Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into as of the 1st day of August, 1999 by and among CCB
Financial Corporation, a North Carolina corporation ("CCBF"), Central Carolina
Bank and Trust Company, a North Carolina commercial bank ("CCB Bank"), and
Xxxxxxx X. Xxx ("Executive").
BACKGROUND
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WHEREAS, Executive was employed initially as a Senior Vice President
and the Chief Financial Officer of CCBF and of CCB Bank, the primary banking
subsidiary of CCBF as of October 26 1998; and
WHEREAS, the expertise and experience of Executive and his
relationships and reputation in the financial institutions industry are
extremely valuable to CCBF, CCB Bank and the direct and indirect subsidiaries of
CCBF ("Subsidiaries"); and
WHEREAS, it is in the best interests of CCBF, its Subsidiaries and its
shareholders to maintain an experienced and sound executive management team to
manage CCBF, CCB Bank and the other Subsidiaries and to further CCBF's overall
strategies to protect and enhance the value of its shareholders' investments;
and
WHEREAS, CCBF, CCB Bank and Executive desire to amend and restate
Executive's Employment Agreement, dated as of October 26, 1998, to establish the
scope, terms and conditions of Executive's employment by CCBF and CCB Bank.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. The effective time and date of this Agreement shall
be deemed to be 12:00:01 o'clock, a.m., on October 26, 1998 (the "Effective
Date").
2. Definitions. The following defined terms are defined in the
referenced Sections of this Agreement.
Term Section
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Accrued Obligations Section 8(a)(i)(A)
Additional Payment Section 10(a)
Base Salary Section 6(a)
Bank Board Section 3(b)
Benefit Plans Section 6(c)
Cause Section 7(b)
CCBF Board Section 3(b)
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Change of Control Section 9(b)
Change of Control Termination Section 9(a)
Change of Control Termination Date Section 9(a)
Code Section 8(c)
Competitor Section 13(a)
Continuing Period Section 9(c)(iv)
Commissioner Section 15(d)
Date of Termination Section 7(e)
Disability Section 7(a)
Disability Effective Date Section 7(a)
Effective Date Section 1
EMIP Section 6(b)(i)
Employment Period Section 4
Excise Tax Section 10(a)
FDIC Section 15(d)
Good Reason Section 7(c)
Group Section 9(b)
Incumbent Directors Section 9(b)
IRS Section 10(a)
ISOs Section 8(c)
LTIP Section 6(b)(ii)
1934 Act Section 9(b)
Notice of Termination Section 7(d)
Other Benefits Section 8(a)(iv)
Options Section 8(a)(vi)
Payment Section 10(a)
Person Section 9(b)
Remaining Employment Period Section 8(a)(i)(B)
Restricted Period Section 8(a)(vi)
Subsidiaries Preamble
Target EMIP Bonus Section 8(a)(i)(A)
Target LTIP Award Section 8(a)(ii)
Welfare Benefit Plans Section 6(d)
3. Employment. Executive will be employed as an Executive Vice
President and the Chief Financial Officer of each of CCBF and CCB Bank.
Executive's responsibilities, duties, prerogatives and authority in such
executive offices, and the clerical, administrative and other support staff and
office facilities provided to him, shall be those customary for the chief
financial officer of publicly held corporations generally and of holding
companies and financial institutions that are a part of the financial
institutions industry specifically. In his executive capacities Executive shall
report to the President and Chief Executive Officer of CCBF and CCB Bank, as
applicable.
4. Employment Period. Unless earlier terminated, Executive's employment
shall be for two (2) years commencing on the Effective Date, and unless
terminated as provided herein as of the end of such two (2) year term, shall
continue for a renewing three (3) year term commencing on the second anniversary
of the Effective Date (the "Employment Period"). After the commencement of the
renewing three (3) year term, the Employment Period shall, without further
action by Executive, CCBF or CCB Bank, be extended for an additional one (1)
year on each anniversary of the Effective Date, such that the remaining term of
the Employment Period shall continue to be three (3) years; provided, further,
however,
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that CCBF and CCB Bank or Executive may, by notice to the other, cause the
Employment Period to cease to extend automatically as of a specific anniversary
of the Effective Date. Such notice must be given and received at least eleven
(11) months and thirty-one (31) days prior to the anniversary of the Effective
Date on which it is to be effective. Upon the effectiveness of such notice, the
Employment Period shall be fixed at three (3) years, and the Employment Period
shall terminate upon the expiration of such three-year period.
5. Extent of Service. During the Employment Period, and excluding any
periods of vacation, sick or other leave to which Executive is entitled under
this Agreement, Executive agrees to devote reasonable attention and time during
normal business hours to the business and affairs of CCBF and CCB Bank, and, to
the extent necessary to discharge the responsibilities assigned to Executive
hereunder, to use Executive's reasonable best efforts to perform faithfully and
efficiently his responsibilities and duties under this Agreement. During the
Employment Period, it shall not be a violation of this Agreement for Executive
to (i) devote reasonable periods of time to charitable, trade association,
community and similar activities, and/or (ii) manage personal business interests
and investments, so long as such activities do not interfere with the
performance of Executive's responsibilities and duties under this Agreement. It
is expressly understood and agreed that to the extent that any such activities
have been conducted by Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not thereafter be deemed
to interfere with the performance of Executive's responsibilities and duties
hereunder.
6. Compensation and Benefits.
(a) Base Salary. For the 1998 and 1999 fiscal years of CCBF,
CCBF will pay to Executive a base salary of $232,000 per year ("Base Salary"),
less normal withholdings, payable in equal monthly or more frequent installments
as are customary under CCB Bank's payroll practices from time to time.
Commencing with the fiscal year beginning January 1, 2000 and thereafter during
the Employment Period, the Compensation Committee of the CCBF Board shall review
Executive's total compensation annually and in its sole discretion may adjust
Executive's Base Salary from year to year, but during the Employment Period
neither the Compensation Committee, the CCBF Board nor the Bank Board may
decrease Executive's Base Salary below $232,000, and periodic increases, once
granted, shall not be subject to revocation. The annual review of Executive's
total compensation by the Compensation Committee will consider, among other
things, changes in the cost of living, Executive's own performance and CCBF's
consolidated performance.
(b) Incentive Plans. Commencing with the fiscal year beginning
January 1, 1999 and thereafter during the Employment Period, Executive shall be
entitled:
(i) to participate in CCBF's Executive Management
Incentive Plan ("EMIP"), and any successor or
substitute plan to the EMIP, in at least as favorable
a manner as any other senior executive employee
participant. CCBF's President and Chief Executive
Officer shall recommend annually to the Compensation
Committee appropriate minimum, target and maximum
performance objectives, and appropriate measures and
weights for the components of the performance
objectives, and minimum, target and maximum bonus
levels for Executive. Executive's annual minimum,
target and maximum bonus levels under the EMIP
initially shall be 0%, 50%, and 100% of Executive's
Base Salary for such year or such greater levels as
the Compensation Committee may determine Executive's
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individual performance warrants or as are necessary
to satisfy the provisions of the first sentence of
this item (i); and
(ii) to participate in CCBF's Long-Term Incentive Plan
("LTIP"), and any successor or substitute plan to the
LTIP, in at least as favorable a manner as any other
senior executive employee participant. Executive's
annual target award level under the LTIP initially
shall be 65% of Executive's Base Salary for such year
or such greater level as the Compensation Committee
may determine Executive's individual performance
warrants or as is necessary to satisfy the provisions
of the first sentence of this item (ii).
(c) Savings and Retirement Plans. During the Employment
Period, Executive shall be entitled to participate in all savings, pension and
retirement plans (including supplemental retirement plans), practices, policies
and programs (but not including, until such time as the Compensation Committee
of the CCBF Board shall determine otherwise, split-dollar life insurance
programs) applicable generally to senior executive employees of CCBF or CCB Bank
(the "Benefit Plans"), and on at least as favorable a basis as any other senior
executive employee participant. Without limiting the foregoing, Benefit Plans
shall include the CCB Financial Corporation Retirement Plan, the CCB Financial
Corporation Retirement Savings Plan, the CCB Financial Corporation Retirement
Income Equity Plan, the CCB Financial Corporation Retirement Savings Equity Plan
and any substitute and successor plan to any of the foregoing.
(d) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under all welfare benefit plans,
practices, policies and programs provided by CCBF or CCB Bank (including,
without limitation, medical, hospitalization, prescription, dental, disability,
employee life, group life, accidental death and dismemberment, and travel
accident, but not including, until such time as the Compensation Committee of
the CCBF Board shall determine otherwise, split-dollar life insurance programs)
to the extent applicable generally to senior executive employees of CCBF or CCB
Bank ("Welfare Benefit Plans").
(e) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of CCBF and
CCB Bank to the extent applicable generally to other senior executive employees
of CCBF or CCB Bank.
(f) Fringe and Similar Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance with the plans,
practices, programs and policies of CCBF and CCB Bank in effect for senior
executive employees of CCBF or CCB Bank. In addition to, and not in lieu of, any
other provision of this Agreement, Executive shall receive annually an allowance
equal to three percent (3%) of his Base Salary for such fiscal year under CCB
Bank's "Senior Officer Perquisites" policy, payable and available for such uses
as are set forth in such policy.
(g) Vacation, Sick and Other Leave. During the Employment
Period, Executive shall be entitled annually to a minimum of twenty (20)
business days of paid vacation and shall be entitled to those number of business
days of paid disability, sick and other leave specified in the employment
policies of CCBF or CCB Bank.
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(h) Allocation. CCBF and CCB Bank may allocate between them
for accounting and taxation purposes the payment of compensation to Executive
under this Agreement on the basis of such factors as they deem relevant and
appropriate; provided, however, that CCBF and CCB Bank shall be jointly and
severally liable and obligated to fulfill all obligations to Executive under
this Agreement.
7. Termination of Employment (Other Than In Connection With A Change Of
Control).
(a) Death or Disability. Executive's employment with CCBF and
CCB Bank shall terminate automatically upon Executive's death during the
Employment Period. If the CCBF Board and the Bank Board determine in good faith
that the Disability of Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), they may give to
Executive written notice in accordance with Section 7(d) and 16(g) of this
Agreement of their intention to terminate Executive's employment. In such event,
Executive's employment with CCBF and CCB Bank shall terminate effective on the
60th day after receipt of such written notice by Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt,
Executive shall not have returned to full-time performance of Executive's
duties. For purposes of this Agreement, "Disability" shall mean the absence of
Executive from Executive's duties with CCBF and CCB Bank on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or
physical illness or injury which is determined to be total and permanent by a
physician selected by the CCBF Board and the Bank Board, or the insurers of CCBF
and CCB Bank, and acceptable to Executive or Executive's legal representative,
which acceptance shall not be unreasonably withheld, subject to (i) CCBF's and
CCB Bank's obligations, and Executive's rights, under (A) the Americans With
Disabilities Act, 42 U.S.C. ss.ss.1210 ET SEQ., and (B) the Family and Medical
Leave Act, 29 U.S.C. ss.ss.2601 ET SEQ. (and the regulations promulgated under
the foregoing Acts), and (ii) the exclusion from such 180 business day
calculation of any business days constituting vacation days under Section 6(g)
and any business days which an employee is permitted to be absent under the
disability, sick or other leave policies of CCBF or CCB Bank.
(b) Cause. During the Employment Period, CCBF and CCB Bank may
terminate Executive's employment with CCBF and CCB Bank without Cause or for
Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to
perform substantially Executive's duties with CCBF
and CCB Bank, other than any such failure resulting
from Disability, after a written demand for
substantial performance is jointly delivered to
Executive by the CCBF Board and the Bank Board which
specifically identifies the manner in which the CCBF
Board and the Bank Board believe that Executive has
not substantially performed Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct
or gross misconduct which is materially and
demonstrably injurious to CCBF and CCB Bank.
For purposes of this provision, no act or failure to act on the part of
Executive shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of CCBF and CCB Bank. Any act, or
failure to act, based upon authority given pursuant to resolutions duly adopted
by the CCBF Board or the Bank Board or based upon the advice of counsel for CCBF
or CCB Bank shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of CCBF and CCB Bank. The
cessation of employment of Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to Executive copies of resolutions
duly adopted by the affirmative votes of not
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less than three-quarters (3/4) of the entire membership of each of the CCBF
Board and the Bank Board at meetings of such Boards called and held for such
purpose (after reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel, to be heard before the CCBF Board and the
Bank Board), finding that, in the good faith opinion of each such Board,
Executive is guilty of the conduct described in items (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. During the Employment Period, Executive's
employment may be terminated by Executive for Good Reason. Such a termination
shall not be deemed a resignation. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to Executive of any duties or
responsibilities inconsistent in any respect with
Executive's positions (including status, offices,
titles, and reporting requirements), authority,
duties, prerogatives or responsibilities as
contemplated by Section 3 of this Agreement, or any
other action by CCBF or CCB Bank which results in a
diminution in such positions, authority, duties,
prerogatives or responsibilities, excluding for these
purposes an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied
by CCBF or CCB Bank, as applicable, promptly after
receipt of notice thereof given by Executive;
(ii) any failure by CCBF or CCB Bank to comply with any of
the provisions of Section 6 of this Agreement, other
than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is
remedied by CCBF or CCB Bank, as applicable, promptly
after receipt of notice thereof given by Executive;
(iii) the requirement by CCBF and/or CCB Bank that
Executive, without his consent, be based or conduct
on an on-going basis more than ten percent (10%) of
his activities under this Agreement at any office or
location more than 35 miles (by most direct highway
route) from the location of the headquarters building
of CCBF and CCB Bank in Durham, North Carolina as of
the Effective Date;
(iv) any purported termination of Executive's employment
under this Agreement other than as expressly
permitted by this Agreement; or
(v) any failure by CCBF and/or CCB Bank to comply with
and satisfy Section 14(b) of this Agreement.
For purposes of this Section 7(c), any good faith determination of "Good Reason"
made by Executive shall be conclusive.
(d) Notice of Termination. Any termination by CCBF and CCB
Bank for Disability or for or without Cause or by Executive for Good Reason
shall be communicated by Notice of Termination to the other party thereto given
in accordance with Section 16(g) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving of such notice
except as otherwise provided in Section 7(a)). The failure by Executive or CCBF
and CCB Bank to set forth in the Notice of Termination any fact or circumstance
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which contributes to a showing of Disability, Cause or Good Reason shall not
waive any right of Executive or CCBF and CCB Bank hereunder or preclude
Executive or CCBF and CCB Bank from asserting such fact or circumstance in
enforcing Executive's or CCBF's and CCB Bank's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by CCBF and CCB Bank for Cause or by
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if Executive's
employment is terminated by CCBF and CCB Bank other than for Cause or Disability
or other than by reason of death, the date of receipt of the Notice of
Termination, and (iii) if Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be.
8. Obligations of CCBF and CCB Bank Upon Termination (Other Than In
Connection With A Change Of Control).
(a) Other Than for Cause, Death or Disability. If, during the
Employment Period, CCBF shall terminate Executive's employment other than for
Cause, death or Disability, or Executive shall terminate his employment for Good
Reason (and, in each case, other than in connection with a Change of Control),
then in consideration of Executive's services rendered prior to such
termination:
(i) CCBF and CCB Bank shall pay to Executive a lump sum
in cash within 30 days after the Date of Termination
the aggregate of the following amounts:
A. the sum of (1) Executive's Base Salary
through the Date of Termination to the
extent not theretofore paid, (2) the product
of (x) Executive's "target" bonus for the
then current fiscal year under the EMIP as
described in Section 6(b)(i) above ("Target
EMIP Bonus"), and (y) a fraction, the
numerator of which is the number of days in
the current fiscal year through the Date of
Termination, and the denominator of which is
365, and (3) any compensation previously
deferred by Executive (together with any
accrued interest or earnings thereon) and
any accrued vacation pay, in each case to
the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2),
and (3) shall be hereinafter referred to as
the "Accrued Obligations"); and
B. the amount equal to the product of (1) the
number of days remaining in the Employment
Period (which, at all times prior to October
26, 2000, shall be deemed to be 730 days
notwithstanding any other provision of this
Agreement) from and after the Date of
Termination (the "Remaining Employment
Period"), and (2) Executive's Base Salary
divided by 365; and
C. the amount equal to the product of (1) the
number of days in the Remaining Employment
Period, and (2) Executive's Target EMIP
Bonus divided by 365; and
D. an amount equal to the excess of (a) the
actuarial equivalent of Executive's benefits
under the Benefit Plans that are qualified
defined benefit retirement plans (utilizing
actuarial assumptions no less favorable
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to Executive than those in effect under the
CCB Financial Corporation Retirement Plan on
the Date of Termination) and any Benefit
Plans that are excess or supplemental
retirement plans in which Executive
participates which Executive would receive
if Executive's employment continued
throughout the Remaining Employment Period,
assuming for this purpose that all accrued
benefits are fully vested and assuming that
Executive's compensation in each remaining
year of the Employment Period is the Base
Salary plus the Target EMIP Bonus, over (b)
the actuarial equivalent of Executive's
actual benefits (paid or payable), if any,
under such Benefit Plans as of the Date of
Termination; and
(ii) CCBF shall immediately grant, if not theretofore
granted for the fiscal year in which the Date of
Termination occurs, an award under the LTIP of the
same type and in the same quantative amount as
Executive's "target" award under the LTIP for the
current fiscal year (the "Target LTIP Award"), which
award shall be vested and non-forfeitable as of the
Date of Termination (assuming for calculation
purposes that the LTIP's superior performance
objective for such fiscal year has been met) and
shall be exercisable on and after the first day
subsequent to the six (6) months following the date
of grant; and
(iii) for the Remaining Employment Period, or such longer
period as may be provided by the terms of the
appropriate plan, program, practice or policy, CCBF
and CCB Bank shall continue to provide benefits to
Executive and/or Executive's family at least equal to
those which would have been provided to them in
accordance with the Welfare Benefit Plans described
in Section 6(d) of this Agreement if Executive's
employment had not been terminated; provided,
however, that if Executive becomes re-employed with
another employer and is eligible to receive
substantially the same benefits under the other
employer's plans as Executive would receive under the
Welfare Benefit Plans under this item (iii), the
benefits under the Welfare Benefit Plans shall be
secondary to those provided under such other
employer's plans during such applicable period of
eligibility. For purposes of determining eligibility
and years-of-service credit (but not the time of
commencement of benefits) of Executive for retiree
benefits pursuant to such Welfare Benefit Plans,
Executive shall be considered to have remained
employed throughout the Remaining Employment Period
and to have retired on the last day of such period;
and
(iv) to the extent not theretofore paid or provided, CCBF
and CCB Bank shall timely pay or provide to Executive
any other amounts or benefits required to be paid or
provided herein or which Executive is eligible to
receive under any Welfare Benefit Plan or any other
plan, program, policy or practice or contract or
agreement of CCBF or CCB Bank (such other amounts and
benefits shall be hereinafter referred to as the
"Other Benefits"); and
(v) all options to acquire capital stock of CCBF
("Options") previously granted to Executive,
including those awarded under item (ii) above, that
are unvested on the Date of Termination shall be
deemed vested, fully exercisable and non-forfeitable
as of the Date of Termination and all previously
granted Options that are vested, but unexercised, on
the Date of Termination shall remain exercisable,
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in each case for the period during which they would
have been exercisable absent the termination of
Executive's employment;
(vi) provided, however, that notwithstanding any provision
of this Agreement to the contrary, Executive shall
forfeit his right to receive, or, to the extent such
amounts have previously been paid to Executive, shall
repay in full to CCBF or CCB Bank, as applicable,
with interest at 8% per annum within 30 days of a
final determination of Executive's liability therefor
as set forth below, the sum of the amounts described
in Section 8(a)(i)(B) and (C) of this Agreement if
any time during the Employment Period or the
Remaining Employment Period (the "Restricted Period")
Executive violates the restrictive covenants set
forth in Section 13 of this Agreement. Any
determination of whether Executive has violated such
covenants shall be made by arbitration in Durham,
North Carolina under the Rules of Commercial
Arbitration (the "Rules") of the American Arbitration
Association, which Rules are deemed to be
incorporated by reference herein.
(b) Death. If, during the Employment Period Executive's
employment is terminated by reason of Executive's death, this Agreement shall
terminate without further obligations to Executive's legal representatives under
this Agreement, except that; (i) Accrued Obligations shall timely be paid as
provided below; (ii) Other Benefits shall be timely paid or provided as
described below; and (iii) all Options previously granted to Executive that
vested at or prior to the Date of Termination shall remain exercisable for the
longer of twelve (12) months and the exercise period in effect immediately prior
to the Date of Termination. Additionally, if Executive's employment is
terminated by reason of death during the Employment Period, (i) all Options
previously granted to Executive and scheduled to vest in the year of death shall
immediately vest and be exercisable for the exercise period set forth in the
applicable grants, and (ii) Executive's rights to all benefits under all Benefit
Plans that are "non-qualified" plans shall be 100% vested, regardless of
Executive's age or years of service, at the time of Executive's death. Accrued
Obligations shall be paid to Executive's estate or beneficiary, as applicable,
in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 8(b) shall include, without limitation, and Executive's estate and/or
beneficiaries shall be entitled to receive, all benefits under CCBF's and CCB
Bank's plans, programs, practices and policies relating to death benefits, if
any, as are applicable generally to senior executive employees of CCBF or CCB
Bank and their beneficiaries, and on the same basis as such senior executive
employees and their beneficiaries. Without limiting the foregoing, for one (1)
year after Executive's death, CCBF and CCB Bank shall pay any premium required
for any "qualified beneficiary" to continue his or her health care coverage in
accordance with Title I, Part 6 of the Employee Retirement Security Act of 1974,
as amended.
(c) Disability. If, during the Employment Period, Executive's
employment is terminated by reason of Executive's Disability, this Agreement
shall terminate without further obligations to Executive, except that: (i)
Accrued Obligations shall be timely paid as provided below; (ii) Other Benefits
shall be timely paid or provided as described below; (iii) all Options that are"
incentive stock options" ("ISOs"), as described in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and that vested at or prior to
the Date of Termination shall remain exercisable for the lesser of twelve (12)
months and the period of exercise in effect immediately prior to the Date of
Termination; and (iv) all other Options that vested at or prior to the Date of
Termination shall remain exercisable for the period of exercise in effect
immediately prior to the Date of Termination. Additionally, if Executive's
employment is terminated by reason of Disability during the Employment Period,
all Options previously
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granted and scheduled to vest in the year in which the Date of Termination
occurs shall immediately vest and be exercisable (A) in the case of ISOs, for
twelve (12) months from the Date of Termination, and (B) in the case of Options
that are not ISOs, for the exercise period set forth in the applicable grant.
Accrued Obligations shall be paid to Executive in a lump sum in cash within 30
days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 8(c) shall
include, without limitation, and Executive shall be entitled after the Date of
Termination to receive, all disability and other benefits under all Welfare
Benefit Plans and all other plans, programs, practices, and policies of CCBF and
CCB Bank relating to disability, if any, as are applicable generally to senior
executive employees of CCBF and CCB Bank and their families, and on the same
basis as such senior executive employees and their families.
(d) Cause; Resignation. If Executive's employment shall be
terminated for Cause or Executive resigns during the Employment Period, this
Agreement shall terminate without further obligations to Executive, except that
(i) the Accrued Obligations shall be paid in a lump sum in cash within 30 days
of the Date of Termination, and (ii) Other Benefits shall be paid or provided in
a timely manner, in each case to the extent theretofore unpaid; provided,
however, that Executive's right to continue to participate in Welfare Benefit
Plans shall terminate on the 30th day following the Date of Termination, subject
to his rights under the Consolidated Omnibus Budget Reconciliation Act of 1985,
29 U.S.C. ss.1161 ET SEQ.
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9. Termination In Connection With a Change of Control.
(a) Change of Control Termination. In the event that during
the Employment Period, CCBF and CCB Bank terminate Executive's employment other
than for Cause or Disability or Executive terminates such employment for Good
Reason, in any of the foregoing cases within one (1) year after a Change of
Control (each a "Change of Control Termination"), Executive shall be entitled to
receive the payments and benefits specified in this Section 9. The date on which
CCBF and CCB Bank or Executive receives notice in accordance with Section 16(g)
of a Change of Control Termination shall be deemed the Change of Control
Termination Date.
(b) Definition of Change of Control. A Change of Control shall
be deemed to have occurred upon: (i) any "Person" or "Group" (as defined in or
pursuant to Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), but not including CCBF, CCB Bank, any other Subsidiary
or any "employee benefit plan" (as defined in or pursuant to the Employee
Retirement Income Security Act of 1974, 29 U.S.C. ss.1002(3), and as used herein
"Person" or "Group") becoming the "beneficial owner" (as defined in Rule 13d-3
under the 0000 Xxx) or otherwise acquiring control, directly or indirectly, of
securities of CCBF representing twenty-five percent (25%) or more of the voting
power of CCBF's then outstanding securities; (ii) the acquisition by any Person
or Group in any manner of the ability to elect, or to control the election, of a
majority of the directors of CCBF or CCB Bank; (iii) the merger of CCBF or CCB
Bank into another entity, the merger of any entity into CCBF or CCB Bank or the
acquisition of assets by CCBF or CCB Bank, in any such case with the result that
the beneficial owners of CCBF's and CCB Bank's outstanding securities
immediately prior to such transaction do not beneficially own more than sixty
percent (60%) of CCBF's and CCB Bank's outstanding securities after the
consummation of such transaction; (iv) the sale or other transfer of more than
fifty percent (50%) of the assets of CCBF or CCB Bank to any entity not
controlled by CCBF; (v) the consummation of any transaction by CCBF or CCB Bank
that results (A) in the majority of the Boards of Directors of CCBF and CCB Bank
after the consummation of such transaction not being composed of Incumbent
Directors, or (B) the beneficial owners of CCBF's outstanding securities
immediately prior to the consummation of such a transaction not beneficially
owning more than sixty percent (60%) of CCBF's outstanding securities after such
transaction; or (vi) the occurrence of any other event or circumstance which is
not described in the foregoing provisions of this Section 9(b) but which the
CCBF Board determines affects control of CCBF and/or CCB Bank and constitutes a
Change of Control for purposes of this Agreement. The term "Incumbent Director"
shall mean any director who as of the Effective Date was a member of the CCBF
Board or the Bank Board, or any individual becoming a member of the CCBF Board
or the Bank Board subsequent to the Effective Date whose election by CCBF
shareholders or by the shareholder of CCB Bank, as applicable, was recommended
by at least two-thirds (2/3) of the then Incumbent Directors on the CCBF Board
or the Bank Board, as applicable.
Notwithstanding the foregoing, a Change of Control shall not include
any transaction to which Executive consents in a writing specifically noting
this provision of this Agreement.
(c) Change of Control Payments and Benefits. Upon a
Change of Control Termination:
(i) CCBF and CCB Bank shall pay to Executive in
a lump sum in cash within 30 days after the
Change Of Control Termination Date the
aggregate of the following amounts:
(A) the sum of the Accrued Obligations;
and
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(B) an amount equal to two (2) times the
total of Executive's Base Salary and
Target EMIP Bonus (2.99 times the
total of Executive's Base Salary and
Target EMIP Bonus if the Change Of
Control Termination Date is after
October 25, 2000); and
(C) an amount equal to the excess of (a)
the actuarial equivalent of the
benefits under CCBF's Benefit Plans
that are qualified defined benefit
retirement plans (utilizing
actuarial assumptions no less
favorable to Executive than those in
effect under the CCB Financial
Corporation Retirement Plan on the
Change of Control Termination Date)
and any Benefit Plan that are excess
or supplemental retirement plans in
which Executive participates which
Executive would receive if
Executive's employment continued
throughout the Remaining Employment
Period, assuming for this purpose
that all accrued benefits are fully
vested, and, assuming that
Executive's compensation in each
remaining year of the Employment
Period is the Base Salary plus the
Target EMIP Bonus, over (b) the
actuarial equivalent of Executive's
actual benefits (paid or payable),
if any, under such Benefit Plans as
of the Change of Control Termination
Date; and
(ii) Unless the relevant Change of Control is a
merger of CCBF or CCB Bank with another
Person or entity which is intended to be
accounted for under the pooling-of-interests
method and which has been approved by the
vote of such number of Incumbent Directors
as comprised a majority of the CCBF Board or
the Bank Board, as applicable, CCBF shall
immediately grant, if not theretofore
granted for the fiscal year in which the
Change of Control Termination Date occurs,
an award under the LTIP of the same type and
in the same quantative amount as the Target
LTIP Award, which award shall be vested and
non-forfeitable as of the Change of Control
Termination Date (assuming for calculation
purposes that the LTIP's superior
performance objective for such fiscal year
has been met) and shall be exercisable on
and after the first day subsequent to the
six (6) months following the date of grant;
and
(iii) CCBF shall immediately grant, if not
theretofore granted for the fiscal year in
which the Date of Termination occurs, an
award under the EMIP of the same type and in
the same quantitive amount as the Target
EMIP Bonus, which award shall be distributed
as of the Change of Control Termination Date
(assuming for calculation purposes that the
EMIP's maximum performance objective for
such fiscal year has been met); and
(iv) for the number of days remaining in the
Employment Period (which, at all times prior
to October 26, 2000, shall be deemed to be
730 days notwithstanding any other provision
of this Agreement) from and after the Change
of Control Termination Date (the "Continuing
Period"), or such longer period as may be
provided by the terms of the appropriate
plan, program, practice or policy, CCBF and
CCB Bank shall continue benefits to
Executive and/or Executive's family at least
equal to those which would have been
provided to them in accordance with the
Welfare
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Benefit Plans described in Section 6(d) of
this Agreement if Executive's employment had
not been terminated; provided, however, that
if Executive becomes re-employed with
another employer and is eligible to receive
substantially the same benefits under the
other employer's plans as Executive would
receive under the Welfare Benefit Plans
under this item (iv), the benefits under the
Welfare Benefit Plans shall be secondary to
those provided under such other plans during
such applicable period of eligibility. For
purposes of determining eligibility and
years-of-service credit (but not the time of
commencement of benefits) of Executive for
retiree benefits pursuant to such Welfare
Benefit Plans, Executive shall be considered
to have remained employed through the
Continuing Period and to have retired on the
last day of such period; and
(v) all Options previously granted to Executive
that are unvested as of the Change of
Control Termination Date shall be deemed
vested, fully exercisable and
non-forfeitable as of the Change of Control
Termination Date (provided, however, that
Options granted less than six (6) months
before the Change of Control Termination
Date shall not be exercisable until the
first day subsequent to the six (6) months
following their dates of grant) and all
previously granted Options that are vested,
but unexercised, on the Change of Control
Termination Date shall remain exercisable,
in each case for the period during which
they would have been exercisable absent the
termination of Executive's employment; and
(vi) Executive's benefits under all Benefit Plans
that are non-qualified plans shall be 100%
vested, regardless of Executive's age or
years of service, as of the Change of
Control Termination Date.
10. Additional Payments
(a) Amount of Additional Payments. Anything in this Agreement
seemingly to the contrary notwithstanding, in the event it shall be determined
that any or the aggregate of all payments, distributions, accelerations of
vesting, awards and provisions of benefits by CCBF and/or CCB Bank to or for the
benefit of the Executive (whether paid or payable, distributed or distributable,
accelerated, awarded or provided pursuant to the terms of this Agreement or
otherwise) (a "Payment") would constitute an "excess parachute payment" within
the meaning of Section 280G of the Code and subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then prior to the making of any
Payment to the Executive, a calculation shall be made of the amount of the
Excise Tax and an additional cash payment (the "Additional Payment") shall be
promptly made to the Executive in the sum of (i) the Excise Tax and (ii) the
total of any Excise Tax and income tax or any other tax payable on the amounts
specified in item (i) and this item (ii). In addition, if it shall be determined
at any time by reference to Internal Revenue Service ("IRS") regulations or
rulings, as a consequence of IRS audits or assessments of Executive (or in
settlement thereof), by reference to the terms of the final judgment of a court
or other judicial body of competent jurisdiction or as a result of other similar
events requiring Executive to pay an Excise Tax or any income or other excise
tax on the amounts specified in this Section 10(a), that an Additional Payment
made was less than the sums specified in items (i) and (ii) above, CCBF and CCB
Bank promptly shall make a further cash payment to Executive in the sum of (x)
such deficit and (y) any Excise Tax and any income tax or any other tax on such
further cash payment.
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(b) Determination of Excise Tax and Other Amounts. The
determination of whether an Excise Tax would be imposed, the amount of such
Excise Tax, and the calculation of the amounts referred to in Section 10(a)
shall be made by CCBF's and CCB Bank's regular independent accounting firm or,
at the election of Executive, another nationally recognized independent
accounting firm (either, the "Accounting Firm") which shall provide detailed
supporting analyses and calculations. All fees and expenses of the Accounting
Firm shall be borne solely by CCBF and CCB Bank. Any determination by the
Accounting Firm shall be binding upon CCBF, CCB Bank and Executive.
11. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any plan, program,
policy, or practice provided by CCBF, CCB Bank or any other Subsidiary and for
which Executive may qualify, nor, subject to Section 14(e), shall anything
herein limit or otherwise affect such rights as Executive may have under any
contract or agreement with CCBF, CCB Bank or any other Subsidiary. Amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with CCBF,
CCB Bank or other Subsidiary at or subsequent to a Date of Termination or Change
of Control Termination Date shall be payable in accordance with such plan,
policy, practice or program or such contract or agreement except as explicitly
modified by this Agreement.
12. Full Settlement. CCBF's and CCB Bank's obligation to make the
payments provided for in this Agreement and otherwise to perform their
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which CCBF or CCB Bank may
have against Executive or others. In no event shall Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this Agreement;
provided, however, that Executive's right to receive benefits under Welfare
Benefit Plans to the extent that Executive obtains other employment shall be
limited as provided in Sections 8(a)(iii) and 9(c)(iv). CCBF and CCB Bank agree
to pay as incurred, to the full extent permitted by law, all legal fees and
expenses which Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by CCBF and CCB Bank, Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the "applicable
federal rate" provided for in Section 7872(f)(2)(A) of the Code.
13. Covenants.
(a) Covenant Not to Compete. During the Restricted Period,
Executive shall not, within the States of North Carolina and South Carolina,
directly or indirectly, in any capacity, render his services, or engage or have
a financial interest in, any business that shall be competitive with any of
those business activities in which CCBF or any of its Subsidiaries that are
financial institutions is engaged as of the date of this Agreement (a
"Competition"), which business activities include the provision of banking
services (collectively, the "Business"); provided, however, that Executive's
ownership of less than three percent (3%) of the outstanding securities of any
Competitor that has a class of securities listed on a securities exchange or
qualified for quotation on any over-the-counter market shall not be a violation
of the foregoing. If a court determines that the foregoing restrictions are too
broad or otherwise unreasonable under applicable law, including with respect to
time, scope or territory, the court is hereby requested and authorized by the
parties hereto to revise the foregoing restrictions to include the maximum
restrictions allowable under applicable law.
14
(b) Covenant Not to Solicit Customers. During the Restricted
Period, Executive shall not, directly or indirectly, individually or on behalf
of any other person or entity (other than CCBF or a Subsidiary), solicit the
provision of banking services to any person, partnership, corporation or other
entity who is or was (i) a customer of any Subsidiary during any part of the
twelve (12) month period immediately prior to the Date of Termination, or (ii) a
potential customer to whom any Subsidiary solicited the provision of banking
services during any part of the twelve (12) month period immediately prior to
the Date of Termination.
(c) Covenant Not to Solicit Employees. During the Restricted
Period, Executive shall not, directly or indirectly, individually or on behalf
of any other person or entity, solicit, recruit or entice, directly or
indirectly, any employee of CCBF or any Subsidiary to leave the employment of
CCBF or such Subsidiary to work with Executive or with any person, partnership,
corporation or other entity with whom Executive is or becomes affiliated or
associated.
(d) Reasonableness of Scope and Duration. The parties hereto
agree that the covenants and agreements contained in this Section 13 are
reasonable in their time, territory and scope, and they intend that they be
enforced, and no party shall raise any issue of the reasonableness of the time,
territory or scope of any such covenants in any proceeding to enforce any such
covenants.
(e) Enforceability. Executive agrees that monetary damages
would not be a sufficient remedy for any breach or threatened breach of the
provisions of this Section 13, and that in addition to all other rights and
remedies available to CCBF, CCBF shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach or
threatened breach.
(f) Separate Covenants and Severability. The covenants and
agreements contained in this Section 13 shall be construed as separate and
independent covenants. Should any part or provision of any such covenant or
agreement be held invalid, void or unenforceable in any court of competent
jurisdiction, no other part or provision of this Agreement shall be rendered
invalid, void or unenforceable by a court of competent jurisdiction, no other
part or provision of this Agreement shall be rendered invalid, void or
unenforceable as a result. If any portion of the foregoing provisions is found
to be invalid or unenforceable by a court of competent jurisdiction unless
modified, it is the intent of the parties that the otherwise invalid or
unreasonable term shall be reformed, or a new enforceable term provided, so as
to most closely effectuate the provisions as is validly possible.
(g) Inapplicability. The provisions of this Section 13 shall
not be operative upon, or be in any way enforceable against, Executive at or
after a Change of Control Termination or a termination of Executive's employment
by CCBF and CCB Bank during the Employment Period other than for Cause, death or
Disability (i.e., a termination without Cause).
14. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and
without the prior written consent of CCBF and CCB Bank shall not be assignable
by Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by Executive's
legal representatives.
15
(b) CCBF and CCB Bank. This Agreement shall inure to the
benefit of and be binding upon CCBF and CCB Bank and their respective successors
and assigns. Each of CCBF and CCB Bank will require any successor to it (whether
direct or indirect, by stock or asset purchase, merger, consolidation or
otherwise) to all or substantially all of its business or more than fifty
percent (50%) of its assets to assume expressly and agree to perform this
Agreement in the same manner and to the same extent it would be required to
perform it if no such succession had taken place. As used in this Agreement,
"CCBF" and "CCB Bank" shall mean CCBF and CCB Bank as hereinbefore defined and
any successor to their respective businesses and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.
15. Regulatory Intervention. Notwithstanding anything in this Agreement
to the contrary, the obligations of CCBF and CCB Bank under this Agreement are
subject to the following terms and conditions:
(a) If the Executive is suspended and/or temporarily
prohibited from participating in the conduct of CCBF's or CCB Bank's affairs by
a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act (12 U.S.C. ss.1818 (e)(3) and (g)(1)), CCBF's or CCB Bank's obligations
hereunder, as applicable, shall be suspended as of the date of service unless
stayed by appropriate proceedings. If the charges in the notice are dismissed,
all of CCBF's or CCB Bank's obligations, as applicable, which were suspended
shall be reinstated.
(b) If Executive is removed and/or permanently prohibited from
participating in the conduct of CCBF's or CCB 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.
ss.1818 (e)(4) and (g)(1)), all obligations of CCBF or CCB Bank, as applicable,
under this Agreement shall terminate as of the effective date of the order, but
vested rights of the parties shall not be affected.
(c) If CCB Bank is in default (as defined in Section 3(x)(1)
of the Federal Deposit Insurance Act (12 U.S. C. ss.1813 (x)(1)), all
obligations of CCB Bank under this Agreement shall terminate as of the date of
default, but any vested rights of Executive shall not be affected.
(d) All obligations of CCB Bank under this Agreement shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of CCB Bank, if so ordered by the North
Carolina Commissioner of Banks (the "Commissioner") at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an agreement to provide
assistance to or on behalf of CCB Bank under the authority contained in Section
13(c) of the Federal Deposit Insurance Act (12 U.S.C. ss.1823 (c)), or if so
ordered by the Commissioner at the time the FDIC approves a supervisory merger
to resolve problems related to operation of CCB Bank or when CCB Bank is
determined by the Commissioner to be in an unsafe or unsound condition. Any
rights of Executive that shall have vested under this Agreement shall not be
affected by such action.
(e) With regard to the provisions of this Section 15(a)
through (d):
(i) CCBF and CCB Bank agree to use their best efforts to
oppose any such notice of charges as to which there
are reasonable defenses;
(ii) In the event the notice of charges is dismissed or
otherwise resolved in a manner that will permit CCBF
and/or CCB Bank to resume their obligations to pay
compensation hereunder, CCBF and/or CCB Bank will
promptly make such payment hereunder; and
16
(iii) During any period of suspension under Section 15(a),
the vested rights of Executive shall not be affected
except to the extent precluded by such notice.
(f) CCB Bank's obligations to provide compensation or other
benefits to Executive under this Agreement shall be terminated or limited to the
extent required by the provisions of any final regulation or order of the FDIC
promulgated under Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1828(k)) limiting or prohibiting any "golden parachute payment" as defined
therein, but only to the extent that the compensation or payments to be provided
by CCB Bank under this Agreement are so prohibited or limited.
(g) It is intended by CCBF, CCB Bank and Executive that if
only one of CCBF and CCB Bank is prohibited from fulfilling its obligations
under this Agreement in any of the circumstances described in the above
provisions of this Section 15 (whether for a period or permanently), the other
shall remain obligated to fulfill all obligations of CCBF and CCB Bank under
this Agreement.
16. Miscellaneous.
(a) No Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise and, except as provided in Sections 8(b)(iv) and
9(c)(iv), no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.
(b) Waiver. Failure of either part 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.
(c) Severability. If any provision or covenant, of 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.
(d) Other Agents. Nothing in this Agreement is to be
interpreted as limiting CCBF or CCB Bank from employing other personnel on such
terms and conditions as may be satisfactory to it.
(e) Entire Agreement. Except as provided herein, this
Agreement contains the entire agreement among CCBF, CCB Bank and Executive, with
respect to the subject matter hereof and supersedes and invalidates any previous
employment and severance agreements or contracts with Executive. No
representations, inducements, promises or agreements, oral or otherwise, which
are not embodied herein, shall be of any force or effect.
(f) Governing Law. Except to the extent preempted by federal
law, the laws of the State of North Carolina shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or
otherwise.
17
(g) 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 (7) days after mailing if
mailed, first class, certified mail, postage prepaid:
To CCBF and CCB Bank:
CCB Financial Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Chairman of the Board
To Executive:
Xxxxxxx X. Xxx
000 Xxxx Xxxx Xxxxx
Xxxxxxx, 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.
(h) Amendments and Modifications. This Agreement may be
amended or modified only by a writing signed by all parties hereto, which makes
specific reference to this Agreement.
18
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Amended and Restated Employment Agreement as of August 1, 1999.
CCB FINANCIAL CORPORATION
By:/s/ XXXXXX X. XXXXXXXX
---------------------------------------------
Xxxxxx X. Xxxxxxxx, Chairman, President
and Chief Executive Officer
CENTRAL CAROLINA BANK AND
TRUST COMPANY
By:/s/ XXXXXX X. XXXXXXXX
---------------------------------------------
Xxxxxx X. Xxxxxxxx, Chairman, President
and Chief Executive Officer
EXECUTIVE:
/s/ XXXXXXX X. XXX
------------------------------------------------
Xxxxxxx X. Xxx
19
