THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT.
EMPLOYMENT AGREEMENT
This Agreement is entered into as of the 31st day of October, 2001 by
and between COMMUNITY RESOURCE MORTGAGE, INC. (the "Company"), a wholly owned
subsidiary of COMMUNITY BANKSHARES, INC. ("CBI"), and XXXX XXXXXXX (the
"Employee").
RECITALS:
A. The Employee is, as of the date hereof, employed by the Company as
an executive officer, and the Company desires to insure the Employee's continued
employment with the Company.
B. The Company and the Employee mutually desire that their employment
relationship be set forth under the terms of a written employment agreement.
In consideration of the foregoing and of the promises and mutual
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows :
1. Employment. The Company agrees to employ the Employee, and the
Employee agrees to serve the Company, on the terms and conditions, set forth
herein.
2. Term of Employment. The employment of the Employee by the Company,
as provided under Section 1, shall commence on the date hereof and end on
October 31, 2004 (the "Term of Employment") unless further extended in writing
with the express reference to this Agreement or sooner terminated as hereinafter
provided. Commencing on the third anniversary of the date of this Agreement, and
on each annual anniversary thereafter, the Term of Employment shall
automatically be extended for an additional year unless 90 days prior to the
anniversary the company gives notice to the Employee that the Term of Employment
will not be extended. The provisions of this Agreement related to Employee's
employment, other than the "Change of Control" provisions contained in Section
6.b. will not apply after the Term of Employment has expired and any continuing
employment of the Employee thereafter will be at-will and not subject to the
terms and conditions of this Agreement, except as provided expressly herein.
3. Position and Duties. The Employee shall serve on a full-time basis
as President of the Company and shall be responsible for all duties, authorities
and responsibilities as set forth in the Bylaws of the Company and shall assume
such additional responsibilities and authority as may from time to time be
assigned to him by the Board of Directors of the Company. The Employee shall
perform his responsibilities and duties in the best interests of the Company and
CBI.
4. Place of Performance. In connection with the Employee's employment
hereunder, the Employee shall be based initially at the Company's office located
in Columbia, South Carolina, subject to reasonable travel or relocation
necessary to the business of the Company.
5. Compensation and Benefits. In consideration of the Employee's
performance of his duties hereunder, the Company shall provide the Employee with
the following compensation and benefits during the term of his employment
hereunder.
a. Base Salary. During his full-time employment, Employee
shall receive a per annum base salary of $96,000.00, payable in equal
installments in arrears on the last day of the month or on such other
payroll schedule as is used by the Company for other employees. During
the term of the Employee's employment under this Agreement, the
Company's Board of Directors periodically will review and may increase
(but not decrease) the Employee's base salary rate, all in accordance
with the Company's salary administration policies and procedures in
effect from time to time; and each change in the base salary amount
listed in this Section shall become the new base salary amount. The
Company shall have no obligation to increase the Employee's base salary
rate at any particular time or in any particular amount, and any such
increase shall be in the sole and absolute discretion of the Board of
Directors of the Company.
b. Bonus and Incentive Compensation. The Company shall pay to
the Employee with respect to each fiscal year during the term of the
Employee's employment hereunder, such cash bonus as shall be determined
pursuant to a bonus plan adopted by the Board of Directors of the
Company for key employees. In addition, and without diminution of any
other compensation or benefit provided for in this Agreement, the
Employee may be given the opportunity to participate in certain
incentive compensation plans that may be adopted by the Company or in
such plans that may be adopted or sponsored by the CBI, which
participation opportunity may be offered to the Employee in the sole
discretion of CBI and the Company.
c. Expenses. The Company, as applicable, shall reimburse the
Employee for all proper and reasonable out-of-pocket expenses incurred
by the Employee in his performance of services hereunder, including all
such expenses of travel and living expense while away from home on
business of the Company, provided that such expenses are incurred and
accounted for in accordance with the regular policies and procedures
established by the Company from time to time.
d. Vacations. The Employee shall be entitled to the number of
vacation days in each calendar year, determined in accordance with the
Company's vacation plan as applicable to the Employee, as well as to
all paid holidays provided by the Company to its employees.
6. Compensation and Benefits in the Event of Termination. In the event
of the termination of the Employee's employment by the Company or by the
Employee during the term of this Agreement, compensation and benefits shall be
paid as set forth below.
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a. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated:
(i) "Cause" shall mean
(A) the breach by Employee of any material
provision of this Agreement, provided that Company
gives the Employee written notice of such failure and
such failure is not cured within thirty (30) days
thereafter;
(B) the willful and continued failure by the
Employee to substantially perform his duties under
this Agreement (other than the Employee's inability
to perform, with or without reasonable accommodation,
resulting from his incapacity due to physical or
mental illness or impairment), after a demand for
substantial performance is delivered to him by the
Company, which demand specifically identifies the
manner in which the Employee is alleged to have not
substantially performed his duties;
(C) the willful engaging by the Employee in
misconduct (criminal, immoral or otherwise) which is
materially injurious to the Company, CBI, or either
of their officers, directors, shareholders,
employees, or customers, monetarily or otherwise;
(D) the Employee's conviction of a felony;
or
(E) the commission in the course of the
Employee's employment of an act of fraud,
embezzlement, theft or proven dishonesty, or any
other illegal act or practice, which would constitute
a felony, (whether or not resulting in criminal
prosecution or conviction), or any act or practice
which the Company shall, in good faith, deem to have
resulted in the Employee's becoming unbondable under
CBI's "banker's blanket bond."
(ii) A "Change of Control" of the Company shall be
deemed to have been effected for purposes of this agreement if
either:
(A) voting control of CBI is acquired,
directly or indirectly, by any person or group acting
in concert,
(B) CBI is merged with or into any other
entity and CBI is not the surviving entity of the
merger,
(C) voting control of any subsidiary of CBI
by which subsidiary Employee is principally employed
is acquired, directly or indirectly, by any person or
group acting in concert, or
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(D) any subsidiary of CBI by which employee
is principally employed is merged with or into
another entity which is not also a subsidiary of CBI
and such subsidiary is not the surviving entity of
the merger.
(iii) "Date of Termination" shall mean:
(A) if the Employee's employment is
terminated by reason of his death, his date of death;
(B) if the Employee's employment is
terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the
Employee shall not have returned to the performance
of his duties as provided under sub-paragraph (iv) of
this paragraph a; or
(C) if the Employee's employment is
terminated by action of either party for any other
reason, the date specified in the Notice of
Termination; provided, however, that if within thirty
(30) days after any Notice of Termination is given,
the party receiving such Notice of Termination
notifies the other party that a dispute exists
concerning the termination, the Date of Termination
shall be the date on which the dispute is finally
resolved, either by mutual written agreement of the
parties, or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been
perfected).
(iv) "Disability" shall mean the Employee's failure
to satisfactorily perform the essential functions of his
office on a full-time basis for one hundred and eighty (180)
consecutive days, with or without accommodation, by reason of
the Employee's incapacity resulting from physical or mental
illness or impairment, except where within fifteen (15) days
after Notice of Termination is given following such absence,
the Employee shall have returned to the satisfactory, full
time performance of such duties. Any determination of
Disability hereunder shall be made by the Board of Directors
of the Company in good faith and on the basis of the
certificates of at least three (3) qualified physicians chosen
by it for such purpose, one (1) of whom shall be the
Employee's regular attending physician.
(v) "Good Reason" shall mean either:
(A) Failure by the Company to comply with
any material provision of this Agreement, provided
that the Employee gives the Company written notice of
such failure and such failure is not cured within
thirty (30) days thereafter;
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(B) Failure by the Company to obtain the
assumption of its obligations under this Agreement by
any successor;
(C) The failure by the Company to comply
with Section 5 of this Agreement; or
(D) Any purported termination of the
Employee's employment by action of the Company which
is not effected pursuant to a Notice of Termination.
(vi) "Notice of Termination" shall mean a written
notice which shall include the specific termination provision
under this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment.
Any purported termination of the Employee's employment
hereunder by action of either party shall be communicated by
delivery of a Notice of Termination to the other party.
(vii) "Retirement" shall mean termination of the
Employee's employment pursuant to the Company's regular
retirement policy applicable to the position held by the
Employee at the time of such termination.
b. Termination Within Six Months After a Change of Control.
(i) If Employee terminates his employment with the
Company or is terminated by the Company with a Date of
Termination within six months following the effective date of
a Change of Control, upon such termination Employee shall be
entitled to a lump sum payment equal to twice the Employee's
annual base salary amount in effect at the Date of
Termination. If, however, the amount of any such lump sum
payment, plus any other amount treated as a parachute payment
under Section 280G of the Internal Revenue Code, as amended,
(the "Code") equals or exceeds the base amount described in
such Section 280G, then the amount due hereunder shall be
adjusted to have a value of three times the base amount under
Section 280G less $100.
(ii) This paragraph b. shall initially be effective
for a period of five years from the effective date of this
Agreement; provided, however, that commencing on the first
anniversary after the date of this Agreement, and on each
annual anniversary thereafter, the effectiveness of this
paragraph b. shall automatically be extended for an additional
year, unless 30 days prior to the anniversary the Company
gives notice to the Employee that the effectiveness of this
paragraph b. will not be extended.
(iii) Any amount paid under this paragraph b. will be
deemed severance pay. Employee will be under any duty to
mitigate damages and no income received by employee thereafter
shall reduce the amount due Employee hereunder.
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(iv) If Employee should die after the occurrence of a
Change of Control and while any amount would still be payable
to Employee hereunder if Employee had continue to live but not
be in the employ of the Company, all such amounts, unless
otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to Employee's devisee or other
designee or, if there be no such devisee or designee, to
Employee's estate.
c. Termination For Cause, Disability, Death, Retirement or
Other Than for Good Reason. If the Employee's employment hereunder is
terminated during the Term of Employment by action of the Company for
Cause; by action of the Employee not for Good Reason, or by reason of
the Employee's death, Disability or Retirement and the provisions of
paragraph b above do not apply, the following compensation and benefits
shall be paid and provided the Employee (or his beneficiary):
(i) The Employee's base salary provided under
paragraph a. of Section 5 through the last day of the month in
which the Date of Termination occurs, at the annual rate in
effect at the time Notice of Termination is given (or death
occurs), to the extent unpaid prior to such Date of
Termination;
(ii) Any bonus under paragraph b. of Section 5 which
has been awarded prior to the Date of Termination, to the
extent unpaid prior to such date;
(iii) Any benefits to which the Employee (or his
beneficiary) may be entitled as a result of such termination,
under the terms and conditions of the pertinent plans or
arrangements in effect at the time of the Notice of
Termination under paragraph d. of Section 5; and
(iv) Any amounts due the Employee with respect to
paragraph c. of Section 5 as of the Date of Termination.
d. Termination for Good Reason or Other Than For Cause,
Disability, Death or Retirement. In the event the Employee's employment
hereunder is terminated during the Term of Employment other than by
reason of the Employee's death, Disability or Retirement, and by action
of the Employee for Good Reason, or by action of the Company other than
for Cause, and the provisions of paragraph b. above do not apply, the
Company shall pay and provide the Employee the compensation and
benefits stipulated under paragraph c. immediately above; provided,
however, in addition thereto and without setoff, the following
compensation shall be paid and provided the Employee:
(i) For the remaining Term of Employment under this
Agreement,
(A) the Company shall continue to pay to the
Employee the base salary provided for in Section 5.a.
above (at the Employee's base salary rate provided
for in that Section immediately prior to the Date of
Termination) and,
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(B) at its sole cost and expense, the
Company will continue to provide the Employee with
the insurance coverages he would have had had he
remained as an employee of the Company or with
insurance coverages substantially equivalent thereto,
or, at the Company's request (and so long as such
coverage reasonably can be obtained by the Employee
himself), the Employee will obtain substantially
equivalent insurance coverages from insurance
companies chosen by him and the Company promptly will
reimburse Employee for premium costs actually
incurred by him from time to time for the same.
(ii) If termination pursuant to this paragraph c.
shall occur during the last twelve months of the term of this
Agreement, the Employee shall be entitled to receive the base
salary pursuant to Section 5a. and the insurance benefits
discussed immediately above for a period of twelve months
subsequent to such termination. The base salary shall continue
to be payable in equal installments in arrears on the last day
of the month; provided, however if the payment under this
paragraph, either alone or together with other payments which
the Employee has the right to receive from the Company, would
constitute a "parachute payment" (as defined in Section 280G
of the Code) then the amount due hereunder shall be adjusted
to have a value of three times the base amount under Section
280G less $100.
7. Confidentiality.
a. The Employee recognizes that his activities on behalf of
the Company require considerable responsibility and trust. Relying on
the ethical responsibilities and undivided loyalty of the Employee, the
Company has and will and CBI and its subsidiaries will in the future
entrust the Employee with highly sensitive confidential, restricted and
proprietary information involving Confidential Information (as defined
below).
b. For the purposes of this Agreement, "Confidential
Information" means any data or information, that is material to the
Company, CBI or the subsidiaries of CBI, and not generally known by the
public. To the extent consistent with the foregoing definition,
Confidential Information includes (without limitation): i. the sales
records, circulation, profit and performance reports, pricing manuals,
training manuals, selling and pricing procedures, financing methods of
the Company, CBI or the subsidiaries of CBI, and all other business
records of the Company, CBI or the subsidiaries of CBI; ii. the
identities of the customers of the Company, CBI or the subsidiaries of
CBI, their specific demands, and their current and anticipated
requirements for the products of the Company, CBI or the subsidiaries
of CBI. iii. the business plans and internal financial statements and
projections of the Company, CBI or the subsidiaries of CBI; and iv. the
specifics of any specialized products or services of the Company, CBI
or the subsidiary of CBI may offer or provide to its customers.
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c. The Employee recognizes the proprietary and sensitive
nature of the Company, CBI and its subsidiaries' Confidential
Information. The Employee agrees to abide by all of the Company's and
CBI's rules and procedures designed to protect their Confidential
Information and to preserve and maintain all such information in strict
confidence during the Employee's engagement with the Company and as
long thereafter as the Confidential Information remains, in the sole
opinion of the Company, CBI and its Subsidiaries, proprietary and
confidential to the Company, CBI and its subsidiaries. The Employee
agrees not to use, disclose or in any other way use or disseminate any
Confidential Information to any person not properly authorized by the
Company, CBI or the subsidiaries of CBI.
8. Return of Materials. Upon the request of the Company, and in any
event, upon the termination of the Employee's employment, the Employee must
return to the Company, CBI or the subsidiaries of CBI and leave at the disposal
of the Company, CBI or the subsidiaries of CBI, all memoranda, notes, records,
and other documents pertaining to the business of the Company, CBI and the
subsidiaries of CBI, or the Employee's specific duties for such entities
(including all copies of such materials). The Employee must also return to the
Company, CBI and the subsidiaries of CBI, and leave at the disposal of the
Company, CBI and the subsidiaries of CBI, all materials involving any
Confidential Information of the respective entities.
9. Implementation. The covenants contained herein shall be construed as
covenants independent of one another, and as obligations distinct from any other
contract between the Employee and the Company. Any claim the Employee may have
against the Company shall not constitute a defense to enforcement by the Company
of this Agreement. The covenants made by the Employee herein shall survive
termination of the Employee's employment, regardless of who causes the
termination and under what circumstances.
10. Restrictive Covenant. In consideration of the Company's employment
of the Employee, the Employee agrees that, in addition to any other limitation,
prior to the end of the Term of Employment hereunder, the termination of this
Agreement or the completion of base salary payments pursuant to Section 6.d.
above, whichever is later, he will not, within a twenty-five (25) mile radius of
any operating office of CBI, any of its subsidiaries, or the Company, manage,
operate or be employed by, participate in, or be connected in any manner with
the management, operation, or control of any business engaged in the
origination, underwriting or funding of residential mortgage loans that are of a
type that can legally be originated, underwritten or funded by the Company, CBI
or its subsidiaries on the date of such termination. The Employee further
agrees, regardless of the circumstances of the termination of employment, that
for a period of twelve (12) months after the termination of his employment
hereunder, or the completion of Base Salary payments pursuant to section 6.d.
above, he will not solicit the business or patronage, directly or indirectly,
from any customers of the Company (or any other office of CBI or of a subsidiary
of CBI if Employee should have been employed by and located at such office) and
the Employee will not seek to or assist others to persuade any employee of the
Company engaged in similar work or related to the Company's work to discontinue
employment with the Company or seek employment or engage in any business of the
Company. Furthermore, the Employee will not communicate to any person, firm or
corporation any information related to customer lists, prices, secrets or other
Confidential Information which he might from time to time acquire with respect
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to the business of the Company, CBI, or its subsidiaries, or any of their
affiliates. The Employee agrees to disclose the contents of this Agreement to
any subsequent employer for a period of twelve (12) months following termination
of his employment hereunder, or completion of base salary payments pursuant to
6.d. above, whichever is later.
11. Remedies for Breach of Employment Contract. Irreparable harm shall
be presumed if the Employee breaches any covenant of this Agreement. The
faithful observance of all covenants in this Agreement is an essential condition
to the Employee's employment, and the Company, CBI and the subsidiaries of CBI
are depending upon absolute compliance. Damages would probably be very difficult
to ascertain if the Employee breached any covenant in this Agreement. This
Agreement is intended to protect the proprietary rights of the Company, CBI and
the subsidiaries of CBI in many important ways. In light of these facts, the
Employee agrees that any court of competent jurisdiction should immediately
enjoin any breach of this Agreement, upon the request of the Company, CBI the
subsidiaries of CBI, and the Employee specifically releases the Company, CBI,
and the subsidiaries of CBI, from the requirement to post any bond in connection
with a temporary or interlocutory injunctive relief, to the extent permitted by
law.
12. Withholding. Any provision of this Agreement to the contrary
notwithstanding, all payments made by the Company hereunder to the Employee or
his estate or beneficiaries shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company may
reasonably determine should be withheld pursuant to any applicable law or
regulation. In lieu of withholding such amounts, the Company may accept other
provisions to the end that they have sufficient funds to pay all taxes required
by law to be withheld in respect of any or all such payments.
13. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be sufficiently
given if and when mailed in the continental United States by registered or
certified mail, or personally delivered to the party entitled thereto, at the
address stated below or to such changed address as the addressee may have given
by a similar notice:
To the Company: Community Resource Mortgage, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy to: Community Bankshares, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy to: Xxxxxx X. Xxxx, Esq.
Haynsworth Xxxxxxx Xxxx, P.A.
0000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
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To the Employee: A. Xxxx Xxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
14. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amount would still
be payable to him hereunder if he had continued to live, all such amounts,
except to the extent otherwise provided under this Agreement, shall be paid in
accordance with the terms of this Agreement to his devisee or other designee, or
if there be no such devisee or designee, to the Employee's estate.
15. Modification, Waiver or Discharge. No provision of this Agreement
maybe modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the executive and an authorized
officer of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement; provided,
however, that this Agreement shall not supersede or in any way limit the right,
duties or obligations that the Employee or the Company may have under any other
written agreement between such parties, under any employee pension benefit plan
or employee welfare benefit plan as defined under the Employee Retirement Income
Security Act of 1974, as amended, and maintained by the Company, or under any
established personnel practice or policy applicable to the Employee.
16. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
South Carolina without regard to the laws of such state governing conflicts of
laws.
17. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not effect the validity or enforceability of any other
provision of this Agreement, which latter shall remain in full force and effect.
18. Miscellaneous.
(a) No Right of Set-Off, Etc. There shall be no right of
set-off or counterclaim, in respect of any claim, debt or obligation
against any payments to the Employee, his beneficiaries or estates
provided for in this Agreement.
(b) No Adequate Remedy At Law. The Company and the Employee
recognize that each party will have no adequate remedy at law for
breach by the other of any of the agreements contained herein and, in
the event of any such breach, the Company and the Employee hereby agree
and consent that the other shall be entitled to decree of specific
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performance, mandamus, or other appropriate remedy to enforce
performance of such agreements.
(c) Non-Assignability. No right, benefit, or interest
hereunder shall be subject to anticipation, alienation, sale,
assignment, encumbrance, charge, pledge, hypothecation, or setoff in
respect of any claim, debt or obligation, or to execution, attachment,
levy or similar process, or assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted
by law, be null, void and of no effect. Any of the foregoing to the
contrary notwithstanding, this provision shall not preclude the
Employee from designating one or more beneficiaries to receive any
amount that may be payable after his death, and shall not preclude the
legal representative of the Employee's estate from assigning any right
hereunder to the person or persons entitled thereto under his will or,
in the case of intestacy applicable to his estate.
(d) Enforcement of Agreement; Attorneys' Fees. In the event
litigation or arbitration is commenced by the Employee against the
Company in seeking to obtain or enforce any right, benefit or payment
under this Agreement or to enforce any obligation of the Company
described herein, then, provided the Employee shall prevail in such
litigation or arbitration, the Company shall be obligated to pay all
reasonable expenses(including without limitation all reasonable
attorneys' fees and court costs) paid or incurred by the Employee in
connection with such litigation.
(e) Arbitration. Any controversy or claim arising out of or
relating to this Agreement shall be settled by binding arbitration
pursuant to the Federal Arbitration Act or the South Carolina Uniform
Arbitration Act, as applicable, under the applicable rules of the
American Arbitration Association and judgment on any award rendered by
the arbitrator(s) may be entered in any court having jurisdiction
thereof; provided that either party may seek injunctive relief to
enforce provisions of this Agreement without initiating an arbitration
proceeding. The location of any arbitration shall be Orangeburg, South
Carolina. Any civil action seeking injunctive relief, challenging an
arbitration proceeding or award or otherwise related to this Agreement
will be instituted and maintained in the federal or state courts for
Orangeburg County, South Carolina and the parties hereby consent to the
personal jurisdiction of said courts.
(f) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the Employee and the Company (by action of its duly
authorized officer) have executed this Agreement on the date first above
written.
COMMUNITY RESOURCE MORTGAGE, INC.
By:----------------------------------------------
Its:------------------------------------
---------------------------------------------
XXXX XXXXXXX
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