Employment Agreement
This Employment
Agreement (this “Agreement”) is entered into effective as of this 29 day
of December, 2008 by and among W. Xxxxx Xxxxx (the “Executive”),
Crescent Financial Corporation, a North Carolina corporation (the
“Corporation”), and Crescent State Bank, a North Carolina-chartered bank and
wholly owned subsidiary of the Corporation (the “Bank”). The
Corporation and the Bank are hereinafter sometimes referred to together or
individually as “Employer.”
Whereas,
the Executive possesses unique skills, knowledge, and experience relating to the
banking business and is expected to make significant contributions to the
profitability, growth, and financial strength of the Corporation and
affiliates,
Whereas,
the Executive and the Employer intend that this Agreement shall supersede and
replace in its entirety the October 24, 2007 Amended Employment Agreement
between the Executive and the Employer, and
Whereas,
none of the conditions or events included in the definition of the term “golden
parachute payment” that is set forth in Section 18(k)(4)(A)(ii) of the Federal
Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or,
to the best knowledge of Employer, is contemplated insofar as Employer or any
affiliates are concerned.
Now
Therefore, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
Article
1
Employment
1.1 Employment. The
Executive shall serve as Executive Vice President of the Bank according to the
terms and conditions of this Agreement. The Executive hereby accepts
employment according to the terms and conditions of this Agreement and for the
period stated in section 1.3.
1.2 Duties. As
Executive Vice President of the Bank, the Executive shall serve the Bank
faithfully, diligently, competently, and to the best of the Executive’s
ability. The Executive shall also serve as a non-voting member of the
loan committee of the Bank’s board of directors. The Executive shall
exclusively devote full time, energy, and attention to the promotion of the
Bank’s interests throughout the term of this Agreement. During the
two-year period commencing when Port City Capital Bank merges into the Bank, the
Executive shall report to the President and Chief Executive Officer of the Bank
or any successor thereto. Without the written consent of the
Corporation’s board of directors, during the term of this Agreement the
Executive shall not render services to or for any person, firm, corporation, or
other entity or organization in exchange for compensation, regardless of the
form in which such compensation is paid and regardless of whether it is paid
directly or indirectly to the Executive. However, the Executive may
serve with or without compensation as an officer or director of any charitable
or civic organization. Nothing in this section 1.2 shall prevent the
Executive from managing personal investments and affairs, however, provided that
doing so does not interfere with the proper performance of the Executive’s
duties.
1.3 Term. The initial
term of this Agreement shall be for a period of three years, commencing
September 1, 2006. On the first anniversary of September 1, 2006 and
on each anniversary thereafter this Agreement shall be extended automatically
for one additional year unless the Bank’s board of directors determines that the
term shall not be extended. If the board of directors determines not
to extend the term, it shall promptly notify the Executive in
writing. If the board of directors decides not to extend the term of
this Agreement, this Agreement shall nevertheless remain in force until its term
expires. The board of directors’ decision not to extend the term of
this Agreement shall not – by itself – give the Executive any rights under this
Agreement to claim an adverse change in his position, compensation, or
circumstances or otherwise to claim entitlement to severance benefits under
Article 4 of this Agreement. References herein to the term of this
Agreement shall refer to the initial term, as the same may be
extended. Unless sooner terminated, the Executive’s employment shall
terminate when the Executive attains age 65.
Article
2
Compensation
and Other Benefits
2.1 Base Salary. In
consideration of the Executive’s performance of the obligations under this
Agreement, Employer shall pay or cause to be paid to the Executive a salary at
the annual rate of not less than $189,800, payable in monthly
installments. The Executive’s salary shall be reviewed annually by
the Compensation Committee of the Bank’s board of directors or by the board
committee having jurisdiction over executive compensation. The
Executive’s salary shall be increased no less frequently than annually to
account for cost of living increases. The Executive’s salary also may
be increased beyond the amount necessary to account for cost of living increases
at the discretion of the committee having jurisdiction over executive
compensation. However, the Executive’s salary shall not be
reduced. The Executive’s salary, as the same may be increased from
time to time, is referred to in this Agreement as the “Base
Salary.”
2.2 Benefit Plans and
Perquisites. The Executive shall be entitled throughout the
term of this Agreement to participate in any and all officer or employee
compensation, bonus, incentive, and benefit plans in effect from time to time,
including without limitation stock option plans and other stock-based
compensation, incentive, bonus, or purchase plans, or plans providing pension,
medical, dental, disability, and group life benefits, including Employer’s
401(k) Plan, and to receive any and all other fringe benefits provided from time
to time, provided that the Executive satisfies the eligibility requirements for
any such plans or benefits.
(a) Club dues. During
the term of this Agreement, the Employer shall pay or cause to be paid the
Executive’s continued membership dues in civic and/or country clubs in an amount
up to $750 per month.
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(b) Reimbursement of business
expenses. The Executive shall be entitled to reimbursement for
all reasonable business expenses incurred performing the Executive’s obligations
under this Agreement, including but not limited to all reasonable business
travel and entertainment expenses incurred while acting at the request of or in
the service of Employer and reasonable expenses for attendance at annual and
other periodic meetings of trade associations.
2.3 Vacation. The
Executive shall be entitled to paid annual vacation and sick leave in accordance
with the policies established from time to time by Employer, but in no event
fewer than four weeks of vacation per year. The Executive shall
schedule at least five consecutive days of vacation per year. The
timing of vacations shall be scheduled in a reasonable manner by the
Executive. The Executive shall not be entitled to any additional
compensation for failure to use allotted vacation or sick leave nor shall the
Executive be entitled to accumulate unused sick leave from one year to the next,
unless authorized by the Bank’s board of directors to do so.
Article
3
Employment
Termination
3.1 Termination because of Death or
Disability. (a) Death. The
Executive’s employment shall terminate automatically on the date of the
Executive’s death. If the Executive dies in active service to
Employer, for 12 months after the Executive’s death Employer shall assist the
Executive’s family with continuing health care coverage under COBRA
substantially identical to that provided before the Executive’s
death. In addition, if the Executive’s employment terminates because
of death the Executive’s estate shall be entitled to any payments owing under
section 6.2, as provided in section 6.2.
(b) Disability. By
delivery of written notice 30 days in advance to the Executive, Employer may
terminate the Executive’s employment if the Executive is
disabled. For purposes of this Agreement, the Executive shall be
considered “disabled”
if an independent physician selected by Employer and reasonably acceptable to
the Executive or the Executive’s legal representative determines that, because
of illness or accident, the Executive is unable to perform the Executive’s
duties for a period of 90 consecutive days. The Executive shall not
be considered disabled, however, if the Executive returns to work on a full-time
basis within 30 days after Employer gives notice of termination due to
disability. If the Executive’s employment terminates because of
disability, the Executive shall receive the salary earned through the date on
which termination became effective, any unpaid bonus or incentive compensation
due to the Executive for the calendar year preceding the calendar year in which
the termination became effective, any payments the Executive is eligible to
receive under any disability insurance program in which the Executive
participates, such other benefits to which the Executive may be entitled under
Employer’s benefit plans, policies, and agreements, and any benefits provided
for elsewhere in this Agreement. In addition, if the Executive’s
employment terminates because of disability the Executive shall be entitled to
any payments owing under section 6.2, as provided in section 6.2.
3.2 Involuntary Termination with
Cause. Employer may terminate the Executive’s employment with
Cause. If the Executive’s employment terminates with Cause, the
Executive shall receive the salary to which the Executive was entitled through
the date on which termination became effective and any other benefits to which
the Executive may be entitled under Employer’s benefit plans and policies in
effect on the termination date. For purposes of this Agreement “Cause”
means any of the following –
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(1) an
intentional act of fraud, embezzlement, or theft by the Executive in the course
of employment. An act or failure to act on the Executive’s part shall
be considered intentional if it is not in good faith and if it is without a
reasonable belief that the action or failure to act is in the Employer’s best
interests. No act or failure to act on the part of the Executive
shall be deemed to have been intentional if it was due primarily to an error in
judgment or negligence, or
(2) intentional
violation by the Executive of any applicable law or significant policy of
Employer that, in Employer’s reasonable judgement, results in an adverse effect
on Employer, regardless of whether the violation leads to criminal prosecution
or conviction. For purposes of this Agreement applicable laws include
any statute, rule, regulatory order, statement of policy, or final
cease-and-desist order of any governmental agency or body having regulatory
authority over Employer, or
(3) the
Executive’s gross negligence or gross neglect of duties in the performance of
duties, or
(4) intentional
wrongful damage by the Executive to the business or property of Employer,
including without limitation the reputation of Employer, which in Employer’s
reasonable judgment causes material harm to Employer, or
(5) a
breach by the Executive of fiduciary duties or misconduct involving dishonesty,
in either case whether in the Executive’s capacity as an officer or as a
director, or
(6) a
breach by the Executive of this Agreement that, in the Employer’s reasonable
judgment, is a material breach, which breach is not corrected by the Executive
within 10 days after receiving written notice of the breach, or
(7) removal
of the Executive from office or permanent prohibition of the Executive from
participating in the Bank’s affairs by an order issued under section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1),
or
(8) conviction
of the Executive for or plea of no contest to a felony or conviction of or plea
of no contest to a misdemeanor involving moral turpitude, or the actual
incarceration of the Executive for five consecutive days or more,
or
(9) the
occurrence of any event that results in the Executive being excluded from
coverage, or having coverage limited for the Executive as compared to other
executives of the Bank, under the Bank’s blanket bond or other fidelity or
insurance policy covering its directors, officers, or employees.
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3.3 Voluntary Termination by the
Executive Without Good Reason. If the Executive terminates
employment without Good Reason, the Executive shall receive the Base Salary and
expense reimbursement to which the Executive is entitled through the date on
which termination becomes effective, and any payments owing under section 6.2,
as provided in section 6.2.
3.4 Involuntary Termination Without Cause
and Voluntary Termination with Good Reason. With written
notice to the Executive 90 days in advance, the Employer may terminate the
Executive’s employment without Cause. Termination shall take effect
at the end of the 90-day period. With advance written notice to the
Employer as provided in clause (y), the Executive may
terminate employment for Good Reason. If the Executive’s employment
terminates involuntarily without Cause or voluntarily but with Good Reason, the
Executive shall be entitled to the benefits specified in Article 4 of this
Agreement, except as may be provided in Article 4, and any payments owing under
section 6.2, as provided in section 6.2. For purposes of this
Agreement a voluntary termination by the Executive shall be considered a
voluntary termination with Good Reason if the conditions stated in both clauses
(x) and (y) are satisfied
–
(x) a
voluntary termination by the Executive shall be considered a voluntary
termination with Good Reason if any of the following occur without the
Executive’s advance written consent, and the term Good Reason shall mean the
occurrence of any of the following without the Executive’s advance written
consent –
(1) a
material diminution of the Executive’s Base Salary,
(2) a
material diminution of the Executive’s authority, duties, or
responsibilities,
(3) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report,
(4) a
material diminution in the budget over which the Executive retains
authority,
(5) a
material change in the geographic location at which the Executive must perform
services for the Employer, or
(6) any
other action or inaction that constitutes a material breach by the Employer of
this Agreement.
(y) the
Executive must give notice to the Employer of the existence of one or more of
the conditions described in clause (x) within 90 days after the
initial existence of the condition, and the Employer shall have 30 days
thereafter to remedy the condition. In addition, the Executive’s
voluntary termination because of the existence of one or more of the conditions
described in clause (x)
must occur within 12 months after the initial existence of the
condition.
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Article
4
Severance
Compensation
4.1 Severance. If the
Employer terminates the Executive’s employment without Cause or if the Executive
voluntarily terminates employment for Good Reason, the Executive shall be
entitled to –
(a) Cash severance. A
lump-sum severance payment in cash in the amount of two and one half times his
Base Salary, payable within 30 days after the Executive’s employment
termination. Cash severance compensation shall not be payable,
however, if the Executive’s employment terminates after a Change in Control of
the Corporation. For purposes of this Agreement a Change in Control
means a change in control as defined in Internal Revenue Code section 409A and
rules, regulations, and guidance of general application thereunder issued by the
Department of the Treasury, including –
(1) Change in ownership: a change
in ownership of the Corporation occurs on the date any one person or group
accumulates ownership of Corporation stock constituting more than 50% of the
total fair market value or total voting power of Corporation stock,
(2) Change in effective control:
(x) any one person or
more than one person acting as a group acquires within a 12-month period
ownership of Corporation stock possessing 30% or more of the total voting power
of Corporation stock, or (y) a majority of the
Corporation’s board of directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed in advance by a majority
of the Corporation’s board of directors, or
(3) Change in ownership of a substantial
portion of assets: a change in ownership of a substantial portion of the
Corporation’s assets occurs if in a 12-month period any one person or more than
one person acting as a group acquires from the Corporation assets having a total
gross fair market value equal to or exceeding 40% of the total gross fair market
value of all of the Corporation’s assets immediately before the acquisition or
acquisitions. For this purpose, gross fair market value means the
value of the Corporation’s assets, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the
assets.
(b) Cash-out of the value of unvested
stock options. The Executive shall be entitled to receive from
Employer an amount equal to the intrinsic value of any unvested stock options
and the value of any unvested restricted stock or other equity-based
compensation as of the effective date of termination. Amounts payable
under this paragraph (b) shall be paid in a single lump sum in cash by the
earlier of (x) 90 days
after the Executive’s employment termination or (y) March 15 of the year after
the year in which the Executive’s employment terminates. The
intrinsic value of unvested stock options means the per share closing price of
Corporation common stock on the date of the Executive’s employment termination
less the per share exercise price of the unvested stock options, multiplied by
the number of unvested options.
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(c) Outplacement and
support. Employer shall pay or cause to be paid to the
Executive reasonable outplacement expenses in an amount up to $25,000, and for
one year after termination Employer shall provide the Executive with the use of
office space and reasonable office support facilities, including secretarial
assistance.
Article
5
Confidentiality
and Creative Work
5.1 Non-disclosure. The
Executive covenants and agrees not to reveal to any person, firm, or corporation
any confidential information of any nature concerning Employer or its business,
or anything connected therewith. As used in this Article 5, the term
“confidential
information” means all of the Corporation’s and its affiliates’
confidential and proprietary information and trade secrets in existence on the
date hereof or existing at any time during the term of this Agreement, including
but not limited to –
(a) the
whole or any portion or phase of any business plans, financial information,
purchasing data, supplier data, accounting data, or other financial
information,
(b) the
whole or any portion or phase of any research and development information,
design procedures, algorithms or processes, or other technical
information,
(c) the
whole or any portion or phase of any marketing or sales information, sales
records, customer lists, prices, sales projections, or other sales information,
and
(d) trade
secrets, as defined from time to time by the laws of the State of North
Carolina.
Despite
anything to the contrary in this Agreement, confidential information excludes
information that – as of the date hereof or at any time after the date hereof –
is published or disseminated without obligation of confidence or that becomes a
part of the public domain by or through action of Employer or otherwise than by
or at the direction of the Executive. This section 5.1 does not
prohibit disclosure required by an order of a court having jurisdiction or a
subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of the
Executive’s authority.
5.2 Return of
Materials. The Executive agrees to deliver or return to
Employer upon employment termination or as soon thereafter as possible all
written information and any other similar items furnished by Employer or
prepared by the Executive in connection with the Executive’s services
hereunder. The Executive will retain no copies thereof after
termination of this Agreement or termination of the Executive’s
employment.
5.3 Injunctive
Relief. The Executive acknowledges that it is impossible to
measure in money the damages that will accrue to Employer if the Executive fails
to observe the obligations imposed by this Article 5. Accordingly, if
Employer institutes an action to enforce the provisions hereof, the Executive
hereby waives the claim or defense that an adequate remedy at law is available
to Employer, and the Executive agrees not to urge in any such action the claim
or defense that an adequate remedy at law exists.
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5.4 Affiliates’ Confidential Information
is Covered; Confidentiality Obligation Survives
Termination. For purposes of this Agreement, the term “affiliate”
of the Corporation includes but is not limited to the Bank, any bank successor
to the Bank, and any entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Bank. The rights and obligations set forth in this Article 5 shall
survive termination of this Agreement.
5.5 Creative Work. The
Executive agrees that all creative work and work product, including but not
limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by the Executive during the term
of this Agreement, regardless of when or where such work or work product was
produced, constitutes work made for hire, all rights of which are owned by
Employer. The Executive hereby assigns to the Corporation and to the
Bank all rights, title, and interest, whether by way of copyrights, trade
secret, trademark, patent, or otherwise, in all such work or work product,
regardless of whether the same is subject to protection by patent, trademark, or
copyright laws.
Article
6
Competition
After Employment Termination
6. Restrictions on the Executive’s
Post-Employment Activities. These restrictions have been
negotiated, presented to and accepted by the Executive contemporaneous with the
offer and acceptance by the Executive of this Agreement and the benefits
promised in an Amended Salary Continuation Agreement signed or to be signed in
2008 by the Executive and the Bank, and in consideration of the Employer’s
promise to make payments of $78,333 to the Executive on September 1, 2006 and on
each of the first two anniversaries of that date. The Employer’s
decision to enter into this Agreement and the Amended Salary Continuation
Agreement is conditioned upon the Executive’s agreement to be bound by the
restrictions contained in this Article 6.
(a) Promise of no
solicitation. The Executive promises and agrees that during
the Restricted Period (as defined below), and in the Restricted Territory (as
defined below), the Executive will1:
1. not directly or indirectly
solicit, or attempt to solicit any Customer (as defined below) to accept or
purchase Financial Products or Services (as defined below) of the same nature,
kind or variety as provided to the Customer by the Employer during the two years
immediately preceding the Executive’s employment termination with the
Employer;
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2. not directly or indirectly
influence, or attempt to influence any Customer, joint venturer or other
business partner of the Employer to alter that person or entity’s business
relationship with the Employer in any respect; and
3. not accept the Financial
Products or Services business of any Customer or provide Financial Products or
Services to any Customer on behalf of anyone other than the
Employer.
(b) Promise of no
competition. The Executive promises and agrees that during the
Restricted Period in the Restricted Territory, the Executive will not engage, undertake or
participate in the business of providing, selling, marketing or distributing
Financial Products or Services of a similar nature, kind or variety (i) as
offered by the Employer to Customers during the two years immediately preceding
the Executive’s employment termination with the Employer; or (ii) as offered by
the Employer to any of its Customers during the Restricted Period.2 Subject to the above provisions and
conditions of this subparagraph (b), the Executive promises that during the
Restricted Period the Executive will not become employed by or
serve as a director, partner, consultant, agent, or owner of 5% or more of the
outstanding stock of or contractor to any entity providing these prohibited
Financial Products or Services which is located in, or conducts business in the
Restricted Territory.
(c) Promise of no
raiding/hiring. The Executive promises and agrees that during
the Restricted Period, the Executive will not solicit or attempt to
solicit and will not
encourage or induce in any way, any employee, joint venturer or business partner
of the Employer to terminate an employment or contractual relationship with the
Employer. The Executive agrees that the Executive will not hire any person employed
by Employer during the two (2) year period prior to the Executive’s employment
termination with the Employer or any person employed by the Employer during the
Restricted Period.
(d) Promise of no
disparagement. The Executive promises and agrees that during
the Restricted Period, the Executive will not cause statements to be
made (whether written or oral) which reflect negatively on the business
reputation of the Employer.
(e) Acknowledgment. The
Executive and the Employer acknowledge and agree that the provisions of this
Article 6 have been negotiated and carefully determined to be reasonable and
necessary for the protection of legitimate business interests of the
Employer. Both parties agree that a violation of Article 6 is likely
to cause immediate and irreparable harm which will give rise to the need for
court ordered injunctive relief. In the event of a breach or
threatened breach by the Executive of any provision of this Agreement, the
Employer shall be entitled to obtain an injunction restraining the Executive
from violating the terms of this Agreement, and to institute an action against
the Executive to recover damages from the Employee for such
breach. These remedies for default or breach are in addition to any
other remedy or form of redress provided under North Carolina law. The parties
acknowledge that the provisions of this Article 6 survive termination of the
employment relationship. The parties agree that if any of the
provisions of this Article 6 are deemed unenforceable by a court of competent
jurisdiction, that such provisions may be stricken as independent clauses by the
court in order to enforce the remaining territory restrictions and that the
intent of the parties is to afford the broadest restriction on post-employment
activities as set forth in this Agreement. Without limiting the
generality of the foregoing, without limiting the remedies available to the
Employer for violation of this Agreement, and without constituting an election
of remedies, if the Executive violates any of the terms of Article 6 the
Executive shall forfeit on the Executive’s own behalf and that of
beneficiary(ies) any rights to and interest in any severance or other benefits
under this Agreement or other contract the Executive has with the Bank or the
Corporation.
2 For Example, the promise of no
competition applies if the Executive is conducting prohibited business in the
Restricted Territory or if the entity with, for or to whom the
Executive is conducting prohibited business is located within the Restricted
Territory.
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(f) Definitions:
1. “Restricted
Period” as used herein means (x) for termination and/or
separation of employment with the Employer on or before September 1, 2011, the
two (2) years immediately following the Executive’s termination and/or
separation of employment with the Employer, regardless of the reason for
termination and/or separation, and (y) for termination and/or
separation of employment with the Employer on or after September 1, 2011 and
before the Executive attains age 60, one (1) year immediately following the
Executive’s termination and/or separation of employment with the Employer,
regardless of the reason for termination and/or separation. The
restrictions of this Article 6 shall become null and void if the Executive’s
termination and/or separation of employment with the Employer occurs on or after
the date the Executive attains age 60. The Restricted Period shall be
extended in an amount equal to any time period during which a violation of
Article 6 of this Agreement is proven.
2. “Restricted
Territory” as used herein means: (1) New Hanover County, North
Carolina; and (2) the counties of Brunswick and Xxxxxx, North
Carolina. The parties agree that if any of these separate territories
are deemed too broad to be enforced by a court of competent jurisdiction, that
the territories are divisible and severable territories which may be stricken as
independent clauses by the court in order to enforce the remaining territory
restrictions.
3. “Customer”
as used herein means any individual, joint venturer, entity of any sort, or
other business partner of the Employer, with, for or to whom the Employer has
provided Financial Products or Services during the last two (2) years of the
Executive’s employment with the Employer; or any individual, joint venturer,
entity of any sort, or business partner whom the Employer has identified as a
prospective customer of Financial Products or Services within the last two (2)
years of the Executive’s employment with the Employer.
4. “Financial
Products or Services” as used herein means any product or service that a
financial institution or a financial holding company could offer by engaging in
any activity that is financial in nature or incidental to such a financial
activity under Article 4(k) of the Bank Holding Company Act of 1956 and that is
offered by the Employer or an affiliate on the date of the Executive’s
employment termination, including but not limited to banking activities and
activities that are closely related and a proper incident to banking, or other
products or services of the type of which the Executive was involved during the
Executive’s employment with the Employer.
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Article
7
Miscellaneous
7.1 Successors and
Assigns. (a) This Agreement is binding on
successors. This Agreement shall be binding upon Employer and
any successor to Employer, including any persons acquiring directly or
indirectly all or substantially all of the business or assets of Employer by
purchase, merger, consolidation, reorganization, or otherwise. But
this Agreement and Employer’s obligations under this Agreement are not otherwise
assignable, transferable, or delegable by Employer. By agreement in
form and substance satisfactory to the Executive, Employer shall require any
successor to all or substantially all of the business or assets of Employer
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent Employer would be required to perform had no succession
occurred.
(b) This Agreement is enforceable by the
Executive’s heirs. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, and
legatees.
(c) This Agreement is personal and is
not assignable. This Agreement is personal in
nature. Without written consent of the other parties, no party shall
assign, transfer, or delegate this Agreement or any rights or obligations under
this Agreement, except as expressly provided herein. Without limiting
the generality or effect of the foregoing, the Executive’s right to receive
payments hereunder is not assignable or transferable, whether by pledge,
creation of a security interest, or otherwise, except for a transfer by the
Executive’s will or by the laws of descent and distribution. If the
Executive attempts an assignment or transfer that is contrary to this section
7.1, Employer shall have no liability to pay any amount to the assignee or
transferee.
7.2 Governing Law, Jurisdiction and
Forum. This Agreement shall be construed under and governed by
the internal laws of the State of North Carolina, without giving effect to any
conflict of laws provision or rule (whether of the State of North Carolina or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of North Carolina. By entering into
this Agreement, the Executive acknowledges that the Executive is subject to the
jurisdiction of both the federal and state courts in the State of North
Carolina. Any actions or proceedings instituted under this Agreement
shall be brought and tried solely in courts located in Wake County, North
Carolina, or in the federal court having jurisdiction in Cary, North
Carolina. The Executive expressly waives the right to have any such
actions or proceedings brought or tried elsewhere.
7.3 Entire
Agreement. This Agreement sets forth the entire agreement of
the parties concerning the employment of the Executive by Employer, and any oral
or written statements, representations, agreements, or understandings made or
entered into prior to or contemporaneously with the execution of this Agreement
are hereby rescinded, revoked, and rendered null and void. This
Agreement amends and restates in its entirety the October 24, 2007 Amended
Employment Agreement entered into by the Executive, the Bank, and the
Corporation.
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7.4 Notices. Any notice
under this Agreement shall be deemed to have been effectively made or given if
in writing and personally delivered, delivered by mail properly addressed in a
sealed envelope, postage prepaid by certified or registered mail, delivered by a
reputable overnight delivery service, or sent by facsimile. Unless
otherwise changed by notice, notice shall be properly addressed to the Executive
if addressed to the address of the Executive on the books and records of the
Employer at the time of the delivery of such notice, and properly addressed to
Employer if addressed to Crescent Financial Corporation, 0000 Xxxx Xxxxx Xxxx,
Xxxx, Xxxxx Xxxxxxxx 00000, Attention: Corporate Secretary.
7.5 Severability. In
the case of conflict between any provision of this Agreement and any statute,
regulation, or judicial precedent, the latter shall prevail, but the affected
provisions of this Agreement shall be curtailed and limited solely to the extent
necessary to bring them within the requirements of law. If any
provision of this Agreement is held by a court of competent jurisdiction to be
indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder
of this Agreement shall continue in full force and effect unless that would
clearly be contrary to the intentions of the parties or would result in an
injustice.
7.6 Captions and
Counterparts. The captions in this Agreement are solely for
convenience. The captions in no way define, limit, or describe the
scope or intent of this Agreement. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
7.7 No Duty to
Mitigate. Employer hereby acknowledges that it will be
difficult and could be impossible (x) for the Executive to find
reasonably comparable employment after employment termination, and (y) to measure the amount of
damages the Executive may suffer as a result of
termination. Additionally, Employer acknowledges that its general
severance pay plans do not provide for mitigation, offset, or reduction of any
severance payment received thereunder. The Employer further
acknowledges that the payment of severance benefits under this Agreement is
reasonable and shall be liquidated damages. The Executive shall not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment. Moreover, the amount of any payment
provided for in this Agreement shall not be reduced by any compensation earned
or benefits provided as the result of employment of the Executive or as a result
of the Executive being self-employed after employment termination.
7.8 Amendment and
Waiver. This Agreement may not be amended, released,
discharged, abandoned, changed, or modified except by an instrument in writing
signed by each of the parties hereto. The failure of any party hereto
to enforce at any time any of the provisions of this Agreement shall not be
construed to be a waiver of any such provision or affect the validity of this
Agreement or any part thereof or the right of any party thereafter to enforce
each and every such provision. No waiver or any breach of this
Agreement shall be held to be a waiver of any other or subsequent
breach.
7.9 Consultation with Counsel and
Interpretation of this Agreement. The Executive acknowledges
and agrees that the Executive has had the assistance of counsel of the
Executive’s choosing in the negotiation of this Agreement, or the Executive has
chosen not to have the assistance of counsel. Both parties hereto
having participated in the negotiation and drafting of this Agreement, they
hereby agree that there shall not be strict interpretation against either party
in connection with any review of this Agreement in which interpretation thereof
is an issue.
12
7.10 Compliance with Internal Revenue Code
Section 409A. Employer and the Executive intend that their
exercise of authority or discretion under this Agreement shall comply with
section 409A of the Internal Revenue Code of 1986. If when the
Executive’s employment terminates the Executive is a specified employee, as
defined in section 409A of the Internal Revenue Code of 1986, and if any
payments under this Agreement will result in additional tax or interest to the
Executive because of section 409A, then despite any contrary provision of this
Agreement the Executive shall not be entitled to the payments until the earliest
of (x) the date that is
at least six months after termination of the Executive’s employment for reasons
other than the Executive’s death, (y) the date of the
Executive’s death, or (z) any earlier date that does
not result in additional tax or interest to the Executive under section
409A. As promptly as possible after the end of the period during
which payments are delayed under this provision, the entire amount of the
delayed payments shall be paid to the Executive in a single lump
sum. If any provision of this Agreement does not satisfy the
requirements of section 409A, such provision shall nevertheless be applied in a
manner consistent with those requirements. If any provision of this
Agreement would subject the Executive to additional tax or interest under
section 409A, Employer shall reform the provision. However, Employer
shall maintain to the maximum extent practicable the original intent of the
applicable provision without subjecting the Executive to additional tax or
interest, and Employer shall not be required to incur any additional
compensation expense as a result of the reformed
provision. References in this Agreement to section 409A of the
Internal Revenue Code of 1986 include rules, regulations, and guidance of
general application issued by the Department of the Treasury under Internal
Revenue Code section 409A.
13
In Witness
Whereof, the parties have executed this Employment Agreement as of the
date first written above.
|
Witnesses
|
Crescent
Financial Corporation
|
|||
|
Xxxxx X.
Xxxxxxx
|
By:
|
Xxxxxxx X. Xxxxxxx
|
||
|
|
|
Its:
|
President/CEO
|
|
|
Witnesses
|
Crescent
State Bank
|
|||
|
Xxxxx
X. Xxxxxxx
|
By:
|
Xxx X.
Xxxxxx
|
||
|
|
|
|||
|
|
Its:
|
COO
|
||
|
Witnesses
|
Executive
|
|||
|
Xxxxx X. Xxxxxxx
|
W.
Xxxxx Xxxxx
|
|||
|
W.
Xxxxx Xxxxx
|
||||
|
|
|
|
||
|
County
of Wake
|
)
|
|
|
)
ss:
|
||
|
State
of North Carolina
|
)
|
Before me this 29 day of December
, 2008, personally appeared the above named Xxxxxxx X. Xxxxxxx & Xxx
X. Xxxxxx and W. Xxxxx Xxxxx, who acknowledged that they did sign the
foregoing instrument and that the same was their free act and deed.
|
Xxxx X. Xxxxxxxx
|
|
|
(Notary
Seal)
|
Notary
Public
|
|
My
Commission Expires:
|
|
|
January
8, 2011
|
14
