Exhibit 10.3
NOTICE: THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO SECTION
15-48-10 OF THE S.C. CODE OF LAWS 1976 (AS AMENDED).
STATE OF SOUTH CAROLINA,
EMPLOYMENT AGREEMENT
COUNTY OF ORANGEBURG.
THIS AGREEMENT, dated and effective this 10th day of November, 1998,
between First National Corporation, a corporation organized and existing under
the laws of the State of South Carolina (the "Corporation"), and Xxxxxx X. Xxxx
(the "Executive").
WHEREAS, the Corporation desires to employ the Executive;
WHEREAS, Executive desires to be employed by the Corporation on the
terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in
consideration of mutual covenants contained herein, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
do mutually agree as follows:
1. Employment and Term. The Corporation will employ Executive, and
Executive will be employed by the Corporation for a period beginning November
____, 1998, and ending November _____, 2001. After the expiration of the above
term the Executive, if still in the employment of the Corporation, shall become
an employee at-will.
2. Duties. Executive shall at all times faithfully and diligently
perform his obligations under this Agreement and act in the best interests of
the Corporation and its affiliated companies. Executive's duties hereunder shall
be to act in such office or capacity as the Corporation may direct or change
from time to time; however, no change shall involve a material reduction in
duties or responsibility unless written notice is provided at least thirty (30)
days before such change shall become effective, and Executive shall perform all
duties necessary or advisable in order to carry out such functions in an
efficient manner. Executive shall at all times devote his full time, best
efforts and ability, skill, and attention exclusively to the furtherance of the
business objectives and interests of the Corporation and its affiliated
companies, all to the exclusion of other employers or interests or their
products and services. Executive shall not engage in any gainful employment
other than under this Agreement during its term without the prior written
consent of the Corporation's Board of Directors, provided however, that
Executive may buy or sell investments and securities for his personal account.
3. Compensation.
(a) Compensation. For services rendered by Executive
hereunder, the Corporation shall pay Executive a salary of $10,000.00 per month
provided, however, that the Executive's salary may be increased by the Board of
Directors of the Corporation or the Committee (as described in paragraph 7) in
its discretion.
(b) A one time relocation allowance of $10,000.00 payable by
proration within 30 days of the purchase by Executive of a home within ten miles
of Rock Hill, South Carolina.
(c) Corporation shall pay to Executive the actual cost of
moving his home from Columbia, South Carolina to Rock Hill, South Carolina, in
an amount not to exceed $6,000.00.
(d) Corporation agrees to a one time payment of the real
estate commission (up to 7%) on the sale of Executive's home in Columbia, South
Carolina. If Executive's home does not sell within 120 days from the original
listing, Corporation agrees to purchase the home based upon an average of two
appraisals one which would be selected by Executive and one selected by
Corporation. If the two appraisals are more than 10% apart, Executive and
Corporation would agree upon a third appraiser. The amount paid by Corporation
under such circumstances would be the average of all three appraisals.
(e) Reimbursement of Expenses. The Corporation shall in
accordance with Corporation's policy pay or reimburse Executive for all
reasonable travel and other expenses incurred by Executive in performing his
obligations under this Agreement.
(f) Executive shall be entitled to such insurance, pension,
profit-sharing or bonus programs as are or may be available generally to senior
officers of the Corporation's subsidiary National Bank of York County.
(g) Executive will be considered by the Corporation or
appropriate committees of the Corporation under the Corporation's 1996 Stock
Option Plan. Levels of participation in the plan are solely within the
discretion of the committee administering the plan or the Board of Directors of
the Corporation.
(h) Executive shall be entitled to reasonable time off for
sick leave, bereavement leave, jury duty and military obligations as are or may
become available to senior officers of the Corporation, and up to three (3)
weeks of vacation, or as may be provided for in the Corporation's vacation
schedule, during each year of employment during the contract period.
(i) Corporation will pay on behalf of Executive the dues for
the Executive required to maintain membership in the Country Club of Rock Hill.
(j) Corporation will provide to Executive an automobile to be
used by Executive in performing his duties hereunder.
4. Executive's Responsibility. Executive at the beginning of employment
with the Corporation shall be named as President and Chief Executive Officer of
National Bank of York County, Rock Hill, South Carolina.
5. Termination. Employment may be terminated under any of the
following provisions:
(a) The employment of the Executive under this Agreement may
be terminated without cause or reason by the Board or Committee of the
Corporation. In the event of termination under this paragraph, Corporation
shall pay to the Executive his then current salary, as described in Paragraph
3(a), (exclusive of the other employee benefits) for the remainder of the three
year period of this Agreement ending November ____, 2001.
(b) The employment of the Executive under this Agreement may
be terminated by the Executive for whatever reason with or without cause upon
thirty (30) days written notice. In the event of such termination by the
Executive, Executive shall be entitled to no compensation or benefits under this
Agreement upon the termination of his employment.
(c) The employment of the Executive under this Agreement may
be terminated by the Board or Committee of the Corporation upon notice in
writing if the Executive has been unable to discharge the duties and obligations
hereunder by reason of illness, accident or disability for a period of six (6)
consecutive months.
(d) The employment of the Executive under this Agreement may
be terminated immediately by the Board or Committee of the Corporation if the
Board or Committee finds that the Executive shall have (i) been guilty of a
material or willful breach of the terms of this Agreement, (ii) demonstrated
gross negligence, impropriety or willful misconduct in the execution of his
duties, (iii) has been charged or convicted of a felony or other serious crime,
(iv) participated in conduct in violation of any federal or state statute, rule
or regulation, or (v) participated in conduct in violation of any policy
(including but not limited to ethical policy) of the Corporation or any of its
subsidiaries or which materially interferes with the performance of Executive's
duties hereunder. All future compensation and benefits, not then accrued, will
automatically terminate if Executive is terminated under this paragraph.
(e) The employment of Executive under this Agreement shall be
automatically terminated on the date of the Executive's death.
(f) As set forth in Paragraph 1, Executive shall, if still
employed by the Corporation after November ____, 2001, become an employee
at-will; provided however, that in the event the Executive's employment is
terminated by the Corporation for reasons other than through death, disability
or reasons set forth in Paragraph 5(d) above and said termination occurs
following a sale or merger below defined, Executive shall be paid his then
current salary as described in Paragraph 3(a) (exclusive of other employee
benefits) for a period of three years from the date of termination or until
November ____, 2004, whichever period is shorter. Prior to November ____, 2004
the Corporation through the Board or Committee shall consider in its discretion
an extension of the provisions of the preceding sentence beyond November ____,
2004, based on Executive's performance and/or other factors it deems relevant. A
sale or merger of the Corporation is defined for the purpose of this agreement
as a sale or merger of 50% or more of the shares of First National Corporation
wherein First National Corporation is not the surviving entity.
6. Post-Termination Obligations. All payments and benefits to Executive
under this Agreement shall be subject to Executive's compliance with the
following provisions during the term of this Agreement and for one full year
after the termination of Executive's employment regardless of whether such
termination occurs after November _____, 2001.
(a) Assistance in Litigation. Executive shall, upon reasonable
notice, furnish such information and proper assistance to the Corporation as may
reasonably be required by the Corporation in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.
(b) If termination is pursuant to Paragraphs 5(a) or 5(f), the
Executive is under an affirmative duty to actively seek and accept comparable
alternative employment following his termination. Any compensation received by
Executive following termination or compensation earnable with reasonable
diligence will be deducted from any further compensation due the Executive under
this Agreement. In the event Executive fails to seek comparable alternative
employment, the Corporation's obligations to pay future compensation and for
benefits continuation shall cease.
(c) Confidential Information. Executive acknowledges that
in the course of his employment he will acquire knowledge of trade and business
secrets and other confidential data of the Corporation, its subsidiaries and any
affiliated companies. Such trade and business secrets and other confidential
data may include, but are not limited to, confidential product information,
methods by which the Corporation proposes to compete with its business
competitors, strategic plans, confidential reports prepared by business
consultant(s) and similar information relating to the Corporation's, its
subsidiaries' or its affiliated companies' products, customers, and operations.
Executive covenants not to knowingly disclose or reveal to any unauthorized
person such confidential business secrets or other confidential data both during
the term of this Agreement and at all times following this termination.
Executive recognizes that the possible restrictions on his activities are
required for the reasonable protection of the Corporation.
(d) Covenants For Protection of the Corporation. During the
term of this Agreement and for a period of eighteen (18) months following the
termination of Executive's employment (regardless of whether such termination
occurs after November _____, 2001) separately covenants for the benefits of the
Corporation as follows:
(i) Executive shall not, directly or indirectly, promote,
participate or engage in any activity or business which is
in competition with the business of the Corporation, or any
of its subsidiaries and affiliated companies, including but
not limited to commercial banking, lending, and other
similar activities or services, whether directly or
indirectly (as a director, shareholder or investor, partner,
lessor, lessee, proprietor, principal agent, independent
contractor, representative, consultant, or otherwise),
within the existing market(s), [as defined in Paragraph
11(e)]. Ownership by Executive of 5% or less of the
outstanding capital stock of any corporation which is
actively publicly traded will not be a violation of this
covenant.
(ii) To the extent that Executive's duties have caused him to
have direct contacts with customers of the Corporation on a
frequent and recurring basis, Executive covenants not to
engage in any of the activities listed in clause (i) of this
paragraph within the existing market(s) [as defined in
Paragraph 11(e)].
(iii) Executive covenants that he will not employ or assist
others by active solicitation to recruit and employ
employees of the Corporation or any subsidiaries and
affiliate companies; and
(iv) Executive agrees that he will not, directly or indirectly,
on behalf of himself or any third party, make any sales
contacts with, or actively solicit business from any
customer of the Corporation or its subsidiaries and
affiliate companies, for any products or services
competitive with those offered by the Corporation or its
affiliated companies within the existing market(s) [as
defined in Paragraph 11(e)].
(e) It is further understood and agreed that the Corporation's
right to require Executive to keep confidential information secret or not to
compete against the Corporation for the agreed upon period shall not be in lieu
of the Corporation's right to monetary damages in the event Executive is in
breach of any obligation contained in this Agreement, and that in the event of a
breach of this Agreement Corporation may either, with or without pursuing any
action for damages, obtain and enforce an injunction prohibiting Executive from
violating said covenants.
(f) The parties hereby agree that all restrictions are
reasonable in nature, designed to reasonably protect the Corporation's interest
and do not violate public policy.
7. Decisions by Corporation. Any powers granted to the Board hereunder
may be exercised by a committee appointed by the Board (the "Committee"), and
such Committee, if appointed, shall have general responsibility for the
administration and interpretation of this Agreement including determinations of
compensation.
8. Arbitration. Executive and Corporation agree that any claim,
action, or controversy arising out of or relating to this Agreement, or breach
thereof, shall be settled pursuant to the Uniform Arbitration as codified in
Section 15-48-10, et. seq. of the South Carolina Code of Laws 1976, as amended,
and any judgment upon an award rendered by arbitrators shall be entered as
provided therein. The agreement to arbitrate any such claim is only an agreement
to have it resolved by arbitration and should not be construed as a waiver of
any legal right, entitlement, or remedy.
9. Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties with reference to the employment of the
Executive, and supersedes any prior employment agreement, understanding or
arrangement between the Executive and the Corporation, its subsidiaries and
affiliates.
10. Consolidation, Merger, or Sale of Assets. Nothing in this Agreement
shall preclude the Corporation from consolidating or merging into or with, or
transferring all or substantially all of its assets to another corporation which
assumes this Agreement and all obligations and undertakings of the Corporation
hereunder. Upon such a consolidation or merger, Corporation as described herein
shall mean such other corporation, and this Agreement shall continue in full
force and effect.
11. General provisions.
(a) Non-assignability. Neither this Agreement nor any right or
interest hereunder shall be assignable by Executive, his beneficiaries, or legal
representatives without the Corporation's prior written consent; provided, that
nothing in this paragraph shall preclude the executors, administrators, or other
legal representatives of Executive or his estate from assigning any rights
hereunder to the person or persons entitled thereto.
(b) No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge of
hypothecation or to execution, attachment, levy or similar process or assignment
by operation of law, and any attempt, voluntary or involuntary, to effect any
such action shall be null, void and of no effect.
(c) Binding Effect. This Agreement shall be binding upon, and
inure to the benefit of, Executive and the Corporation and their respective
successors and assigns.
(d) Notice. For purposes of this Agreement, written notice
shall be effective if personally delivered or if sent by certified mail, return
receipt requested, to Executive's last known home address or other address as
specified by Executive. Executive is under an affirmative duty to notify the
Corporation regarding subsequent changes of address. For purpose of computing
time, all time requirements under this Agreement will start on the date mailed
or if personally delivered, when delivered.
(e) Existing market. "Existing market" under this agreement
shall mean the counties in which the Corporation's subsidiary, National Bank of
York County, has offices or is located and doing business on the date of
Executive's termination of employment.
12. Modification and Waiver.
(a) Amendment of Agreement. This Agreement may not be modified
or amended except by an instrument in writing signed by the parties hereto.
(b) Waiver. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term and condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than that specifically waived.
13. Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.
14. Governing Law. This Agreement has been executed and delivered in
the State of South Carolina, and it validity, interpretation, performance and
enforcement shall be governed by the laws of such state.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above stated.
FIRST NATIONAL CORPORATION
--------------------------- BY /s/ C. Xxxx Xxxx, III
Witness --------------------------
C. Xxxx Xxxx, III CEO
---------------------------
Witness
--------------------------- BY: /s/ Xxxxxx X. Xxxx
------------------
Witness Executive
---------------------------
Witness
