STATE OF SOUTH CAROLINA )
) EMPLOYMENT AGREEMENT
COUNTY OF GREENVILLE )
THIS EMPLOYMENT AGREEMENT, made and entered into this 20th day
of April, 2000, by and between XXXXX X. XXXXXX III, a resident of the State and
County aforesaid, hereinafter referred to as "Employee" and Summit Financial
Corporation, a corporation duly chartered pursuant to the laws of the State of
South Carolina, hereinafter referred to as "Employer".
W I T N E S S E T H:
WHEREAS, the Employer is a corporation chartered under the laws of the
State of South Carolina and
WHEREAS, Employee is the Spartanburg Regional President of the banking
operation which is a wholly-owned subsidiary of the Employer; and
WHEREAS, the terms of this Agreement are subject to the approval by
the Board of Directors of the Employer;
NOW, THEREFORE, in consideration of the mutual promises of the parties
and the mutual benefits they will gain by the performance thereof, the parties
hereto agree as follows:
1. Employment. That the Employer, subject to the terms and
conditions hereof, does hereby agree to employ the Employee and the Employee
accepts such employment, from the date hereof and to continue therefrom until
terminated as hereinafter provided.
2. Duties. That the Employee is employed to act as Spartanburg
Regional President of the banking entity, which is a wholly-owned subsidiary of
the Employer and to perform such other duties on behalf of the Employer, as well
as any subsidiary thereof, which will benefit the Employer.
3. Termination by Employee. That the Employee may terminate his
employment hereunder at any time after he has given ninety (90) days prior
written notice to the Employer, such notice to be accomplished by delivery of
such written termination to either the Chairman of the Board of Directors or
President (provided that the Employee is not serving in either capacity) of the
Employer.
4. Termination by Employer. That the Employer may terminate
immediately the Employee's employment hereunder at any time, with or without
cause, by giving written notice of such termination of employment to the
Employee.
5. Automatic Termination of Employee. That the employment of the
Employee shall be automatically terminated upon the earlier of any of the
following:
(a) The death of the Employee.
(b) The disability of the Employee so as to prevent the
Employee from adequately performing his duties contemplated hereunder (the
determination of any such disability shall be within the sole discretion of the
Board of Directors of the Employer). The Employee will be compensated at his
normal rate until the earlier of: (i) such time as he begins to receive benefits
from his disability insurance; or (ii) a period ending one hundred eighty (180)
days from such determination of disability.
6. Compensation. That for all of his duties hereunder, the Employee
shall receive compensation at the rate currently in place, which will initially
be as stated in Exhibit A to this document. However, anything to the contrary
notwithstanding, this compensation shall terminate immediately in the event of
termination of employment hereunder for any reason whatsoever except for any
payments which might be due the Employee under paragraph 5(b) or by reason of
the Employer enforcing its covenant not to compete set forth herein below.
7. Covenant Not to Compete.
(a) That in the event the Employee voluntarily terminates his
employment with the Employer or any subsidiary of the Employer, that the
Employee agrees that he will not, directly or indirectly, own, manage, operate,
control, be employed by, participate in or be connected in any manner with the
ownership, management or operation of any business similar to that type of
business then conducted by the Employer or by any subsidiary for which the
Employee is then actively engaged for a period of twelve (12) months from the
date of such termination of employment and within the radius of twenty (20)
miles from where the Employee has his main office or five (5) miles from any
branch office, while he is performing his services hereunder. Further, that the
Employee acknowledges that this covenant not to compete with the Employer, or
such subsidiary, is NOT made under duress and that it is an essential part of
the Agreement, without which the Employer would not have engaged or continued
the services of the Employee . Further, the Employee acknowledges that this
covenant not to compete is for such good and valid consideration, the receipt of
which is hereby acknowledged and Employee agrees that in the event of a
threatened breach of his covenant under this Agreement, that any remedy at law
would be inadequate and Employer may seek injunctive relief, as well as damages.
(b) That in the event that the Employer shall terminate the employment
of the Employee, without cause ("cause" is defined herein below), the Employer
agrees to pay the Employee one hundred (100%) percent of his regular monthly
salary (regular monthly salary shall be computed by dividing by twelve (12) the
Employee's W-2 cash salary and cash bonus income from the Employer for the
calendar year immediately preceding such termination of employment). Such
payment to begin on the last day of the first month following the termination of
employment and to continue for one (1) year from the date of termination of
employment. At Employer's sole option, and for the same monthly payment
amounts, this non-competition agreement may be continued up to a maximum of two
(2) years from the date of termination of employment; PROVIDED, HOWEVER, that
after one (1) year from the date of termination, Employer shall have the
absolute right, in its sole discretion, to terminate, at any time, this said
non-competition agreement by giving thirty (30) days prior written notice to the
Employee, mailed to the Employee's address designated in Item 8 hereof and this
covenant not to compete shall terminate thirty (30) days after the mailing of
such notice and the payments referred to herein above shall likewise
automatically terminate on said date, after which termination by the Employer,
no payments shall be payable as it is expressly acknowledged by both the
Employee and the Employer that Employer shall have no obligation whatsoever to
continue this covenant not to compete for any period of time beyond one (1) year
from the date of termination. Naturally, such notice of termination of such
payments by the Employer shall, at that time, release the Employee from his
obligation not to compete. Such non-compete shall prevent the Employee from,
directly or indirectly, owning, managing, operating, or being employed by,
participating in or being connected in any manner with the ownership, management
and operation of any business similar to that type of business then conducted by
the Employer or by any subsidiary for which the Employee is then actively
engaged for a period of twelve (12) months (24 months at Employers sole options)
from the date of such termination of employment and within the radius of twenty
(20) miles from the office of the Employer, or five (5) miles from any branch
office, as the case may be, within which Employee has his main office while he
is performing his services hereunder. Further, that the Employee acknowledges
that this covenant not to compete with the Employer or such subsidiary is NOT
made under duress and that it is an essential part of this Agreement, without
which the Employer would not have engaged or continued the services of the
Employee. Further, the Employee acknowledges that this covenant not to compete
is for such good and valid consideration, the receipt of which is hereby
acknowledged and Employee agrees that in the event of a threatened breach of his
covenant under this Agreement, that any remedy at law would be inadequate and
Employer may seek injunctive relief, as well as damages.
(c) That in the event that the Employer shall terminate the
employment of the Employee for cause (with "cause" being defined under this
Agreement to mean either: (i) willful failure of the Employee to substantially
perform prescribed duties other than a result of disability (the Employee shall
be given written notice of an alleged willful failure to substantially perform
such prescribed duties and shall have a period of thirty (30) days to correct
such willful failure to substantially perform such prescribed duties); or (ii)
the willful engaging in misconduct significantly detrimental to the Employer),
the Employer agrees to pay the Employee one hundred (100%) percent of his
regular monthly salary (regular monthly salary shall be computed by dividing by
twelve (12) the Employee's W-2 cash salary and cash bonus income from the
Employer for the calendar year immediately preceding such termination of
employment) for a period of one (1) month. Further, that in the event of such
termination for cause, the Employee agrees that he will not, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or be
connected in any manner with the ownership, management or operation of any
business similar to that type of business then conducted by the Employer or by
any subsidiary for which the Employee is then actively engaged for a period of
six (6) months from the date of termination of employment and within a radius of
twenty (20) miles from where the employee has his main office, or five (5) miles
from any branch office, while he is performing the services hereunder. Further,
that the Employee acknowledges that this covenant not to compete with the
Employer, or such subsidiary, is NOT made under duress and that it is an
essential part of this Agreement, without which the Employer would not have
engaged or continued the services of the Employee. Further, the Employee
acknowledges that this covenant not to compete is for such good and valid
consideration and Employee agrees that in the event of a threatened breach of
his covenant under this Agreement, that any remedy at law would be inadequate
and Employer may seek injunctive relief, as well as damages.
(d). That in the event the Employee is terminated by the Employer
after a change in control (as hereinafter defined) or by the Employer during the
pendency of a potential change in control (other than for cause in either case)
or by the Employee for good reason after a change in control, then the Employee
is entitled to an amount equal to three (3) times his annual base pay amount,
calculated as the average of the Employee's W-2 annual cash salary and cash
bonus income from the Employer over the five (5) most recent taxable years.
Said non-competition amounts are to be paid in three (3) equal annual
installments without any interest due thereon, the first installment being due
within thirty (30) days from the date of such termination and annually
thereafter until paid in full. In addition, the Employee is entitled to
continued life, disability and medical insurance coverage for a period of twelve
(12) months, paid for by the Employer. Said non-compete payments shall prevent
the Employee from, directly or indirectly, owning, managing, operating, or being
employed by, participating in or being connected in any manner with the
ownership, management and operation of any business similar to that type of
business then conducted by the Employer or by any subsidiary for which the
Employer is then actively engaged for a period of 36 months from the date of
such termination of employment and within the radius of twenty (20) miles from
the office of the Employer, or five (5) miles from any branch office, as the
case may be, within which Employer has his main office while he is performing
his services hereunder. Further, that the Employee acknowledges that this
covenant not to compete with the Employer or such subsidiary is NOT made under
duress and that it is an essential part of this Agreement. Further, the
Employee acknowledges that this covenant not to compete is for such good and
valid consideration, the receipt of which is hereby acknowledged. The Employer
and Employee acknowledge that any breach of this contract would cause damages to
the Employer, the value of which would be difficult to determine. For that
reason, the Employer and Employee hereby agree upon liquidated damages
specifying that the damages that the Employer would incur as a result of a
breach by the Employee would be determined based on the present value of the
stream of unpaid non-competition payments specified above. In addition, in the
event of a breach of the Employee's covenant under this Agreement, the Employer
may seek injunctive relief, as well as the liquidated damages set forth above.
A change in control occurs if: (i) any person or entity acting
directly or indirectly or through or in concert (other than persons who are
presently on the Board of Directors for the Employer) with one or more persons,
acquires the power, directly or indirectly, to vote twenty-five (25%) percent or
more of any class of voting securities of the Employer; or (ii) the Employer
becomes a subsidiary of another corporation or is merged or consolidated into
another corporation. A potential change in control occurs if: (i) the Employer
has entered into an agreement, the consummation of which would result in a
change in control; (ii) any person publicly announces his intention to take or
to consider taking actions which, if consummated, would constitute a change in
control; or (iii) any person becomes the beneficial owner, as defined under
Securities and Exchange Commission rules, directly or indirectly of the
Employer's securities which represent nine and one-half (9.5%) percent or more
of the combined voting power of the Employer's then outstanding securities
entitled to elect directors; or (iv) the Board of Directors adopts a resolution
to the effect that a potential change in control for purposes of the agreement
has occurred. A potential change in control remains pending for purposes of
receiving payments under the agreement until the earlier of the occurrence of a
change in control or a determination by the Board of Directors or a committee
thereof (at any time) that a change of control is not or was no longer
reasonably expected to occur.
Termination of employment because of disability, retirement or death,
or by the Employer for cause or by the Employee for any reason other than for
good reason, will not result in the full payment of benefits under the
provisions of paragraph 7(d) above. "Cause" is defined under the agreement to
mean: (i) willful failure substantially to perform prescribed duties other than
as a result of disability; or (ii) the willful engaging in misconduct
significantly detrimental to the Employer. "Good reason" for Employee to
terminate employment with the Employer occurs if: (i) duties are assigned that
are materially inconsistent with previous duties; (ii) duties and
responsibilities are substantially reduced; (iii) base compensation is reduced
not as part of an across-the-board reduction for such executives; (iv)
participation under compensation plans or arrangements generally made available
to persons at the Employee's level of responsibility at the Employer is denied
except as otherwise provided; (v) a successor fails to assume the agreement; or
(vi) termination is made without compliance with prescribed procedures.
8. Addresses. That, unless mutually amended in writing, any notices
required or permitted to be given under this Agreement shall be sufficient if in
writing and sent by registered mail to the following addresses:
FOR THE EMPLOYER:
Summit Financial Corporation
X/X X. Xxxxxxxx Xxxxxx
X X Xxx 0000
Xxxxxxxxxx, XX 00000
FOR THE EMPLOYEE:
Xxxxx X. Xxxxxx, III
0 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
9. Vacation. That during the term of active employment hereunder,
the Employee shall be entitled to an annual paid vacation of three (3) weeks to
be taken at such reasonable time or times as allowed by the Board of Directors
of the Employer.
10. Employee Benefits. That the Employee shall be entitled, during
the term of active employment hereunder, to those employee benefits currently in
place for the Employee, which will initially be as stated in Exhibit A to this
document
11. State Law. That this Agreement is made pursuant to the laws
of the State of South Carolina and shall be construed thereby.
12. Entire Agreement. That this Agreement constitutes the sole and
complete agreement between the Employer and the Employee and it is agreed that
no verbal or other statement, inducements or representations have been made to
or relied upon by the Employee and that no modification to this Agreement shall
be binding upon either party hereto unless in writing and signed by each party.
13. Binding Effect. That this Agreement is binding upon the parties
hereto, their successors, personal representatives, legal representatives, heirs
and assigns (however this Agreement shall not be assigned by the Employee unless
the Employer shall agree thereto in writing).
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the date above first written.
IN THE PRESENCE OF: EMPLOYER:
SUMMIT FINANCIAL CORPORATION
/s/ Xxxxx Xxx By: /s/ J. Xxxxxxxx Xxxxxx
Its: President
/s/ Xxxxxx Xxxxxxx And: /s/ Xxxxxx X. Xxxxxxxxxx
Its: Chief Financial Officer
EMPLOYEE:
/s/ Xxxxx Xxx /s/ Xxxxx X. Xxxxxx, III
/s/ Xxxxxx Xxxxxxx
