Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (this
"Agreement"), dated as of July 30, 1999, by and between C. XXXX XXXX, III, an
individual resident of Orangeburg County, South Carolina ("Employee"), and FIRST
NATIONAL CORPORATION, a bank holding corporation organized under the laws of
South Carolina (the "Company").
Background Statement
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Employee and the Company are entering into this agreement to establish
certain terms of Employee's employment with the Company, and are amending and
restating the Employment Agreement between the Company and Employee dated March
21, 1994 in order to, among other things, extend the term of that Agreement and
provide additional benefits to Employee.
Statement of Agreement
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In consideration of the mutual covenants herein, Employee and the
Company agree as follows:
1. Employment. The Company agrees to employ Employee, and Employee
agrees to serve the Company, upon the terms and conditions set forth in this
Agreement.
2. Term of Employment. The term of Employee's employment hereunder
shall commence immediately upon the date hereof and shall continue until the
third anniversary of the date hereof, unless terminated earlier as provided in
section 6 hereof (the "Term"); provided, however, that on each anniversary date
of this Agreement, the Term shall be extended for one year (so that on each
anniversary date the Term will be three years) unless at least sixty (60) days
prior to any such anniversary date either party gives to the other notice in
writing of non-renewal.
3. Position and Responsibilities. During the period of employment
hereunder, Employee shall serve as, and with the title, office and authority of,
President and Chief Executive Officer of the Company and First National Bank, a
wholly-owned subsidiary of the Company (the "Bank"), and shall report to the
Board of Directors of the Company and the Bank. Employee shall have the duties,
responsibilities, rights, power and authority as President and Chief Executive
Officer that shall be delegated or assigned to him from time to time by the
Boards of Directors of the Company and the Bank.
4. Duties. During the period of employment hereunder, Employee shall
devote substantially all of his business time, attention, skills and efforts to
the business of the Company and the faithful performance of his duties and
responsibilities hereunder. Employee shall be loyal to the Company and shall
refrain from rendering any business services to any person or entity other than
the Company and its affiliates without the prior written consent of the Company.
Employee may, and is encouraged to, participate in such civic, charitable, and
community activities that do not substantially interfere with the performance of
his duties under this Agreement. Employee shall be permitted to make private
investments so long as these investments do not materially and adversely affect
his employment hereunder.
5. Compensation and Benefits. For all services rendered by Employee to
the Company hereunder, the Company shall compensate Employee as follows:
(a) Base Salary. During the period of employment hereunder, the Company
shall pay Employee an annual salary (as increased by the Company from time to
time in its sole discretion, the "Base Salary") of $220,000 per year, subject to
applicable federal and state income and social security tax withholding
requirements. The Base Salary shall be payable in accordance with the Company's
customary payroll practices.
(b) Reimbursement of Expenses. The Company shall pay or reimburse
Employee for all reasonable travel and other business related expenses incurred
by him in performing his duties under this Agreement. Such expenses shall be
appropriately documented and submitted to the Company in accordance with the
Company's policies and procedures as established from time to time.
(c) Vacation and Sick Leave. Employee shall be provided with vacation
and sick leave in accordance with the Company's policies and procedures for
senior executives as established from time to time.
(d) Employee Benefit Plans. During the period of employment hereunder,
Employee shall be entitled to participate in the employee benefit plans of the
Company or its successors or assigns, as presently in effect or as they may be
modified or added to from time to time, to the extent such benefit plans are
provided to other similarly situated employees.
(e) Incentive Bonus Plans. During the period of employment hereunder,
Employee shall be entitled to participate in the Company's incentive-based bonus
plans, applicable to his employment position, in accordance with both the terms
and conditions of such plans and the Company's policies and procedures as
established from time to time.
(f) Other Fringe Benefits. During the period of employment hereunder,
the Company shall (i) provide Employee with the use of an automobile, (ii)
reimburse Employee for the expense of his attendance at such meetings and
conventions as may be approved by the Company's Board of Directors, and (iii)
reimburse Employee for Country Club of Orangeburg and such other dues and fees
as may be approved by the Company's Board of Directors.
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6. Termination of Employment.
(a) Termination Upon Death, Disability, or For Cause. The Company shall
have the right to terminate Employee's employment hereunder upon the death or
Disability (as defined below) of Employee or for Cause (as defined below). If
Employee's employment is terminated upon Employee's death or disability, the
Company will pay to or for the benefit of Employee or his estate an amount equal
to Employee's Base Salary for the twelve month period preceding death or
Disability in equal monthly installments or in a lump sum as determined by the
Board of Directors of the Company in its discretion and in the case of
Disability the Company will continue Employee's health, medical, and dental
insurance coverages for such twelve month period on the same basis as in effect
on the date of Disability. If Employee's employment is terminated for Cause, the
Company shall have no further obligation to Employee under this Agreement.
Termination for Disability or for Cause shall be effective immediately or upon
such notice to Employee of such termination as may be determined by the Board of
Directors. For purposes of this Agreement:
(i) "Disability" means "disability" (as defined under the
Company's disability insurance policy maintained for Bank executives
from time to time) suffered by Employee for a continuous period of at
least three months or any impairment of mind or body that is likely to
result in a "disability" of Employee for more than three months during
any twelve-month period.
(ii) "Cause" means: (A) the repeated failure of Employee to
perform his responsibilities and duties hereunder after Employee has
been given written notice by the Chairman of the Board of Directors
specifying in general the reasons Employee is failing to perform his
duties and responsibilities hereunder; (B) the commission of an act by
Employee constituting dishonesty or fraud against the Company or the
Bank; (C) the conviction for or the entering of a guilty or no contest
plea with respect to a felony; (D) habitual absenteeism, chronic
alcoholism or any other form of substance abuse; or (E) the commission
of an act by Employee involving gross negligence or moral turpitude
that brings the Company or any of its affiliates into public disrepute
or disgrace or causes material harm to the customer relations,
operations or business prospects of the Company or any of its
affiliates.
In the event of the termination of Employee's employment for Cause under this
Section 6(a), Employee shall be entitled only to the Base Salary earned through
the date of termination.
(b) Termination Without Cause. The Company shall have the right to
terminate Employee's employment at any time and for any reason subject to the
provisions of this Section 6(b). In the event that the Company shall terminate
Employee's employment for any reason other than as provided in Section 6(a), the
Company shall as its sole obligation hereunder pay to Employee the Base Salary,
subject to applicable federal and state income and social security tax
withholding requirements and in accordance with the Company's customary payroll
practices, and shall continue Employee's health, medical and dental insurance
and other benefits on the same basis as in effect at the time of termination,
for the twelve month period following termination. It is understood and agreed
that during the twelve month period following termination Employee would not
participate in any bonus or other incentive plan.
(c) Termination By Employee. Employee shall have the right to terminate
his employment hereunder in the event that (i) the Company assigns Employee
without his consent to a position, responsibilities, or duties of a materially
lesser status or degree of responsibility than his position, responsibilities or
duties as of the date of this Agreement or (ii) he is required to relocate
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permanently from Orangeburg County, South Carolina. In the event Employee
terminates his employment pursuant to this Section 6(c), the Company shall as
its sole obligation hereunder pay to Employee the Base Salary, subject to
applicable federal and state income and social security tax withholding
requirements and in accordance with the Company's customary payroll practices,
and shall continue Employee's health, medical and dental insurance and other
benefits on the same basis as in effect at the time of termination. for the
twelve month period following termination. It is understood and agreed that
during the twelve month period following termination Employee would not
participate in any bonus or other incentive plan.
(d) Employee shall have the right at any time voluntarily to terminate
his employment, in which case Employee shall be entitled only to the Base Salary
through the date of termination.
7. Change of Control.
(a) (1) If (i) a Change of Control (as defined below) occurs during the
Term of this Agreement or any extension thereof, (ii) Employee is employed by
the Company or an affiliate thereof, and (iii) the Employee is terminated by the
Company or such affiliate for any reason other than for death, Disability or
Cause after the Change of Control, the Company (or its successors) shall pay
Employee, or his beneficiary in the event of his subsequent death, subject to
applicable federal and state income and social security tax withholding
requirements, in accordance with the Company's customary payroll practices, an
amount equal to the product of 2.99 multiplied by Employee's "Base Amount," as
defined in Section 280G(b)(3) of the Internal Revenue Code, as amended (the
"Code") (which amount is generally the average annual compensation payable
during the most recent five tax years ending before the year of the Change in
Control as reflected on Forms W-2 for the relevant periods), such amount to be
paid in equal monthly installments over the thirty-six month period following
termination, or at the option of Employee to be paid in a lump sum at the time
of termination without any reduction for commutation to present value. During
the thirty-six month period following termination, the Company (or its
successors) shall also pay for medical and life insurance for Employee on the
same basis as in effect at the time of termination. Payments to the Employee, as
aforesaid, shall not be reduced by the value of any stock options that vest upon
a change in control, regardless of whether any such options are considered
income by the Internal Revenue Service or parachute payments under Section
280G(b)(3).
(2) If (i) a Change of Control (as defined below) occurs
during the Term of this Agreement or any extension thereof, (ii) Employee is
employed by the Company or an affiliate thereof, and (iii) Employee voluntarily
terminates his employment by the Company for any reason within 180 days after
the Change of Control, the Company (or its successors) shall pay Employee or his
beneficiary in the event of his subsequent death, subject to applicable federal
and state income and social security tax withholding requirements, in accordance
with the Company's customary payroll practices, an amount equal to the product
of 2.99 multiplied by Employee's Base Amount, such amount to be paid in equal
monthly installments over the thirty-six month period following termination, or
at the option of Employee to be paid in a lump sum at the time of termination
without any reduction for commutation to present value. During the thirty-six
month period following termination, the Company (or its successors) shall also
pay for medical and life insurance for Employee on the same basis as in effect
at the time of termination. Payments to the Employee, as aforesaid, shall not be
reduced by the value of any stock options that vest upon a change in control,
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regardless of whether any such options are considered income by the Internal
Revenue Service or parachute payments under Section 280G(b)(3).
(b) For purposes of this Agreement, "Change of Control" means the
occurrence of one of the following: (i) any "person" (as that term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended),
other than (A) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or (B) Employee or a group of persons including
Employee, is or becomes the beneficial owner (as that term is used in Section
13(d) of the Securities Exchange Act of 1934), directly or indirectly, of 50% or
more of the common voting stock of the Company or its successors; (ii) there
shall be any consolidation or merger of the Company or the Bank in which such
entity is not the continuing or surviving corporation or as a result of which
the holders of the voting capital stock of the Company or the Bank (as the case
may be) immediately prior to the consummation of the transaction do not own more
than 50% of voting capital stock of the surviving corporation; or (iii) there
occurs the sale or transfer of all or substantially all of the assets of the
Company or the Bank.
8. Confidential Information. Employee acknowledges that during, and as
a result of, Employee's employment with the Company, Employee will acquire, be
exposed to and have access to, material, data and information of the Company
and/or its customers or clients that is confidential or proprietary. At all
times, both during and after the period of employment hereunder, Employee shall
keep and retain in confidence and shall not disclose, except as required in the
course of Employee's employment with the Company, to any person or entity, or
use for his own purposes, any of this proprietary or confidential information.
For purposes of this Section 8, such information shall include, but shall not be
limited to: (i) the Company's standard operating procedures, processes, know-how
and technical and product information, any of which is of value to the Company
and not generally known by the Company's competitors or the public; (ii) all
confidential information obtained from third parties and customers concerning
the business of the Company, including any customer lists or data; and (iii)
confidential business information of the Company, including marketing and
business plans, strategies, projections, business opportunities, client lists,
sales and cost information and financial results and performance. Employee
acknowledges that the obligations pertaining to the confidentiality and
non-disclosure of information shall remain in effect indefinitely, or until the
Company has released any such information into the public domain, in which case
Employee's obligation hereunder shall cease with respect only to such
information so released.
9. Noncompetition.
(a) Noncompetition. Employee shall not take any of the following
actions during the applicable Noncompetition Period (as defined below):
(i) Become employed by (as an officer, director, employee,
consultant or otherwise), involved or engaged in, or otherwise
commercially interested in or affiliated with (other than as a less
than 5% equity owner of any corporation traded on any national,
international or regional stock exchange or in the over-the-counter
market) any person or entity that competes with the Company or an
affiliate thereof (each, a "Company Affiliate") in the business of
providing traditional banking services (but this restriction shall not
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be deemed to apply to non-traditional banking services such as stock
brokerage or insurance services);
(ii) Solicit or attempt to solicit, for competitive purposes,
the business of any of the clients or customers of any Company
Affiliate, or otherwise induce such customers or clients or prospective
customers or clients to reduce, terminate, restrict or alter their
business relationship with any Company Affiliate in any fashion; or
(iii) Induce or attempt to induce any employee of any Company
Affiliate to leave the Company for the purpose of engaging in a
business operation that is competitive with the Company.
(b) Noncompetition Period. For purposes of this Section 9
"Noncompetition Period" shall mean the period of employment hereunder and the
period commencing on the date of termination of employment and ending twelve
months thereafter.
(c) Geographic Scope. The restrictions on competition and solicitation
set forth in this Section 9 shall apply to any county in the State of South
Carolina in which the Company or a Company Affiliate is conducting business
operations during the Noncompetition Period. However, the restrictions are
intended to apply only with respect to personal activities of Employee within
any such county and shall not be deemed to apply if Employee is employed by a
corporation that has branch offices within any such county but Employee does not
personally work in or have any business contacts with persons in such county.
(d) Providing Copy of Agreement. Employee shall provide a copy of this
Agreement to any person or entity with whom Employee interviews that is in
competition with the Company during the Noncompetition Period.
(e) Obligations Survive. Employee's obligations under this Section 9
shall survive any termination of his employment with the Company.
10. Company's Right to Obtain an Injunction. Employee acknowledges that
the Company will have no adequate means of protecting its rights under Sections
8 and 9 other than by securing an injunction. Accordingly, Employee agrees that
the Company is entitled to enforce this Agreement by obtaining a preliminary and
permanent injunction and any other appropriate equitable relief in any court of
competent jurisdiction. Employee acknowledges that the Company's recovery of
damages will not be an adequate means to redress a breach of this Agreement.
Nothing contained in this Section 10 shall prohibit the Company from obtaining
any appropriate remedies in addition to injunctive relief, including recovery of
damages.
11. Waiver of Rights. In consideration of the employment offered
hereunder and the payments made pursuant to Section 5 and the other terms of
this Agreement, Employee acknowledges that the Employment Agreement dated March
21, 1994, between Employee and the Company is hereby terminated, and Employee
forever waives, releases and discharges the Company, any Company Affiliate, and
any of their subsidiaries, shareholders or affiliates and any of their
successors and assigns from any claims, rights and privileges under such
agreement.
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12. General Provisions.
(a) Entire Agreement. This Agreement contains the entire understanding
between the parties hereto relating to the employment of Employee by the Company
and supersedes any and all prior employment or compensation agreements between
the Company and Employee.
(b) Assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by Employee, his beneficiaries or legal
representatives, without the Company's prior written consent; provided, however,
that nothing shall preclude (i) Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death, or (ii) the executors,
administrators or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereunto.
(c) Binding Agreement. This Agreement shall be binding upon, and inure
to the benefit of, Employee and the Company and their permitted successors and
assigns.
(d) Amendment of Agreement. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
(e) Insurance. The Company, at its discretion, may apply for and
procure in its own name and for its own benefit, life insurance on Employee in
any amount or amounts considered advisable; and Employee shall have no right,
title or interest therein. Employee shall submit to any medical or other
examination and execute and deliver any applications or other instruments in
writing as may be reasonably necessary to obtain such insurance.
(f) Severability. If any provision contained in this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. If a court
determines that this Agreement or any covenant contained herein is unreasonable,
void or unenforceable, for any reason whatsoever, then in such event the parties
hereto agree that the duration, geographical or other limitation imposed herein
should be such as the court, or jury, as the case may be, determines to be fair
and reasonable, it being the intent of each of the parties hereto to be subject
to an agreement that is necessary for the protection of the legitimate interest
of the Company and its successors or assigns and that is not unduly harsh in
curtailing the legitimate rights of the Employee.
(g) Notices. All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person (with respect to the Company,
to the Company's secretary) or when mailed, if mailed by certified mail, return
receipt requested. Notices mailed shall be addressed, in the case of Employee,
to his last known residential address, and in the case of the Company, to its
corporate headquarters, attention of the Secretary, or to such other address as
Employee or the Company may designate in writing at any time or from time to
time to the other party in accordance with this Section.
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(h) Waiver. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege. The provisions of this Section 12(h) cannot be waived
except in writing signed by both parties.
(i) Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of South Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
FIRST NATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Chairman of the Board
EMPLOYEE
/s/ C. Xxxx Xxxx, III
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C. Xxxx Xxxx, III
