
period after termination.
7. Regulatory Intervention. Notwithstanding anything in
this Agreement to the contrary, this Agreement is subject to the
following terms and conditions:
(a) If Executive is suspended and/or temporarily prohibited
from participating in the conduct of American Federal's affairs by
a notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), American
Federal's obligations hereunder shall be suspended as of the date
of service unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, American Federal shall (i) pay
Executive all or part of the compensation withheld while American
Federal's contract obligations were suspended, and (ii) reinstate
any of American Federal's obligations which were suspended.
(b) If Executive is removed and/or permanently prohibited
from participating in the conduct of American Federal'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) and (g)(1)), all
obligations of American Federal under this Agreement shall
terminate as of the effective date of the order, but vested rights
of the parties shall not be affected.
(c) If American Federal is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813
(x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but any vested rights of executive shall not
be affected.
(d) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of the contract
is necessary for the continued operation of American Federal, (i)
by the Office of Thrift Supervision ("OTS") at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an agreement to
provide assistance to or on behalf of American Federal under the
authority contained in Section 13(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1823 (c)); or (ii) by the OTS at the time
the OTS approves a supervisory merger to resolve problems related
to operation of American Federal or when American Federal is
determined by the OTS to be in an unsafe or unsound condition. Any
rights of Executive that shall have vested under this Agreement
shall not be affected by such action.
(e) With regard to the provisions of this Section 7(a)
through (d):
(i) American Federal agrees to use its best efforts to
oppose any such notice of charges as to which there are
reasonable defenses;
(ii) In the event the notice of changes is dismissed or
otherwise resolved in a manner that will permit American
Federal to resume its obligations to pay compensation
hereunder, American Federal will promptly make such payment
hereunder; and
(iii) During the period of suspension , the vested
rights of the contracting parties shall not be affected except
to the extent precluded by such notice.
(f) American Federal's obligations to provide compensation or
other benefits to Executive under this Agreement or the CCB
Agreement shall be terminated or limited to the extent required by
the provisions of any final regulation or order of the Federal
Deposit Insurance Corporation promulgated under Section 18(k) of
the Federal Deposit Insurance Act (12 U.S.C. 1828(k)) limiting or
prohibiting any "golden parachute payment" as defined therein, but
only to the extent that the compensation or payments to be provided
under this Agreement or the CCB Agreement are so prohibited or
limited.
8. Legal Expenses. To the extent not paid by CCB under the
CCB Agreement, American Federal agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest (to the
extent that Executive is successful, in whole or in part, in such
contest) by American Federal, Executive or others of the validity
or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a
result of any contest by Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended.
9. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and
without the prior written consent of American Federal shall not be
assignable by Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive's legal representatives.
(b) American Federal. This Agreement shall inure to the
benefit of and be binding upon American Federal and its successors
and assigns. American Federal will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of American Federal to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that
American Federal would be required to perform it if no such
succession had taken place. As used in this Agreement, "American
Federal" shall mean American Federal as hereinbefore defined and
any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law or
otherwise.
10. Miscellaneous.
(a) No Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment shall
be offset or reduced by the amount of any compensation or benefits
provided to Executive in any subsequent employment.
(b) Waiver. Failure of either party to insist, in one or
more instances, on performance by the other in strict accordance
with the terms and conditions of this Agreement shall not be deemed
a waiver or relinquishment of any right granted in this Agreement
or of the future performance of any such term or condition or of
any other term or condition of this Agreement, unless such waiver
is contained in a writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be
invalid, illegal or unenforceable, either in whole or in part, such
invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of the remaining provisions or
covenants, or any part thereof, of this Agreement, all of which
shall remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to be
interpreted as limiting American Federal from employing other
personnel on such terms and conditions as may be satisfactory to
it.
(e) Entire Agreement. Except as provided herein, this
Agreement and the CCB Agreement contain the entire agreement
between American Federal and Executive with respect to the subject
matter hereof and such Agreements supersede and invalidate any
previous agreements or contracts including employment agreements by
and between American Federal and Executive. No representations,
inducements, promises or agreements, oral or otherwise, which are
not embodied herein or in the CCB Agreement, shall be of any force
or effect.
(f) Governing Law. Except to the extent preempted by
federal law, the laws of the State of North Carolina shall govern
this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(g) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given if delivered or seven
days after mailing if mailed, first class, certified mail, postage
prepaid:
To American Federal:American Federal Bank, FSB
000 Xxxx XxXxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile No. (000) 000-0000
Attention: Chairman of the Board of Directors
To Executive: Xxxxxxx X. Xxxxxxx
000 Xxxx XxXxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile No. (000) 000-0000
Any party may change the address to which notices, requests,
demands and other communications shall be delivered or mailed by
giving notice thereof to the other party in the same manner
provided herein.
(h) Amendments and Modifications. This Agreement may be
amended or modified only by a writing signed by both parties
hereto, which makes specific reference to this Agreement.
(signatures on following page)
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Employment Agreement as of the date first above
written.
AMERICAN FEDERAL BANK, FSB
By: /s/ C. XXX XXXXXX
Title: Chairman, Compensation Committee
TRIMBLE:
/s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
Acknowledged and agreed to:
CCB FINANCIAL CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
Title: President and CEO
