STATE OF NORTH CAROLINA
COUNTY OF UNION
EMPLOYMENT AGREEMENT
This AGREEMENT made and entered into this the 20th day of January,
1993, by and between BANK OF UNION, a banking corporation duly organized and
existing under the laws of North Carolina (hereinafter called the "Bank") and H.
Xxxxx Xxxxxxx, a key management employee of the Bank, (hereinafter called the
"Employee");
WHEREAS, the Employee is currently one of the key management personnel
of the Bank; and
WHEREAS, the parties desire by this writing to set forth the
employment relationship of the Bank and the Employee;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. EMPLOYMENT. The Employee is employed as President &
CEO of the Bank. The Employee shall render administrative and
management services to the Bank such as are customarily performed by persons
situated in a similar executive capacity. He shall also promote, by
entertainment or otherwise, as and to the extent permitted by law, the business
of the Bank. The Employee's other duties shall be such as the Board of Directors
may from time to time reasonably direct, including normal duties as an officer
of the Bank, if elected as such.
2. PLACE OF EMPLOYMENT. The place of employment shall be interpreted as
being within the bank's primary market area and in no case shall be more than
thirty-five miles from the boundary of Union County, North Carolina, unless
agreed upon by the employee.
3. COMPENSATION. The Bank agrees to pay the Employee during the term of
this Agreement a salary at the rate of Ninety Thousand
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Dollars per annum, payable in cash not less frequently than monthly and
not later than the tenth (10th) day following the expiration of the month in
question; provided, however, that no such salary shall be paid in respect of
any month or portion thereof subsequent to the termination of this Agreement;
and provided, further, that the rate of such salary shall be reviewed by the
Board of Directors of the Bank not less often than annually and may be
increased (but not decreased) from time to time in such amounts as the Board
in its discretion may decide, subject to the customary withholding tax and
other employee taxes as required with respect to compensation paid by a
corporation to an employee.
4. DISCRETIONARY BONUSES. The Employee shall be entitled to participate
in an equitable manner with all other key management personnel of the Bank in
discretionary bonuses authorized and declared by the Board of Directors of the
Bank to its key management employees. No other compensation provided for in this
Agreement shall be deemed a substitute for Employee's right to participate in
such discretionary bonuses when and as declared by the Board of Directors.
5. (a) PARTICIPATION IN RETIREMENT AND MEDICAL PLANS. The Employee
shall be entitled to participate in any Plan of the Bank relating to pension,
profit-sharing, or other retirement benefits and medical coverage or
reimbursement plans that the Bank may adopt for the benefits of its employees.
(b) FRINGE BENEFITS. The Employee shall be eligible to participate
in any other fringe benefits which may be or become applicable to the Bank's
executive employees including reimbursement for business related expenses and
any other benefits which are commensurate with the responsibilities and
functions to be performed by the Employee under this Agreement.
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6. TERM. The term of employment under this Agreement shall be for the
period commencing January 20, 1993 and ending January 19, 1998, which term, at
the option of the Bank, may be renewed for successive twelve (12) month periods
thereafter unless or until terminated as hereinafter provided. In no case shall
this contract extend beyond the employee's sixty-fifth birthday.
7. NONDEDUCTIBLE COMPENSATION. In the event that any part of the
compensation paid to the Employee under paragraphs 3 and 4 shall be disallowed
by the Internal Revenue Service as a deduction of the Bank under Section 162 of
the Internal Revenue Code of 1954, as the same now exists or as it may be
amended hereafter from time to time, and such disallowance becomes final, the
Employee shall return to the Bank the amount of the disallowed compensation.
The duty of the employee to return the amount of disallowed compensation shall
be a debt payable on demand by the Employee to the Bank, which the Bank may
recover as a set-off against future salaries and bonuses payable under
paragraphs 3 and 4.
8. LOYALTY. The Employee shall devote his full time and best efforts to
the performance of his employment under this Agreement. During the term of this
Agreement, the Employment shall not, at any time or place, either directly or
indirectly, engage in any business or activity in conflict with the business
affairs or interests of the Bank.
9. STANDARDS. The Employee shall perform his duties under this
Agreement in accordance with such standards established from time to time by the
Board of Directors of the Bank.
10. VACATION. At such reasonable times as the Board of Directions shall
in its discretion permit, the Employee shall be entitled, without loss of pay,
to absent himself voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as
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vacation time, provided that:
(a) The Employee shall be entitled to an annual vacation of three
(3) weeks per year;
(b) The time of vacations shall be scheduled in a reasonable
manner by the Board of Directors. The Employee shall not be
entitled to receive any additional compensation from the Bank
on account of his failure to take a vacation; nor shall he be
entitled to accumulate unused vacation time from one fiscal
year to the next;
(c) In addition to the aforesaid paid vacations, the Employee
shall be entitled without loss of pay, to absent himself
voluntarily from the performance of his employment with the
Bank for additional periods of time and for such valid and
legitimate reasons as the Board of Directors in its discretion
may determine. Further, the Board of Directors shall be
entitled to grant to the Employee a leave or leaves of absence
with or without pay at such time or times and upon such terms
and conditions as the Board in its discretion may determine.
11. TERMINATION OF EMPLOYMENT.
(a) This Agreement may be terminated at any time by decision of
the Board of Directors of the Bank for conduct not constituting termination for
Just Cause, upon thirty (30) days written notice to the Employee, and in that
event, the Bank shall be obligated to continue to pay the Employee his salary,
up to the date of termination date of the then existing term (including any
renewal term) of this Agreement; provided, however, that the employee may give
thirty (30) days written notice of resignation to the Bank, and in that event,
the Bank shall be obligated to continue to pay the employee until the effective
date of the resignation.
(b) This Agreement shall be terminated upon the following
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occurrences:
(i) The death of the Employee during the term of this
Agreement, in which event the Employee's estate shall be
entitled to receive the salary due the Employee through
the last day of the calendar month in which his death
shall have occurred.
(ii) Conduct constituting termination for Just Cause at any
time during the term (including any renewal term) of
this Agreement, in which event the Bank shall be
obligated only to continue to pay the Employee his
salary up to the date of termination. For all purposes
of this Agreement, "termination for Just Cause" shall
mean termination for personal dishonesty, incompetence,
willful misconduct, breach of a fiduciary duty involving
personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, regulation
(other than a law, rule or regulation relating to a
traffic violation or similar offense), final
cease-and-desist order, or material breach of any
provision of this Agreement.
(iii) Removal of the Employee from office and/or permanent
prohibition from participation in the conduct of the
affairs of the Bank pursuant to an Order issued by the
North Carolina Banking Commission or Federal Deposit
Insurance Corporation under authority of its Rules and
Regulations for Insurance of Accounts in which event the
Bank shall be obligated to continue to pay to Employee
his salary only up to the effective date of such Order,
provided, however, that nothing contained in this
subparagraph (iii) shall affect any of the vested rights
of the parties hereto.
(iv) Default of the Bank, as defined by G. S. 53-19, as
amended, to mean that the Commissioner of Banks has taken
possession of the business and property of said bank. In
the event of a default as described herein, the Bank
shall be obligated only to continue to pay to Employee
his salary up to the date of such default provided,
however, that nothing contained in this subparagraph (iv)
shall affect any of the vested rights of the parties
hereto.
12. SUSPENSION OF EMPLOYMENT.
(a) The suspension of the Employee from office and/or
temporary prohibition from participation in the conduct of the affairs of the
Bank pursuant to notice served by the North Carolina Commissioner of Banks or
the Federal Deposit Insurance Corporation under authority of its Rules and
Regulations for Insurance of Accounts, unless stayed by appropriate proceedings,
shall suspend, as of the date of such service, all obligations
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of the Bank under the terms of this Agreement.
(b) In the event the charges specified in a notice served as
provided in subsection (a) of this paragraph 12 shall be dismissed, the Bank,
shall, in its discretion, (i) pay the Employee all or any part of the
compensation withheld from such Employee pursuant to the suspension of the
Bank's obligations as required in subparagraph (a) of this paragraph and (ii)
reinstate any or all (in whole or in part) of the obligations suspended as
required in subparagraph (a) of this paragraph.
13. DISABILITY. If the Employee shall become disabled or incapacitated
to the extend that he is unable to perform the duties set forth in paragraph 1,
he shall nevertheless continue to receive one hundred percent (100%) of his
compensation under paragraph 3 of this Agreement for a period of thirty (30)
days of his disability, at which time the salary continuation insurance coverage
provided by the Bank will become effective. Upon returning to active full-time
employment, the Employee's full compensation as set forth in paragraphs 3 and 4
of this agreement shall be reinstated. In the event that said Employee returns
to active employment on other than a full-time basis, then his compensation (as
set forth in paragraph 3 of this Agreement) shall be reduced in proportion to
the time spent in said employment. However, if he is again unable to perform the
duties as set forth in paragraph 1 due to illness or other incapacity, he must
have been engaged in active full-time employment for at least twelve (12)
consecutive months (exclusive of vacations and leaves of absence) immediately
prior to such later absence or inability in order to qualify for the full or
partial continuance of his salary under this paragraph 13.
14. NO ASSIGNMENTS. This Agreement is personal to each of the parties
hereto, and neither party may assign of delegate any of its rights or
obligations hereunder without first obtaining the written consent of the
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other party.
15. AMENDMENTS. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
16. APPLICABLE LAW. This Agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of North Carolina. Whenever reference is made to the Internal
Revenue Code or any section thereof, such reference shall be construed to mean
the Internal Revenue Code of 1954, as amended, or such section thereof, as the
case may be, as heretofore or hereafter amended or supplemented or as superseded
by laws of similar effect.
17. PARAGRAPH HEADINGS. The paragraph headings used in the Agreement are
included solely for convenience and shall not affect, or be used in connection
with, the interpretation of this Agreement.
18. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.
BANK OF UNION
BY: /s/ Xxxxx X. XxXxxxx
Exec. V.P.
(title)
(corporate seal)
ATTEST:
/s/ Xxxxx X. Xxxxxx /s/ H. Xxxxx Xxxxxxx (SEAL)
Asst. Secretary Employee
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STATE OF NORTH CAROLINA
COUNTY OF UNION
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 is made and entered into this the 31st day of
August, 1995 by and between BANK OF UNION, a banking corporation duly organized
and existing under the laws of North Carolina (hereinafter called the "Bank")
and H. XXXXX XXXXXXX, President and Chief Executive Officer of the Bank
(hereinafter called the "Employee");
WITNESSETH:
WHEREAS, the Bank and the Employee entered into an Employment Agreement
dated January 20, 1993 (the "Agreement") providing for the employment of the
Employee with the Bank as President and Chief Executive Officer; and
WHEREAS, the parties desire by this Amendment No. 1 to amend the
compensation as set forth in Section 3 and the term as set forth in Section 6 of
the Employment Agreement; and
WHEREAS, the Board of Directors has considered the long term effects of
such Amendment No. 1 and believes that such Amendment No. 1 to be in the best
interests of the Bank.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL PREMISES AND
OTHER VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Section 3 of the Employment Agreement dated January 20, 1993 is
hereby amended by replacing the rate of salary of $82,000 per anum with the rate
of salary of $125,000 per anum. All other parts of Section 3 remain unchanged.
2. Section 6 of the Agreement dated January 20, 1993 by and between the
Bank and the Employee is hereby amended by replacing Section 6 as set forth
therein in its entirety with the following:
"6. TERM. The term of employment under this Agreement shall be
for the period commencing August 31, 1995 and ending March 31,
2000, unless or until terminated as hereinafter provided."
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1
under seal and in such form as to be binding as of the day and year first
hereinabove written.
BANK OF UNION
BY: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Chairman
ATTEST:
/s/ Xxxxx X. XxXxxxx
Secretary
[SEAL]
EMPLOYEE
/s/ H. Xxxxx Xxxxxxx
H. Xxxxx Xxxxxxx
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