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EXHIBIT 10.10
EMPLOYMENT AGREEMENT BETWEEN COMMUNITY BANK & TRUST COMPANY
AND XXXXXX X. XXXXXXX
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by
and between Xxxxxx X. Xxxxxxx, a resident of Grover, North Carolina (the
"Employee") and Community Bank & Trust Co. (the "Bank") as of June 4, 1998, to
be effective upon the effective time (the "Effective Time") of the merger (the
"Merger") provided in that Agreement and Plan of Merger ("Merger Agreement")
between Carolina First Bancshares, Inc. (the "Company") and the Bank of even
date herewith (the "Merger Agreement").
WHEREAS, the Company desires to employ the Employee pursuant to this
Employment Agreement with Employee, upon the terms and conditions herein set
forth upon the Effective Time of the Merger and thereafter, and the Employee
desires to provide the services described herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are mutually acknowledged, the parties hereto,
intending legally to be bound, agree as follows:
Section 1. Term of Employment. The Bank and Employee hereby agree that
Employee shall continue to be employed by the Bank under the terms of this
Agreement as of the Effective Time, and shall remain employed by the Bank
through the third anniversary of the Effective Time, unless sooner terminated
pursuant to the terms hereof (the "Employment Period"). The foregoing
notwithstanding, nothing contained herein is intended to prevent the
continuation of the Employee's employment beyond such term, upon the mutual
agreement of the Employee and the Bank.
Section 2. Duties of Employee.
(a) Subject to the supervision and pursuant to the direction
of the Board of Directors of the Bank, Employee shall perform his
assigned duties as President and Chief Executive Officer of Bank and
shall perform such other duties as are customarily performed by one
holding such positions in similar businesses or enterprises as that
engaged in by the Bank. Employee shall, at the direction of the Board
of Directors of the Bank, serve in such other executive capacities with
various subsidiaries of the Bank as the Board of Directors may
determine.
(b) Employee agrees that he will at all times faithfully,
industriously, and to the best of his ability, experience and talents,
perform all of the duties that may be reasonably required of and from
him pursuant to the reasonable satisfaction of the Bank's Board of
Directors. Such duties shall be rendered at Bank's offices in Marion,
North Carolina, and at such other place or places as the interests,
needs, business and opportunities of Bank shall reasonably require or
make advisable.
(c) Employee hereby agrees to refrain from engaging in any
ventures or enterprises which are reasonably likely to materially
interfere with the performance of his express and implied duties
hereunder. Employee shall at all times conduct himself in a manner that
will promote the interests of Bank and its affiliates.
Section 3. Company's Rights to Benefits of Work Performed. The Bank and
the Company shall be entitled to all of the benefits, emoluments, and profits
arising from or incident to any and all work, services, and advice of the
Employee performed or rendered in the course of Employee's employment hereunder.
Section 4. Compensation, Expenses and Benefits.
(a) Upon the Effective Time, the Bank shall pay the Employee a
transition bonus of $105,000. Following Closing, the Bank shall pay
Employee, as an additional transition bonus, $8,781.25 in equal monthly
amounts through the first anniversary of the Effective Time, and
Employee shall accept from Bank, during the Employment Period, and in
consideration for the services to be performed by
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Employee, a salary at the rate of not less than $92,500.00 per annum
(the "Annual Salary"), less deductions required by law and Employee
authorized deductions, payable in such equal periodic installments as
the Bank's Board of Directors may determine, but not less frequently
than monthly. Each year the salary of the Employee shall be reviewed
and a salary amount set for the following year by the Board of
Directors based upon recommendations of its Compensation and Benefits
Committee, in accordance with the Company's established salary
administration plan. In the event that a mutual agreement cannot be
reached then the salary shall remain at the same level as that of the
previous year. The Employee shall initially hold a job grade of 28 in
the Company's job grading system.
(b) In addition to the Annual Salary described in Section 4(a)
above, the Bank agrees to reimburse Employee promptly (in accordance
with policies and procedures adopted by the Boards of Directors of the
Company and the Bank) for all reasonable and necessary expenses
actually incurred by Employee in connection with the Bank's business,
including, without limitation, all reasonable and necessary expenses of
travel, lodging, entertainment, and meals away from home incurred by
Employee in the course of his employment hereunder. Employee agrees to
keep and maintain such records of the aforesaid expenses as the Bank
may require and to account to Bank therefore prior to any such
reimbursement. Employee shall comply with all reasonable and lawful
policies and procedures applied by the Bank and the Company from time
to time to its employees generally and relating to or regulating the
nature and extent of reimbursement expenses, and the manner of
accounting and reimbursement therefor.
(c) Bank hereby agrees to make available to Employee, during
the Employment Period, all benefits which the Company makes generally
available to similarly situated employees of the Company's bank
subsidiaries, subject to and on a basis consistent with the terms and
conditions of such benefits, as these may be in effect from time to
time. In addition, Bank agrees to provide Employee, during the
Employment Period, with the following benefits:
(1) A suitable automobile for his use in carrying out
his duties to the Bank and its affiliates. If necessary, the
Employee will be allowed to use the Bank automobile for
personal use provided an accounting is kept concerning the
dates and mileage for personal use. Such accounting shall be
made to the Compensation & Benefits Committee on a quarterly
basis. The Employee shall, on a quarterly basis, reimburse the
Bank for his personal use at the then current rate approved by
the Company.
(2) A non-contributory qualified employee
profit-sharing plan; including participation in the Company's
401(k) Plan that provides for the Company to match the
Employee's contributions in accordance with Company's match of
senior officer's contributions to such plan generally.
(3) A non-contributory employee group life insurance
plan which will provide term life insurance for Employee in
the amount equal to two times Employee's annual salary during
all times that Employee remains an active employee.
(4) A non-contributory accident and health insurance
plan for the payment of medical care expenses for Employee.
(5) A non-contributory disability income plan wherein
the Company will provide the Employee with the following
disability income payable to age 65 and after a 90 day waiting
period: disability income equal to sixty percent (60%) of the
Employee's annual salary as it exists from time to time up to
a maximum benefit of $5,000.00 per month. The Company, in its
sole discretion, may apply for additional insurance in its own
name and for its own benefit covering the Employee for life,
medical, or disability insurance, in any amount deemed
advisable and the Employee shall have no right, title or
interest therein. The Employee shall submit to any required
examination and shall execute and assign and/or deliver such
application and policies
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necessary to effectuate such insurance coverage. The Employee
shall have the first such examination by no later December 31,
1998 or such later date as may be mutually agreeable.
The Bank shall require the Employee to have a thorough
annual physical examination and will reimburse the Employee
for the expense. The first such examination shall be made no
later than December 31, 1998.
(6) Club dues to a civic club and a country club which
may include any required initiation fees. The payment of all
dues are subject to approval by the Bank's Board of Directors.
(d) Employee shall, in addition to his annual salary, be
eligible, beginning in 1999, to earn a bonus based on the Employee
meeting his performance goals, in accordance with each year's officer
incentive compensation plan or successor plan, if any such plan is in
effect for such year. For 1998, the Employee shall receive any bonus he
may be entitled to under any plan disclosed to the Company as part of
the Merger Agreement.
Each year the Company's Compensation & Benefits Committee
shall make recommendations to the Bank's Board of Directors concerning
the setting of the performance goals for that year, after consulting
with the Employee.
The goals shall be specific and a fixed dollar amount for the
attainment of each goal shall be stated. Each year, the Employee may be
paid nothing as a bonus, or the amount of the maximum possible bonus,
or any amount in between depending on the Employee's achievement of
such goals.
Nothing herein is intended to or shall prevent the Bank from
providing, in its discretion, additional bonus and/or additional
compensation to the Employee, and further the Employee, notwithstanding
anything to the contrary contained herein shall participate in all
stock option, and benefit and welfare plans of the Company and its
affiliates on the same basis as all other senior officers of the
Company and its Bank subsidiaries.
(e) Pursuant to the Carolina First Long-Term Incentive
Compensation Plan, the Employee will be granted, immediately following
the Effective Time, options on 7,500 shares of based upon the closing
price of shares of Company Common Stock on the date of grant. Such
options shall vest ratably in equal annual amounts over six years
beginning one year after the Effective Time and shall have a term of 10
years.
(f) The employee shall have three weeks of paid vacation
annually, which, for 1998, shall include any vacation time taken prior
to the Effective Time.
Section 5. Nondisclosure of Confidential Information and
Nonsolicitation.
(a) Employee covenants and agrees to treat as confidential and
not to disclose and to use only for the advancement of the interests of
Company and the Bank all information, plans, records, trade secrets,
business secrets, and confidential or other data of Company, or its
subsidiaries including the Bank, submitted to Employee or compiled,
received, or otherwise discovered by Employee from time to time in the
course of his employment for use in the Company's or the Bank's
business, which Employee knows to have been acquired by him in
confidence or which he knows would not otherwise be available to
competitors of Company or the Bank, or to members of the public and
which would not otherwise become known to said competitors or members
of the public.
(b) Employee agrees that upon termination of his employment
with Bank, for any reason, voluntary or involuntary, with or without
cause, he will immediately return to the Company and the Bank any
property, customer lists, shareholder lists (of the Company and the
Bank, and their respective affiliates including its parent company and
subsidiaries), information, forms, formulae, plans, documents
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or other written or computer material or data, software or firmware, or
copies of the same, belonging to Company, the Bank or its affiliates,
or any of their customers, within his possession, and will not at any
time thereafter copy, reproduce or otherwise facilitate the future
disclosure of the same. Employee further agrees that he will not retain
or use for his account at any time any trade names, trademark, service
xxxx, or other proprietary business designation used or owned in
connection with the business of the Company, the Bank or its
affiliates.
(c) Following termination of employment, and for two (2) years
thereafter, Employee shall not (i) use any information obtained as a result of
his employment with the Bank to solicit any business of any customers, (ii)
solicit the employment of any employees of the Bank, or the Company and their
affiliates, or (iii) without the prior written consent of the Company, directly
or indirectly serve as a consultant to, serve as a management official of, or be
or become a major shareholder of any Financial Institution (other than the
Company or the Bank) having an office in Xxxxx, Buncombe, Jackson, McDowell,
Xxxxxxxxxx, and Transylvania Counties, North Carolina. The foregoing provisions
of clause (iii) shall not be applicable in the event the Employee is
involuntarily terminated by the Bank.
For the purposes of the covenants contained in this Section 5, the
following terms shall have the following respective meanings:
(a) The term "management official" shall refer to service of
any type which gives the undersigned the authority to participate,
directly or indirectly, in policy-making functions of the Financial
Institution. This includes, but is not limited to, service as an
organizer, officer, director, or advisory director of the Financial
Institution. It is expressly understood that the undersigned may be
deemed a management official of the Financial Institution whether or
not he holds any official, elected, or appointed position with such
Financial Institution.
(b) The term "Financial Institution" shall refer to any bank,
savings bank, thrift or other financial institution which engages in
the business of banking, or any subsidiaries or affiliates thereof, or
any entity which owns or obtains control thereof.
(c) The term "major shareholder" shall refer to the beneficial
ownership of 5% or more of any class of voting securities of such
company or the ownership of 5% of the total equity interest in such
company, however denominated.
(d) For purposes of this Section 5, the term "Company" shall
also include the Company's subsidiaries and other affiliates,
including, without limitation, the Bank.
Section 6. Termination. If the term of this Agreement has not sooner
automatically expired by lapse of time on January 31, 2002, the term of
Employee's employment hereunder shall terminate upon the occurrence of any of
the following:
(a) Upon the death of the Employee.
(b) As a result of the permanent disability of Employee. If it
is determined that Employee is disabled and that such disability is
likely to be permanent (herein referred to as a "Determination of
Permanent Disability"), the Bank may terminate this Agreement. Said
termination shall not be effective until such time as Bank has given
written notice to Employee, at the address specified in Section 10, of
its intent to terminate this Agreement. For the purposes of this
Section 6(b), the term "Disability" shall mean the Employee's inability
to perform functions normally performed for Bank of the Employee.
Permanent Disability shall mean the present disability of the Employee
coupled with the probability that such disability will continue for an
indefinite period but no less than six (6) months. A "Determination of
Permanent Disability" may be made at the request of either the Bank or
Employee; provided, however, that in the event Employee is unable, due
to his disability, to make such a request, his spouse or other designee
may make a request in his stead. In the event of a request by either
Employee or Bank for a
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"Determination of Permanent Disability," each of the Employee and Bank
shall designate one doctor to participate in the determination;
provided, however, that if Employee is unable, due to his disability,
to make such designation, his spouse or other designee shall make the
designation in his stead. If the two doctors so designated agree on a
determination required by this Section 6(b), such determination shall
be final. If the two doctors fail to agree, they shall by agreement
designate a third doctor to make the determination required by this
Section 6(b), which determination shall be final.
(c) At the election of Bank, for Cause. "Cause" shall mean
just and reasonable cause, including without limitation (i) persistent
incompetency or inefficiency or failure to follow reasonable
instructions received from the Board of Directors of the Bank or its
delegate (after reasonable prior written notice from the Board of
Directors of the Bank of such incompetency, insufficiency or failure to
follow such reasonable instructions), willful misconduct, dishonesty,
excessive alcohol use or alcoholism, use of illegal drugs or
convictions of a felony or any other offense involving moral turpitude,
(ii) material breach of any covenant contained in this Agreement,
including without limitation, failure to devote substantially all
business time to the business of the Bank. If Employee desires to sell
any shares of Company capital stock within 6 months after termination
for cause hereunder, the Employee shall notify the Company in writing
and provide the Company a right of first refusal with respect to the
purchase of such shares to match any bona fide offer by a third-party
to purchase such shares.
(d) Upon either party to this Agreement giving written notice
of termination to the other at least sixty (60) days prior to the
effective date of such termination.
Upon termination under this Section 6, Employee's right to further
compensation and benefits under this Agreement shall cease; provided, however,
that Employee shall remain entitled to any unpaid compensation and benefits
accrued prior to such termination and to any expense reimbursements to which he
was entitled at the date of such termination, and if Employee's employment is
terminated by Bank without cause pursuant to Section 6(d) or due to his death or
disability, such termination shall not affect Employee's or Employee's personal
representative's right to receive the payments and benefits to which Employee
would have been entitled under Section 4 if his employment had not terminated.
Notwithstanding anything herein to the contrary, in the event that the
employment of the Employee is terminated by the Company, without Cause under
Section 6(d) prior to January 31, 2002, the Company shall (i) continue to pay
the Employee the Annual Salary and provide the benefits set forth in Section 4
of this Agreement except for the annual bonus, the payment of which is
controlled by Section 4(d) until January 31, 2002, or (ii) pay the Employee
twelve (12) months pay, whichever is greater, as severance pay. Notwithstanding
anything contained herein to the contrary, the obligations of Employee under
Section 5 (except as limited in Section 8 below) shall survive the termination
(for any reason) of this Agreement.
Notwithstanding anything herein to the contrary, the transition bonuses
described in Section 4(a) hereof shall not be forfeited by Employee under any
circumstances.
Section 7. Change of Control. In the event that the Company experiences
a "Change in Control" as defined herein and the Employee voluntarily terminates
his employment, the Company shall immediately pay to the Employee a lump-sum of
money equal to his annual salary and maximum bonus potential for the year in
which the change in control occurs; said lump sum payment shall be in addition
to and not in lieu of the Employee's regular compensation should he remain in
the employ of the Company or its successor after a Change in Control. If,
following a Change in Control, Employee is terminated by Company or any
successor(s), the Bank or such successors shall continue to pay to Employee, for
the balance of the terms hereof and in addition to any other required payments,
the Annual Salary then in effect for Employee on the date of Employee's
termination. Said Annual Salary shall be paid periodically and on the same
schedule as that prior to Employee's termination. Furthermore, all deferred
compensation shall be immediately vested 100%, and shall be paid by the Bank or
its successor when due.
A Change in Control shall be deemed to have occurred if and when any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
and Exchange Act of 1934 and including a "group" thereunder) is or becomes a
beneficial owner, directly or indirectly, of securities of the Company or its
parent company representing
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greater than twenty-five percent (25%) of the combined voting power of the
Company's or its parent company's then outstanding securities. Notwithstanding
the foregoing, no "change in control" shall be deemed to have occurred solely by
virtue of any transaction which results in the Employee and/or a member or
members of the Company's Board of Directors (as existing immediately following
the Effective Time), or a group of persons including the Employee and/or a
member or members of the Company's Board of Directors immediately following the
Effective Time, acquiring, directly or indirectly, more than twenty-five percent
(25%) of the combined voting power of the Company's outstanding securities. For
purposes of the immediately preceding sentence, a "change in control" shall be
deemed to have occurred if the member or members of the Company's Board of
Directors immediately following the Effective Time, do not own or control
twenty-five percent (25%) or more of the acquiring person or resulting entity.
Furthermore, a "change in control" shall not be deemed to have occurred solely
as a result of merger, consolidation or other business combination, where the
Company is the surviving entity, even though the former shareholders of the
other party to such transaction hold, in total, more than 25% of the combined
voting power of the Company's or its parent company's then outstanding
securities, provided such persons are not acting collectively and would not be
deemed to be a single "person" or part of a "group" hereunder solely as a result
of their status as former shareholders of such other entity. The acquisition of
the Bank and the addition of directors by the Company from the Bank's Board of
Directors as contemplated by the Merger Agreement shall not be a "change in
control" for purposes of this Agreement.
Any dispute or controversy arising under or in connection with this
Section 7 shall be settled exclusively by arbitration in the State of North
Carolina in accordance with the rules of the American Arbitration Association
then in effect.
Section 8. Enforcement of Employee Restrictions. Employee acknowledges
that he has carefully read and considered the provisions of this Agreement and,
having done so, agrees that the restrictions set forth in this Agreement in
Sections 5 and 6 (including, but not limited to, the period of restriction and
the geographical area of restriction set forth therein) are fair and reasonable
and are necessarily required for the protection of the interests of the Bank,
the Company, and its affiliates. Employee further acknowledges that due to the
nature of Company's and the Bank's business, more limited restrictions than
those found herein would not be reasonable or appropriate. The Employee
covenants and agrees with Company and the Bank that if he shall violate any of
the covenants or agreements contained in such Sections, then Company and Bank
shall be entitled to damages in addition to and not in limitation of any
injunctive relief or other rights or remedies to which Company and/or its
affiliates is or may be entitled to at law or in equity. In the event that any
provisions of this Agreement relating to the time period or geographical
restriction shall be declared by a court of competent jurisdiction to exceed the
maximum time periods or geographical areas which such court deems reasonable and
enforceable, such time periods or geographical areas of restriction shall be
deemed to become and thereafter be the maximum time period or geographical areas
which such court deems reasonable and enforceable.
Section 9. Notices. All notices required or permitted hereunder shall
be deemed to be duly given if in writing and delivered personally or sent by
United States registered or certified mail, postage pre-paid, addressed to the
Company or the Bank at:
D. Xxxx Xxxx, III, Chairman
Carolina First BancShares, Inc.
000 Xxxx Xxxx Xxxxxx
Post Office Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
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and addressed to Employee at:
Xxxxxx X. Xxxxxxx
__________________
____________, North Carolina _______
or at such changed addresses as the parties may designate in writing.
Section 10. Miscellaneous.
(a) Headings. Headings, titles and captions contained in this
Agreement are inserted only as a matter of convenience and reference
and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any provisions hereof.
(b) Gender. The use in this Agreement of gender-specific words
or phrases shall be deemed to include the masculine, feminine or neuter
genders, as the context may require.
(c) Entire Agreement. This writing including the attachments,
exhibits and appendices hereto constitutes, the entire agreement
between the parties hereto and supersedes any prior understanding or
agreements among them respecting the subject matter. There are no other
representations, arrangements, understandings, or agreements, oral or
written, in respect of the subject matter of this Agreement, among the
parties hereto, except those fully expressed herein.
(d) Amendments. No amendments, changes, alterations,
modifications, additions, extensions and qualifications to the terms of
this Agreement shall be made or binding, unless made in writing and
signed by all the parties hereto.
(e) Waiver. The failure of either party to enforce at any time
any of the provisions of this Agreement shall not be construed as a
waiver of such provisions or of the right of such party thereafter to
enforce any such provisions.
(f) Invalidity and Severability. The invalidity or
unenforceability of any particular provision of this Agreement shall
not affect the enforceability of other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. Employee agrees and acknowledges
that nothing contained in this Agreement, nor the enforcement of any
provision herein including Section 6, shall alter Employee's ability to
obtain a livelihood. Employee agrees and acknowledges that all of the
provisions of this Agreement, including Section 6, are reasonable.
Employee acknowledges that he has carefully read and considered all the
provisions of this Agreement.
(g) Governing Law. This Agreement shall be construed and
governed in accordance with the laws of the State of North Carolina.
Employee hereby consents to the jurisdiction of any local, state or
federal court located in the State of North Carolina.
(h) Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
heirs, successors and assigns.
(i) Termination of Merger Agreement. This Agreement shall be
null and void in the event the Merger Agreement is terminated.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS: EMPLOYEE:
/s/ Xxxx X. Xxxx /s/ Xxxxxx X. Xxxxxxx
----------------------------- ------------------------------
Xxxxxx X. Xxxxxxx
ATTEST: COMMUNITY BANK & TRUST CO.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxx
-------------------- -------------------------
Asst. Secretary Vice President
