NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT NONCOMPETITION, SEVERANCE AND EMPLOYMENT AGREEMENT Between THE SOUTH FINANCIAL GROUP, INC. and JAMES W. TERRY, JR.
Exhibit 10.7
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
NONCOMPETITION,
SEVERANCE AND EMPLOYMENT AGREEMENT
Between
THE SOUTH FINANCIAL GROUP, INC. and XXXXX X. XXXXX, XX.
SEVERANCE AND EMPLOYMENT AGREEMENT
Between
THE SOUTH FINANCIAL GROUP, INC. and XXXXX X. XXXXX, XX.
This Noncompetition, Severance and Employment Agreement (this “Agreement”) is made and entered
into as of this ___ day of ___,2001, by and between Xxxxx X. Xxxxx, Xx., an individual (the
“Executive”), and The South Financial Group, Inc., a South Carolina corporation and financial
institution holding company headquartered in Greenville, South Carolina (the “Company”). As used
herein, the term “Company” shall include the Company and any and all of its subsidiaries where the
context so applies.
W I T N E S S E T H
WHEREAS the Company’s Board of Directors (the “Board”) believes that the Executive has been
instrumental in the past success of the Company;
WHEREAS the Company desires to continue to employ the Executive as President of Carolina First
Bank and in such other capacities as the Executive is currently employed as of the date hereof;
WHEREAS the terms hereof are consistent with the executive compensation objectives of the
Company as established by the Board;
WHEREAS the Executive is willing to accept the employment contemplated herein under the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Employment. Subject to the terms and conditions hereof, the Company hereby employs
the Executive and Executive hereby accepts such employment as President of Carolina First Bank
having such duties and responsibilities as are set forth in Section 3 below.
2. Definitions. For purposes of this Agreement, the following terms shall have the
meanings specified below.
“Cause” shall mean:
(i) In the absence of a Change in Control: (a) fraud; (b) embezzlement; (c)
conviction of the Executive of any felony; (d) a material breach of, or the wilful failure
or
refusal by the Executive to perform and discharge the Executive=s duties,
responsibilities and obligations under this Agreement; (e) any act of moral turpitude or
wilful misconduct by the Executive intended to result in personal enrichment of the
Executive at the expense of the Company, or any of its affiliates or which has a material
adverse impact on the business or reputation of the Company or any of its affiliates (such
determination to be made by the Board in its reasonable judgment); (f) intentional material
damage to the property or business of the Company; (g) gross negligence; or (h) the
ineligibility of the Executive to perform his duties because of a ruling, directive or other
action by any agency of the United States or any state of the United States having
regulatory authority over the Company.
(ii) After a Change in Control: (a) material criminal fraud, (b) gross negligence, (c)
material dereliction of duties, (d) intentional material damage to the property or business
of the Company, or (e) the commission of a material felony, in each case, as determined in
the reasonable discretion of the Board, but only if (1) the Executive has been provided with
written notice of any assertion that there is a basis for termination for cause which notice
shall specify in reasonable detail specific facts regarding any such assertion, (2) such
written notice is provided to the Executive a reasonable time before the Board meets to
consider any possible termination for cause, (3) at or prior to the meeting of the Board to
consider the matters described in the written notice, an opportunity is provided to the
Executive and his counsel to be heard before the Board with respect to the matters described
in the written notice, (4) any resolution or other Board action held with respect to any
deliberation regarding or decision to terminate the Executive for cause is duly adopted by a
vote of a majority of the entire Board of the Company at a meeting of the Board called and
held and (5) the Executive is promptly provided with a copy of the resolution or other
corporate action taken with respect to such termination. No act or failure to act by the
Executive shall be considered wilful unless done or omitted to be done by him not in good
faith and without reasonable belief that his action or omission was in the best interests of
the Company. The unwillingness of the Executive to accept any or all of a change in the
nature or scope of his position, authorities or duties, a reduction in his total
compensation or benefits, a relocation that he deems unreasonable in light of his personal
circumstances, or other action by or upon request of the Company in respect of his position,
authority, or responsibility that he reasonably deems to be contrary to this Agreement, may
not be considered by the Board to be a failure to perform or misconduct by the Executive.
“Change in Control” shall mean:
(i) The acquisition, directly or indirectly, by any Person of securities of the Company
(not including in the securities beneficially owned by such Person any securities acquired
directly from the Company) representing an aggregate of 20% or more of the combined voting
power of the
Company=s then outstanding voting securities other than an acquisition
by:
| (A) | any employee plan established by the Company; | ||
| (B) | the Company or any of its affiliates (as defined in Rule 12b-2 promulgated under the Exchange Act); |
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| (C) | an underwriter temporarily holding securities pursuant to an offering of such securities; | ||
| (D) | a corporation owned, directly or indirectly, by stockholders of the Company in substantially the same proportions as their ownership of the Company; or | ||
| (E) | merger, consolidation, or similar transaction of the Company with any other corporation which is duly approved by the stockholders of the Company; |
(ii) During any period of up to two consecutive years, individuals who, at the
beginning of such period, constitute the Board cease for any reason to constitute at least a
majority thereof, provided that any person who becomes a director subsequent to the
beginning of such period and whose nomination for election is approved by at least
two-thirds of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so approved
(other than a director (A) whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act, or
(B) who was designated by a Person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii) or (iv) hereof) shall be deemed a
director as of the beginning of such period;
(iii) The stockholders of the Company approve a merger or consolidation of the Company
with any other corporation other than (A) a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of any Company,
at least 51% of the combined voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a recapitalization of
the Company (or similar transaction) in which no Person is or becomes the beneficial owner
(as defined in clause (i) above), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities acquired
directly from the Company) representing 25% or more of the combined voting power of the
Company=s then outstanding voting securities; or (C) a plan of complete liquidation of
the Company or an agreement for the sale or disposition of the Company of all or
substantially all of the Company=s assets; or
(iv) The occurrence of any other event or circumstance which is not covered by (i)
through (iii) above which the Board determines affects control of the Company and, in order
to implement the purposes of this Agreement as set forth above, adopts a resolution that
such event or circumstance constitutes a Change in Control for the purposes of this
Agreement.
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“Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor statute,
rule or regulation of similar effect.
“Confidential Information” shall mean all business and other information relating to
the business of the Company, including without limitation, technical or nontechnical data,
programs, methods, techniques, processes, financial data, financial plans, product plans, and lists
of actual or potential customers, which (i) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means by, other Persons,
and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy or confidentiality. Such information and compilations of information shall be contractually
subject to protection under this Agreement whether or not such information constitutes a trade
secret and is separately protectable at law or in equity as a trade secret. Confidential
Information does not include confidential business information which does not constitute a trade
secret under applicable law two years after any expiration or termination of this Agreement.
“Disability” or “Disabled” shall mean the Executive’s inability as a result of physical or
mental incapacity to substantially perform his duties for the Company on a full-time basis, with or
without accommodation, for a period of six (6) months.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Involuntary Termination” shall mean the termination of Executive’s employment by the
Executive following a Change in Control which, in the sole judgment of the Executive, is due to (i)
a change of the Executive’s responsibilities, position (including status as President of Carolina
First Bank, its successor or ultimate parent entity, office, title, reporting relationships or
working conditions), authority or duties (including changes resulting from the assignment to the
Executive of any duties inconsistent with his positions, duties or responsibilities as in effect
immediately prior to the Change in Control); or (ii) a change in the terms or status (including the
rolling three year termination date) of this Agreement; or (iii) a reduction in the Executive’s
compensation or benefits; or (iv) a forced relocation of the Executive outside the Greenville,
South Carolina metropolitan area; or (v) a significant increase in the Executive’s travel
requirements.
“Person” shall mean any individual, corporation, bank, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or other entity.
“Voluntary Termination” shall mean the termination by Executive of Executive’s employment
following a Change in Control which is not the result of any of clauses (i) through (v) set forth
in the definition of Involuntary Termination above.
3. Duties. During the Term hereof, the Executive shall have such duties and
authority as are typical of a president of a bank such as Carolina First Bank, including, without
limitation, those specified in the Company’s Bylaws. Executive agrees that during the Term hereof,
he will devote his full time, attention and energies to the diligent performance of his duties.
Executive shall not, without the prior written consent of the Company, at any time during the Term
hereof (i) accept employment with, or render services of a business, professional or commercial
nature to, any Person other than the Company, (ii) engage in any venture or activity which the
Company may in good faith
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consider to be competitive with or adverse to the business of the Company or of any affiliate of the Company,
whether alone, as a partner, or as an officer, director, employee or shareholder or otherwise,
except that the ownership of not more than 5% of the stock or other equity interest of any publicly
traded corporation or other entity shall not be deemed a violation of this Section, or (iii) engage
in any venture or activity which the Board may in good faith consider to interfere with Executive’s
performance of his duties hereunder.
4 Term. Unless earlier terminated as provided herein, the Executive’s employment
hereunder shall be for a rolling term of three years (the “Term”) commencing on the date hereof.
This Agreement shall be deemed to extend each month for an additional month automatically without
any action on behalf of either party hereto; provided, however, that either party may, by written
notice to the other, cause this Agreement to cease to extend automatically and upon such notice,
the ATerm@ of this Agreement shall be the three years following the date of such
notice, and this Agreement shall terminate upon the expiration of such Term.
5. Termination. This Agreement may be terminated as follows:
5.1 The Company. The Company shall have the right to terminate Executive’s
employment hereunder at any time during the Term hereof (i) for Cause, (ii) if the Executive
becomes Disabled, (iii) upon the Executive’s death, or (iv) without Cause.
5.1.1 If the Company terminates Executive’s employment under this Agreement
pursuant to clauses (i), (ii) or (iii) of Section 5.1, the Company’s obligations
hereunder shall cease as of the date of termination; provided, however, if Executive
is terminated for Cause after a Change in Control, then such termination shall be
treated as a Voluntary Termination as contemplated in and subject to the terms of
Section 5.2.3 below.
5.1.2 If the Company terminates Executive pursuant to clause (iv) of Section
5.1 and there has been a Change in Control, Executive shall be entitled to receive
immediately as severance upon such termination, aggregate compensation and benefits
provided in Section 6 equal to three times Executive’s annual compensation being
paid at the time of termination. If the Company terminates Executive pursuant to
clause (iv) of Section 5.1 and in the absence of a Change in Control, Executive
shall be entitled to receive immediately in a lump sum as severance upon such
termination, an amount equal to the compensation and benefits that would otherwise
be provided to Executive in Section 6 hereof for the remaining Term of this
Agreement. For purposes of determining compensation which is not fixed (such as a
bonus), the annual amount of such unfixed compensation shall be deemed to be equal
to the average of such compensation over the three year period immediately prior to
the termination.
5.1.3 In the event of such termination pursuant to clause (iv) of
Section 5.1, (A) all rights of Executive pursuant to awards of share grants or
options granted by
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the Company shall be deemed to have vested and shall be released from all
conditions and restrictions, except for restrictions on transfer pursuant to the
Securities Act of 1933, as amended, and (B) the Executive shall be deemed to be
credited with service with the Company for such remaining Term for the purposes of
the Company’s benefit plans; (C) the Executive shall be deemed to have retired from
the Company and shall be entitled as of the termination date, or at such later time
as he may elect to commence receiving the total combined qualified and non-qualified
retirement benefit to which he is entitled hereunder, or his total non-qualified
retirement benefit hereunder if under the terms of the Company=s qualified
retirement plan for salaried employees he is not entitled to a qualified benefit,
and (D) if any provision of this Section 5.1.3 cannot, in whole or in part, be
implemented and carried out under the terms of the applicable compensation, benefit,
or other plan or arrangement of the Company because the Executive has ceased to be
an actual employee of the Company, because the Executive has insufficient or reduced
credited service based upon his actual employment by the Company, because the plan
or arrangement has been terminated or amended after the effective date of this
Agreement, or because of any other reason, the Company itself shall pay or otherwise
provide the equivalent of such rights, benefits and credits for such benefits to
Executive, his dependents, beneficiaries and estate.
5.2 By Executive. Executive shall have the right to terminate his employment
hereunder if (i) the Company materially breaches this Agreement and such breach is not cured
within 30 days after written notice of such breach is given by Executive to the Company;
(ii) there is a Voluntary Termination; or (iii) there is an Involuntary Termination.
5.2.1 If Executive terminates his employment other than pursuant to clauses
(i), (ii) or (iii) of Section 5.2, the Company’s obligations under this Agreement
shall cease as of the date of such termination.
5.2.2 If Executive terminates his employment hereunder pursuant to clause (i)
of Section 5.2 and there has been a Change in Control, or pursuant to clause (iii)
of Section 5.2, Executive shall be entitled to receive his base salary and other
benefits due him through the termination date, less applicable taxes and other
deductions, and receive immediately in a lump sum as severance, aggregate
compensation and benefits provided in Section 6 equal to three times Executive’s
annual compensation being paid at the time of termination. If the Executive
terminates his employment pursuant to clause (i) of Section 5.2 and in the absence
of a Change in Control, Executive shall be entitled to receive immediately in a lump
sum as severance upon such termination, an amount equal to one times
Executive=s annual compensation being paid at the time of termination. For
purposes of determining compensation which is not fixed (such as a bonus), the
annual amount of such unfixed compensation shall be deemed to be the equal to the
average of such compensation over the three year period immediately prior to the
termination.
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5.2.3 If Executive terminates his employment pursuant to clause (ii) of Section
5.2, Executive shall be entitled to receive his base salary and other benefits due
him through the termination date less applicable taxes and other deductions and
receive immediately in a lump sum as severance aggregate compensation and benefits
provided in Section 6 equal to one times Executive’s annual compensation being paid
at the time of Voluntary Termination. For purposes of determining compensation
which is not fixed (such as a bonus), the annual amount of such unfixed compensation
shall be deemed to be equal to the average of such compensation over the three year
period immediately prior to the termination.
5.2.4 In addition, in the event of such termination pursuant to any of clauses
(i) through (iii) of this Section 5.2, (A) all rights of Executive pursuant to
awards of share grants or options granted by the Company shall be deemed to have
vested and shall be released from all conditions and restrictions, except for
restrictions on transfer pursuant to the Securities Act of 1933, as amended, and (B)
the Executive shall be deemed to be credited with service with the Company for such
remaining Term for the purposes of the Company’s benefit plans, and (C) the
Executive shall be deemed to have retired from the Company and shall be entitled as
of the termination date, or at such later time as he may elect to commence receiving
the total combined qualified and non-qualified retirement benefit to which he is
entitled hereunder, or his total non-qualified retirement benefit hereunder if under
the terms of the Company=s qualified retirement plan for salaried employees he
is not entitled to a qualified benefit, and (D) if any provision of this Section
5.2.4 cannot, in whole or in part, be implemented and carried out under the terms of
the applicable compensation, benefit, or other plan or arrangement of the Company
because the Executive has ceased to be an actual employee of the Company, because
the Executive has insufficient or reduced credited service based upon his actual
employment by the Company, because the plan or arrangement has been terminated or
amended after the effective date of this Agreement, or because of any other reason,
the Company itself shall pay or otherwise provide the equivalent of such rights,
benefits and credits for such benefits to Executive, his dependents, beneficiaries
and estate.
6. Compensation. In consideration of Executive’s services and covenants hereunder,
Company shall pay to Executive the compensation and benefits described below (which compensation
shall be paid in accordance with the normal compensation practices of the Company and shall be
subject to such deductions and withholdings as are required by law or policies of the Company in
effect from time to time, provided that his salary pursuant to Section 6.1 shall be payable not
less frequently than monthly):
6.1 Annual Salary. During the Term hereof, the Company shall pay to Executive
a base established by the Board which for the first year of the Term shall be not less than
the highest annual salary of the Executive for the past three years. Executive’s salary will
be reviewed by the Board at the beginning of each of its fiscal years and, in the sole
discretion of the Board, may be increased for such year; provided, however, that following a
Change in
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Control, the base salary shall be increased annually by a percentage at least equal to
the average annual increase over the past three years.
6.2 Annual Incentive Bonus. During the Term hereof, the Board may pay to
Executive an annual incentive cash bonus in accordance with the terms of the Short Term
Incentive Compensation Plan.
6.3 Long Term Incentive Compensation Plan. During the Term hereof, the
Board may pay to Executive long term incentive cash bonuses in accordance with the Long
Term Incentive Compensation Plan.
6.4 Supplemental Executive Benefit Plan. During the Term hereof, Executive
shall be entitled to participate in The South Financial Group Supplemental Executive Benefit
Plan.
6.5 Stock Options and Restricted Stock. During the Term hereof, the Board
shall grant Executive options to purchase Company Common Stock and restricted stock in
accordance with the terms of the Company’s Long Term Incentive Compensation Plan.
6.6 Other Benefits. Executive shall be entitled to share in any other employee
benefits generally provided by the Company to its most highly ranking executives for so long
as the Company provides such benefits. The Company also agrees to provide Executive with a
Company-paid automobile, reasonable club dues for one country club and two business club(s),
personal tax advisory services, and a $1,000,000 life insurance policy and such disability
insurance as may be purchased by $ per year in premiums. Executive shall also be
entitled to participate in all other benefits accorded general Company employees.
7. Excess Parachute Payments. It is the intention of the parties hereto that the
severance payments and other compensation provided for herein are reasonable compensation for
Executive’s services to the Company and shall not constitute “excess parachute payments” within the
meaning of Section 280G of the Code and any regulations thereunder. In the event that the Company’s
independent accountants acting as auditors for the Company on the date of a Change in Control
determine that the payments provided for herein constitute “excess parachute payments,” then the
compensation payable hereunder shall be reduced to the point that such compensation shall not
qualify as “excess parachute payments.”
8. Confidentiality. Executive shall hold in a fiduciary capacity for the benefit of
the Company all Confidential Information relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its affiliated companies. After termination of
Executive’s employment with the Company, the Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those designated by it.
Upon the termination or expiration of his employment hereunder, Executive agrees to deliver
promptly to the Company all Company files, customer lists, management reports,
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memoranda, research, Company forms, financial data and reports and other documents supplied to or created by him in
connection with his employment hereunder (including all copies of the foregoing) in his possession or
control and all of the Company’s equipment and other materials in his possession or control. In no
event shall an asserted violation of the provisions of this Section 8 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.
9. Noncompetition and Nonsolicitation Agreement. If this Agreement is terminated by
the Company pursuant to Section 5.1(iv), or by Executive pursuant to Section 5.2(i) or Section
5.2.1, Executive shall not enter into an employment relationship or a consulting arrangement with
any other bank, thrift, lending or financial institution of any type headquartered or having a
physical presence in the State of South Carolina, or any county in the States of Florida or North
Carolina in which the Company or its affiliates has a physical presence or conducts business
operations (hereinafter a “competitor”) within three years of the anniversary of the date of the
termination of employment (the “Noncompete Period”). The obligations contained in this Section 9
shall not prohibit Executive from being an owner of not more than 5% of the outstanding stock of
any class of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation. In the event that Executive’s employment is
terminated for any reason following a Change in Control (whether by the Company or Executive), it
is expressly acknowledged that there shall be no limitation on any activity of Executive, including
direct competition with the Company or its successor, and Company shall not be entitled to
injunctive relief with respect to any such activities of Executive.
9.1 During the Noncompete Period, Executive shall not directly or indirectly through
another entity, including but not limited to a competitor, (i) induce or attempt to induce
any employee of Company to leave the employ of Company or in any way interfere with the
relationship between Company and any employee thereof, (ii) hire any person who was an
employee of Company or any subsidiary at any time during the time that Executive was
employed by Company, or (iii) induce or attempt to induce any customer, supplier, or other
entity in a business relation with Company to cease doing business with Company, or in any
way interfere with the relationship between any such customer, supplier, or business
relation and Company or do business with a competitor.
9.2 If, at the time of enforcement of this Section 9, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive agrees that the restrictions contained in this
Section 9 are reasonable.
9.3 In the event of the breach or a threatened breach by Executive of any of the
provisions of this Section 9, Company, in addition and supplementary to other rights and
remedies existing in its favor, may apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce
or prevent any violations of the provisions hereof (without posting a bond or other
security). In
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addition, in the event of an alleged breach or violation by Executive of this
Section 9, the Noncompete Period shall be tolled until such breach or violation has been
duly cured.
10. Trust. The Company shall establish an irrevocable trust to fund the
maximum amount of obligations which could reasonably be expected to become payable hereunder under
any circumstances (which may be a “rabbi trust” if so requested by Executive), which trust (i)
shall have as trustee an individual acceptable to Executive, (ii) shall be fully funded upon the
earlier of a Change in Control or the approval of any regulatory application filed by a potential
acquiror of the Company seeking to acquire control of the Company, and (iii) shall contain such
other terms and conditions as are reasonably necessary in Executive’s determination to ensure the
Company’s compliance with its obligations hereunder.
11. Assignment. The parties acknowledge that this Agreement has been entered into due
to, among other things, the special skills of Executive, and agree that this Agreement may not be
assigned or transferred by Executive, in whole or in part, without the prior written consent of
Company.
12. 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 the Company: | The South Financial Group, Inc. Poinsett Plaza 000 Xxxxx Xxxx Xxxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 Attn: Xxxxxxx X. Hummers, III |
|||
| To Executive: | Xxxxx X. Xxxxx, Xx. 000 Xxxxxxxxx Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 |
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.
13. Provisions Severable. 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.
14. Remedies in the Absence of a Change in Control. The terms of this Section 14 will
apply in the absence of a Change in Control.
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14.1 The Executive acknowledges that if he breaches or threatens to breach his
covenants and agreements in this Agreement, such actions may cause irreparable harm and
damage to the Company which could not be compensated in damages. Accordingly, if
Executive breaches or threatens to breach this Agreement, the Company shall be entitled
to injunctive relief, in addition to any other rights or remedies of the Company.
14.2 All claims, disputes and other matters in question between the Executive
and the Company arising out of or related to the interpretation of this Agreement or the
breach of this Agreement, except as specifically governed by the foregoing provisions where
there may be irreparable harm and damage to the Company which could not be compensated in
damages, shall be decided by arbitration in accordance with the rules of the American
Arbitration Association. This agreement to arbitrate shall be specifically enforceable under
applicable law in any court having jurisdiction. The award rendered by the arbitrator shall
be final and judgment may be entered upon it in accordance with the applicable law of any
court having jurisdiction thereof.
14.3 In the event that the Executive is reasonably required to engage legal counsel to
enforce his rights hereunder against the Company, Executive shall be entitled to receive
from the Company his reasonable attorneys= fees and costs; provided that Executive
shall not be entitled to receive those fees and costs related to matters, if any, which were
the subject of litigation and with respect to which a judgment is rendered against
Executive.
15. Remedies in the Event of a Change in Control. The terms of this Section 15 shall
apply in the event of a Change of Control.
15.1 The Executive acknowledges that if he breaches or threatens to breach his
covenants and agreements in this Agreement, such actions may cause irreparable harm and
damage to the Company which could not be compensated in damages. Accordingly, if Executive
breaches or threatens to breach this Agreement, the Company shall be entitled to injunctive
relief, in addition to any other rights or remedies of the Company. All claims, disputes and
other matters in question between the Executive and the Company arising out of or related to
the interpretation of this Agreement or the breach of this Agreement shall be decided under
and governed by the laws of the State of South Carolina.
15.2 The Company is aware that upon the occurrence of a Change in Control, the
Board or a stockholder of the Company may then cause or attempt to cause the Company to
refuse to comply with its obligations under this Agreement, or may cause or attempt to cause
the Company to institute, or may institute, litigation seeking to have this Agreement
declared unenforceable, or may take, or attempt to take, other action to deny the Executive
the benefits intended under this Agreement. In these circumstances, the purpose of this
Agreement could be frustrated. It is the intent of the parties that the Executive not be
required to incur the legal fees and expenses associated with the protection or enforcement
of his rights under this Agreement by litigation or other legal action because such costs
would substantially detract from the benefits intended to be extended to the Executive
hereunder, nor be bound to negotiate any settlement of his rights hereunder under threat of
incurring such costs. Accordingly, if at any time after a Change of Control, it should
appear to the Executive that
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the Company is or has acted contrary to or is failing or has
failed to comply with any of its obligations under this Agreement for the reason that it
regards this Agreement to be void or unenforceable or for any other reason, or that the
Company has purported to terminate his
employment for cause or is in the course of doing so in either case contrary to this
Agreement, or in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation or other legal action
designed to deny, diminish or to recover from the Executive the benefits provided or
intended to be provided to him hereunder, and the Executive has acted in good faith to
perform his obligations under this Agreement, the Company irrevocably authorizes the
Executive from time to time to retain counsel of his choice at the expense of the Company to
represent him in connection with the protection and enforcement of his rights hereunder,
including without limitation representation in connection with termination of his employment
contrary to this Agreement or with the initiation or defense of any litigation or other
legal action, whether by or against the Executive or the Company or any director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction. The reasonable
fees and expenses of counsel selected from time to time by the Executive as hereinabove
provided shall be paid or reimbursed to the Executive by the Company on a regular, periodic
basis upon presentation by the Executive of a statement or statements prepared by such
counsel representing other officers or key executives of the Company in connection with the
protection and enforcement of their rights under similar agreements between them and the
Company, and, unless in his sole judgment use of common counsel could be prejudicial to him
or would not be likely to reduce the fees and expenses chargeable hereunder to the Company,
the Executive agrees to use his best efforts to agree with such other officers or executives
to retain common counsel.
16. 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.
17. Amendments and Modifications. This Agreement may be amended or modified only by a
writing signed by other parties hereto.
18. Entire Agreement. This Agreement contains the complete agreement concerning the
employment of Executive by the Company and shall supercede all other agreements, whether written or
oral, related to the Executive=s employment by the Company.
19. Governing Law. The validity and effect of this agreement shall be governed by and
construed and enforced 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.
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| EXECUTIVE | ||||||
| /s/ Xxxxx X. Xxxxx, Xx. | ||||||
| Xxxxx X. Xxxxx, Xx. | ||||||
| THE SOUTH FINANCIAL GROUP, INC. | ||||||
| By: | /s/ Xxxxxxx X. Hummers III | |||||
| Title: | ||||||
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