EXHIBIT 10.7
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into effective as of the 19th day of December, 2001 by and
between First Charter Corporation ("First Charter"), a North Carolina
corporation with its principal place of business in Charlotte, North Carolina,
and C. Xxxxxx XxXxxxxxx ("Executive"), an individual residing in Mecklenburg
County, North Carolina. (the Executive and First Charter may be referred to
hereinafter as the "Parties").
WITNESSETH:
WHEREAS, Executive is currently employed as a Group Executive Vice
President and of First Charter and is highly knowledgeable about the business
and operations of First Charter's subsidiaries and other affiliated
organizations and the respective markets and customers that they serve;
WHEREAS, Executive is a valued executive of First Charter and its
wholly owned subsidiary, First Charter Bank (the "Bank"), and, in order to
induce Executive to continue employment with First Charter and to enhance
Executive's job security, First Charter desires to enter into this Agreement
that will provide compensation to Executive in certain events, including but
not limited to Executive's termination of employment following a change in
control of First Charter, as hereinafter provided;
WHEREAS, because Executive has become familiar with and will continue
to gain extensive knowledge regarding First Charter and Bank products,
relationships, trade secrets and confidential information relating to First
Charter, the Bank and their respective customers' business, products, processes
and developments and has generated and will continue to generate confidential
information in the course of his duties, First Charter wishes to protect its
long-term interests by having Executive enter into certain non-disclosure and
non-competition covenants set forth in this Agreement; and
WHEREAS, First Charter desires to continue to employ Executive, and
Executive desires to continue to be employed by First Charter, subject to the
terms and conditions set forth in this Agreement, which the Parties agree shall
hereby supersede and replace Executive's prior December 15, 1999 Employment
Agreement with First Charter.
NOW, THEREFORE, in consideration of the terms contained herein,
including the compensation First Charter agrees to pay to Executive upon
certain events, Executive's continued employment with First Charter,
Executive's covenants and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, First Charter and Executive
agree as follows:
1. EMPLOYMENT AND DUTIES.
A. During the Employment Term (as defined in Section 3
below), First Charter hereby employs Executive, and Executive hereby
agrees to serve, as a Group Executive Vice President of First Charter.
As such, Executive shall have responsibilities, duties and authority
reasonably accorded to, expected of, and consistent with Executive's
position as a Group Executive Vice President of First Charter and will
report directly to the President and Chief Executive Officer of First
Charter. Executive shall also perform the duties and exercise the
powers and functions that from time to time may be assigned or vested
in him by the Board of Directors of First Charter (the "Board") and/or
the Board of Directors of First Charter's subsidiaries in relation to:
(i) First Charter; and/or (ii) any subsidiary or affiliated company of
First Charter, including general responsibility for the management and
operations of the Bank. Executive hereby accepts this employment upon
the terms and conditions herein contained and, subject to Section
1(c), agrees to devote substantially all of his business time,
attention and best efforts to promote and further the business of
First Charter and the Bank.
B. Executive shall faithfully adhere to, execute and
fulfill all lawful requests, instructions and policies made by the
Board or its authorized agent(s).
C. Except as specifically authorized in advance by the
Board, Executive shall not, during the Employment Term (as defined in
Section 3 below), be engaged as an employee or otherwise in any other
business or commercial activity pursued for gain, profit or other
pecuniary advantage. The foregoing limitations also shall not be
construed as prohibiting Executive from making personal investments in
such form or manner as will neither require his services in the
operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 3 hereof,
provided, however, that during the Employment Term (as defined in
Section 3 below), Executive may not beneficially own the stock or
options to acquire stock totaling more than 5% of the outstanding
shares of any corporation or entity, or otherwise acquire or agree to
acquire a significant present or future equity or other proprietorship
interest, whether as a stockholder, partner, proprietor, or otherwise,
with any enterprise, business or division thereof, that is engaged in
Competitive Activity (as defined in Section 8 below) with First
Charter and/or the Bank.
2. COMPENSATION. For all services rendered by Executive during
the Employment Term (as defined in Section 3 below), First Charter shall
compensate Executive as follows:
A. BASE SALARY. During the Employment Term (as defined
in Section 3 below), First Charter will pay Executive a semi-monthly
base salary as compensation for Executive's services hereunder of
$7,650.00, equivalent to $183,600.00 per year (the "Base Salary"),
payable on a regular basis in accordance with First Charter's standard
payroll procedures but not less than monthly, less applicable
deductions required by law. On at least an annual basis thereafter
during the Employment Term (as defined in Section 3 below), the Board
will review Executive's performance and, based upon the
recommendations of the Compensation Committee, may increase such Base
Salary if, in its discretion, such adjustment is warranted, with any
such adjustment to be effective beginning January 1 of the next
following year.
B. BONUS. In addition to the Base Salary set forth
above, during the Employment Term (as set forth in Section 3 below)
and as long as Executive remains actively employed by First Charter,
Executive may receive an annual bonus from one or more arrangements
including but not limited to the Annual Incentive Plan, as such may be
in effect from time to time (collectively, the "Bonus"), the amount of
which shall be determined in the sole discretion of the Board. In
making its determination of the amount of the Bonus, if any, to be
paid, the Board may take into account, among other things: (i)
Executive's qualifications and experience; (ii) the duties and
responsibilities of Executive; (iii) the services performed and the
contributions of Executive to the success of First Charter and/or the
Bank; (iv) compensation patterns in similar businesses for similar
executives; (v) First Charter's financial resources to pay the bonus;
and (vi) such other factors as the Board shall deem to be relevant.
C. EXECUTIVE PERQUISITES, BENEFITS AND OTHER
COMPENSATION. During the Employment Term (as defined in Section 3
below), Executive shall be entitled to receive additional benefits and
compensation from First Charter in such form and to such extent as
specified below:
I. Payment of all or a portion of premiums for
coverage for Executive and his dependent family members under
health, hospitalization, disability, dental, life and other
insurance plans that First Charter may have in effect from
time to time. Benefits provided to Executive under this
Section 2(c)(ii) will require Executive to pay the same
proportion of premiums for, and shall provide benefits at
least equal to, the benefits then provided to First Charter's
other executive employees.
II. Reimbursement for all business travel and
other out-of-pocket expenses reasonably incurred by Executive
in the performance of his services pursuant to this
Agreement. All reimbursable expenses shall be appropriately
documented in reasonable detail by Executive upon submission
of any request for reimbursement, and in a format and manner
consistent with First Charter's expense reporting policy.
III. First Charter shall provide Executive with
other employee perquisites as may be available to or deemed
appropriate for Executive by the Board and participation in
all other company-wide employee benefits, including but not
limited to, any qualified and/or nonqualified retirements
plans sponsored by First Charter, as such are available from
time to time. Such current additional perquisites are listed
on Schedule A, which is attached hereto and incorporated
herein, and may be amended from time to time in the
discretion of the Board. In addition, Schedule B, which is
attached hereto and incorporated herein, lists those other
supplemental benefits in which Executive is currently
entitled to participate, and may be amended or modified from
time to time with the consent of the Parties.
3. TERM OF AGREEMENT. The Parties intend that the term of this
agreement provide the Executive with a three year contract that will expire
when the Executive attains age 65, unless the Agreement is terminated sooner as
provided in Section 4. Therefore, upon execution of this Agreement by
Executive, the initial term of Executive's employment under this Agreement
shall be deemed to have commenced on December 19, 2001 and shall continue until
December 31, 2004 unless sooner terminated as provided in Section 4. In
addition, on the last day of each calendar month after December 31, 2001 until
January 31, 2019, this Agreement shall be deemed to have been automatically
renewed and extended for an additional one (1) month on the same terms and
conditions contained herein in effect as of the time of renewal, unless either
party shall give written notice of nonextention to the other party at least
fifteen (15) days before the last day of a month. Following January 31, 2022,
this Agreement may be renewed and extended on terms and conditions mutually
agreed upon by the Parties. In addition, Executive's total term of employment
with First Charter during the initial and any extended term is collectively
defined and referred to under this Agreement as the "Employment Term."
4. TERMINATION. In addition to the provisions set forth in
Section 3 above, the Employment Term shall terminate immediately upon the
occurrence of any of the following events: (a) immediately upon the retirement
or death of Executive; (b) upon the end of the time period specified in the
First Charter Corporation Omnibus Stock Option Plan following the Disability of
Executive (as defined below); (c) upon the effective date of Resignation by
Executive Without Good Reason (as defined below); (d) upon the effective date
of Resignation by Executive For Good Reason (as defined below); (e) upon the
60th day following the date the Board gives Executive notice of Termination
Without Cause (as defined below); or (f) upon the close of business on the date
the Board gives Executive notice of Termination for Cause (as defined below).
A. RETIREMENT. "Retirement by Executive" shall mean any
voluntary retirement by Executive with the consent of the Board.
B. DISABILITY. "Disability" shall mean the inability of
the Executive to engage in his profession by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which is to last or can be expected to last for a
continuous period of not less than twelve months, as determined by the
Board in its sole discretion upon certification thereof by qualified
physicians selected by the Board after such physician examines the
Executive.
C. RESIGNATION WITHOUT GOOD REASON. "Resignation
Without Good Reason" shall mean any voluntary termination or
resignation by Executive for any reason other than the retirement or
death of Executive, "Disability" or "Resignation for Good Reason".
Executive is required to give at least 60 days advance written notice
of Resignation Without Good Reason to the Board, and First Charter is
entitled upon receiving such notice, in its discretion, to accept such
resignation as effective on: (i) the resignation date proposed by
Executive, or (ii) such other
earlier date designated by First Charter. In addition, First Charter
will be required to pay Executive his regular salary and benefits only
through Executive's final resignation date as agreed to or revised by
the Board, regardless of whether Executive is actually permitted to
perform any services for First Charter during that period.
D. RESIGNATION FOR GOOD REASON. "Resignation For Good
Reason" shall mean any voluntary termination or resignation by
Executive for: (i) a material reduction in Executive's position,
duties, responsibilities or status, or a change in Executive's title
resulting in a material reduction in his responsibilities or position
with First Charter, in either case without Executive's consent, but
excluding for this purpose any isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied promptly by First
Charter after receiving notice from Executive and further excluding
any such reductions or changes made in good faith to conform with
generally accepted industry standards for Executive's position; (ii) a
reduction in the rate of Executive's Base Salary or a decrease in any
Bonus to which Executive was entitled pursuant to the First Charter
Corporation Annual Incentive Plan or incentive plans at the end of the
most recently concluded fiscal year, in either case without
Executive's consent; provided, however, that a decrease in Executive's
Bonus amount shall not constitute "Good Reason" and nothing herein
shall be construed to guarantee such bonus awards if performance,
either by First Charter or Executive, is below such targets as may
reasonably and in good faith be set forth in the First Charter
Corporation Annual Incentive Plan or other incentive arrangements; or
(iii) the relocation of Executive, without his consent, to a location
outside a fifty (50) mile radius of Charlotte, North Carolina.
Executive is required to give at least fifteen (15) days
advance written notice of Resignation For Good Reason to the Board,
and First Charter is entitled upon receiving such notice, in its
discretion, to accept such resignation as effective on the resignation
date proposed by Executive, or such other earlier date designated by
the Board.
E. TERMINATION WITHOUT CAUSE. "Termination Without
Cause" shall mean any termination of the employment of Executive by
First Charter for any reason other than termination due to the
retirement or death of Executive, "Disability" or "Termination for
Cause".
F. TERMINATION FOR CAUSE. "Termination for Cause" shall
mean termination of the employment of Executive by First Charter as
the result of Executive's: (i) willful misconduct of a material nature
in connection with the performance of his duties as an employee; (ii)
use of alcohol during working hours beyond that customarily authorized
in the performance of Executive's job duties, repeated use of alcohol
after working hours that materially interferes with Executive's duties
under this Agreement, use of illegal drugs, or violation of First
Charter's drug and/or alcohol policies; (iii) conviction, guilty plea
or plea of nolo contendere for any crime involving moral turpitude or
for any felony; (iv) embezzlement or theft from First Charter, the
Bank or any of their respective customers and employees; (v) gross
inattention to or dereliction of duty; (vi) commission or omission of
any act of fraud or dishonesty in connection with Executive's
employment with First Charter or the Bank; (vii) breach of any
fiduciary duty to First Charter or the Bank, including the duty of
loyalty; (viii) breach of the obligations set forth in Sections 7-9 of
this Agreement; (ix) breach, threatened breach or failure to perform
any other provision of this Agreement; or (x) performance of any other
willful act(s) which Executive knew or reasonably should have known
would be materially detrimental to First Charter or the Bank.
5. RIGHTS UPON TERMINATION. Following the termination of the
Employment Term for any reason, (i) Executive shall be entitled to any earned
but unpaid Base Salary, if any, due at the time of termination of the
Employment Term (ii) Executive shall have the general right to elect certain
coverage continuation under COBRA, and (iii) Executive will not forfeit any
vested stock options or vested 401(k) or pension benefits with First Charter
and the Bank, if any. Thereafter, except for any benefits or payments which may
be due as set forth in Section 5(a), 5(b), 5(d), 5(e) and Section 6(a), 6(b),
6(c) and 6(d) below, Executive shall not be entitled to receive any additional
compensation, wages, bonuses, incentive pay,
commissions, severance pay, consideration and/or benefits of any kind from
First Charter and/or the Bank hereunder upon the termination of the Employment
Term.
A. DEATH. If termination of the Employment Term occurs
at any time due to the death of Executive, then Executive's personal
representative shall be paid all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such
amounts to be paid in the same manner as provided in Section 2. In
addition, all supplemental benefits, awards, grants and options under
any First Charter or Bank supplemental agreement, stock option or
grant will be fully vested notwithstanding any other provision in such
plan or grant.
B. DISABILITY. If termination of the Employment Term
occurs at any time due to the Disability of Executive, then Executive
shall be entitled to receive all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such
amounts to be paid in the same manner as provided in Section 2, less
any amounts which Executive receives from First Charter's long-term
disability plan. In addition, all supplemental benefits, awards,
grants and options under any First Charter or Bank supplemental
agreement, stock option or grant will be fully vested notwithstanding
any other provision in such plan or grant.
C. TERMINATION "FOR CAUSE" OR RESIGNATION "WITHOUT GOOD
REASON". If termination of the Employment Term occurs at any time due
to termination by First Charter "For Cause" or due to resignation by
Executive "Without Good Reason", then Executive shall be entitled only
to receive all earned but unpaid Base Salary, unreimbursed expenses
and/or accrued, vested stock options and vested 401(k) or pension
benefits through the effective date of the Termination "For Cause" or
Resignation "Without Good Reason".
D. TERMINATION "WITHOUT CAUSE" OR RESIGNATION "FOR GOOD
REASON". If termination of the Employment Term occurs at any time due
to termination by First Charter "Without Cause" or due to resignation
by Executive "For Good Reason", then Executive shall be entitled to
(i) all accrued, unpaid Base Salary and unreimbursed expenses through
the date of such termination; (ii) any prior year annual incentive
bonus earned but not yet paid; (iii) continued payment of Executive's
Base Salary for the greater of the remainder of the Employment Term or
two (2) years; (iii) an annual Bonus amount (calculated as the average
of the three most recent Bonuses) for the greater of the remainder of
the Employment Term or two (2) years; (iv) continuation of health and
welfare benefit coverage (including coverage for Executive's
dependents to the extent such coverage is provided by First Charter
for its employees generally) under such plans and programs to which an
Executive was entitled to participate immediately prior to the date of
the end of his employment for the greater of the remainder of the
Employment Term or two (2) years, provided such continued
participation is possible under the terms and provisions of such plans
and programs; and (v) acceleration of vesting of all supplemental
benefits, including but not limited to all awards, grants, and options
under any First Charter or Bank supplemental agreement, stock option
plan or grant notwithstanding any other provision in such plan or
grant.
E. RETIREMENT WITH THE CONSENT OF FIRST CHARTER. If
Executive retires with the consent of First Charter, then Executive
shall be entitled to receive all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such
amounts to be paid in the same manner as provided in Section 2. In
addition, all awards, grants and options under any First Charter or
Bank stock option or grant will be fully vested notwithstanding any
other provision in such plan or grant.
F. DEDUCTIONS. All payments set forth in this Section 5
to Executive and/or his personal representative, if any, shall be made
subject to applicable withholdings as required by law.
6. TERMINATION FOLLOWING A CHANGE IN CONTROL.
A. The Parties agree that if, during the Employment
Term, a Change in Control (as defined in Section 6.a.ii. hereof)
occurs and if, within one (1) year following the Change in Control,
the employment of Executive is terminated by First Charter Without
Cause (as defined in Section 4.e. hereof), Executive's Compensation
(as defined in Section 6.a.iii. below) shall continue to be paid in
monthly installments, subject to applicable withholdings, by First
Charter for a period of thirty-five (35) months following such
termination of employment. Furthermore, if, within one (1) year
following the Change in Control, the employment of Executive is
terminated by Executive for Good Reason, Executive's Compensation (as
defined in Section 6(a)(iii) below) shall continue to be paid in
monthly installments, subject to applicable withholdings, by First
Charter for the greater of the remainder of the Employment Term or two
(2) years.
In lieu of receiving payment of Compensation (as defined in
Section 6(a)(iii)) in installments for the such period, Executive may
elect, at any time prior to the earlier to occur of (i) a Change in
Control, or (ii) an action by the Board with respect to an event which
would, upon consummation, result in a Change in Control (which
election shall be evidenced by notice filed with First Charter), to be
paid the present value of any such Compensation in a lump sum within
thirty (30) days of termination of Executive's employment under
circumstances entitling such Executive to Compensation hereunder. The
calculation of the amount due shall be made by the independent
accounting firm then performing First Charter's independent audit, and
such calculation, including but not limited to any discount factor
used to determine present value, shall be conclusive.
(I) GOOD REASON. For purposes of this Section
6, termination by Executive for "Good Reason" shall mean
those reasons set forth as "Good Reason" in Section 4(d) of
this Agreement, except that the change in Executive's
position, duties, responsibilities, status, title, Base
Salary or Bonus shall be measured for such matters as they
were in effect immediately preceding the Change in Control.
(II) CHANGE IN CONTROL. For purposes of this
Section 6, Change in Control" shall mean (A) the consummation
of a merger, consolidation, share exchange or similar
transaction of First Charter with any other corporation as a
result of which the holders of the voting capital stock of
First Charter as a group would receive less than 50% of the
voting capital stock of the surviving or resulting
corporation; (B) the sale or transfer (other than as security
for obligations of First Charter) of substantially all the
assets of First Charter; (C) in the absence of a prior
expression of approval by the Board, the acquisition of more
than 20% of First Charter's voting capital stock by any
person within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), other than a person, or group including a person, who
beneficially owned, as of the date of this Agreement, more
than 5% of First Charter's securities; (D) during any period
of two consecutive years, individuals who at the beginning of
such period constitute the Board cease for any reason to
constitute at least a majority thereof unless the election,
or the nomination for election by First Charter's
shareholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who
were directors at the beginning of the period; or (E) any
other change in control of First Charter of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange
Act or the acquisition of control, within the meaning of
Section 2(a)(2) of the Bank Holding Company Act of 1956, as
amended, or Section 602 of the Change in Bank Control Act of
1978, of First Charter by any person, company or other
entity.
(III) COMPENSATION. For purposes of this Section
6, Executive's Compensation shall consist of the following:
(A) Executive's Base Salary in effect immediately preceding
the Change in Control, plus (B) an annual bonus equal to the
average bonus (including, but not limited to, the "Bonus", as
that term is defined in Section 2(b) hereof and calculated as
a percentage of Base Salary, without regard to vesting
schedules or restrictions on the bonus compensation and
converting all post-employment payments in stock and stock
options to a cash present value) paid by First Charter for
each one-year performance period to Executive for the three
(3) most recent fiscal years ending prior to such Change in
Control pursuant to First Charter's incentive and bonus plans
or, if a relevant bonus program has not existed for three (3)
years preceding the Change of Control, an amount equal to the
estimated average bonus as calculated by the independent
accounting firm then performing First Charter's independent
audit, which calculation shall be conclusive.
B. Upon termination of Executive's employment entitling
Executive to Compensation set forth in Section 6(a) above, First
Charter shall maintain in full force and effect for the continued
benefit of Executive for such thirty-five month period health
insurance (including coverage for Executive's dependents to the extent
dependent coverage is provided by First Charter for its employees
generally) under such plans and programs in which Executive was
entitled to participate immediately prior to the date of such
termination of employment, provided that Executive's continued
participation is possible under the general terms and provisions of
such plans and programs. In the event that participation in any such
plan or program is barred, First Charter shall arrange to provide
Executive with health insurance benefits at First Charter's expense
for such thirty-five month period substantially similar to those which
Executive would otherwise have been entitled to receive under such
plans and programs from which his continued participation is barred.
However, in no event will Executive receive from First Charter the
health insurance contemplated by this Section 6(b) if Executive
receives comparable insurance from any other source.
In lieu of receiving the continued health insurance coverage
for the period described in the preceding paragraph, Executive may
elect, at any time prior to the earlier to occur of (i) a Change in
Control, or (ii) an action by the Board with respect to an event which
would, upon consummation, result in a Change in Control (which
election shall be evidenced by notice filed with First Charter), to be
paid the present value of any such continued health insurance coverage
in a lump sum within thirty (30) days of termination of Executive's
employment under circumstances entitling such Executive to
Compensation hereunder. The calculation of the amount due shall be
made by the independent accounting firm then performing First
Charter's independent audit, and such calculation, including but not
limited to any discount factor used to determine present value, shall
be conclusive.
C. Upon termination of Executive's employment entitling
Executive to Compensation as set forth in Section 6(a) above,
Executive will become immediately vested in his benefits under his
Supplemental Agreement (as such was effective December 19, 2001), and
in any and all stock options and shares of restricted stock previously
granted to him by First Charter notwithstanding any provision to the
contrary of any plan under which the options or restricted stock are
granted. Any accrued but ungranted stock options or restricted stock
shall also be fully vested upon grant to Executive. Executive may
exercise such options only at the times and in the method described in
such options. All restrictions on shares of First Charter's stock
granted under any plan shall lapse upon a Change of Control. First
Charter will amend such options or plans in any manner necessary to
facilitate the provisions of this Section 6(c).
D. It is the intention of First Charter and Executive
that Executive receive the full benefits available under this Section
6 in the event of a Change in Control. If a Change of Control occurs
and a determination is made by legislation, regulation, ruling
directed to Executive or First Charter, or court decision that the
aggregate amount of any payment made to Executive hereunder, or
pursuant to any plan, program or policy of First Charter in connection
with, on account of, or as a result of, such Change in Control
constitutes "excess parachute payments" as defined in Internal Revenue
Code (the "Code") section 280G (as well as any
successor or similar sections thereof), subject to the excise tax
provisions of Code section 4999 (as well as any successor or similar
sections thereof), Executive shall be entitled to receive from First
Charter, in addition to any other amounts payable hereunder, a lump
sum payment equal to 100% of such excise tax, plus an amount equal to
the federal and state income tax, FICA, and Medicare taxes (based upon
Executive's projected marginal income tax rates) on such lump sum
payment. The amounts under this Section 6(d) shall be paid to
Executive as soon as may be practicable after such final determination
is made. Executive and First Charter shall mutually and reasonably
determine whether or not such determination has occurred or whether
any appeal to such determination should be made.
E. Except as elected by Executive with the prior
consent of First Charter, all payments provided for under this Section
6 shall be paid in cash (including the cash values of stock options or
restricted stock, if any) from the general funds of First Charter, and
no special or separate fund shall be established, and no other
segregation of assets shall be made to assure payment, except as
provided to the contrary in funded benefits plans. Executive shall
have no right, title or interest whatsoever in or to any investments
that First Charter may make to aid First Charter in meeting its
obligations under this Section 6. Nothing contained herein, and no
action taken pursuant to the provisions hereof, shall create or be
construed to create a trust of any kind or a fiduciary relationship
between First Charter and Executive or any other person. To the extent
that any person acquires a right to receive payments from First
Charter hereunder, such right shall be no greater than the right of an
unsecured creditor of First Charter.
F. All payments set forth in this Section 6 to
Executive, if any, shall be made subject to applicable withholdings as
required by law.
7. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION.
A. Executive understands that his position with First
Charter is one of trust and confidence because of Executive's access
to trade secrets and confidential and proprietary business
information. Executive pledges his best efforts and utmost diligence
to protect and keep confidential the trade secrets and confidential or
proprietary business information of First Charter.
B. Unless required by First Charter in connection with
his employment or with First Charter's express written consent,
Executive agrees that he will not, either during his employment or
afterwards, directly or indirectly, use, misappropriate, disclose or
aid anyone else in disclosing to any third party for Executive's own
benefit or the benefit of another: (1) all or any part of any of First
Charter's or its subsidiaries' trade secrets or confidential or
proprietary information, whether or not the information is acquired,
learned, or developed by Executive alone or in conjunction with
others; or (2) the details of any contracts, business transactions or
negotiations to which First Charter or its subsidiaries are a party or
of any tenders, offer or proposals submitted to or to be submitted by
First Charter and/or its subsidiaries in connection with their
business. Executive makes the same pledge with regard to the
confidential information of First Charter's and its subsidiaries'
customers, contractors, or others with whom First Charter or its
subsidiaries have a business relationship.
C. Executive understands that trade secrets and
confidential or proprietary information, for purposes of this
Agreement, shall include, but not be limited to, any and all versions
of First Charter's or its subsidiaries' computer software, hardware,
and documentation; all methods, processes, techniques, practices,
product designs, pricing information, billing histories, customer
requirements, customer lists, account data, loan records, employee
lists and salary/commission information, personnel matters, financial
data, operating results, plans, contractual relationships, and
projections for business opportunities for new or developing business
of First Charter or its subsidiaries; and all other confidential or
proprietary information, patents, ideas, know-how and trade secrets
which are in the possession of First Charter or its subsidiaries, no
matter what the source, including any such information that First
Charter or its subsidiaries obtain from a customer, contractor or
another party or entity and that First Charter
treats or designates as confidential or proprietary information,
whether or not such information is owned or was developed by First
Charter.
D. Executive also agrees that all notes, records
(including all computer and electronic records), software, drawings,
handbooks, manuals, policies, contracts, memoranda, sales files,
customer lists, employee lists or other documents that are made or
compiled by Executive, or which were available to Executive while he
was employed at First Charter, in whatever form, including but not
limited to all such documents and data concerning any processes,
inventions, services or products used or developed by Executive during
his employment, shall be the property of First Charter. Executive
further agrees to deliver and make available all such documents and
data to First Charter, regardless of how stored or maintained and
including all originals, copies and compilations thereof, upon the
separation of his employment, for any reason, or at any other time at
First Charter's request.
E. Executive understands that First Charter expects him
to respect any trade secrets of confidential information of any of
Executive's former employers, business associates, or other business
relationships. Executive also agrees to respect First Charter's
express direction to Executive not to disclose to First Charter, its
officers, or any of its employees any such information so long as it
remains confidential.
8. COVENANT NOT TO COMPETE. For and in consideration of this
Agreement, the change in control protection contained herein and Executive's
continued employment with First Charter, Executive agrees that, unless
specifically authorized by First Charter in writing, Executive will not for a
period of two (2) years after his employment with First Charter has terminated
or ended (whatever the reason for the end of the employment relationship):
A. Engage in any "Competitive Activity" (as defined
below) within the "Restricted Territory" (as defined below);
B. Serve as an employee, director, owner, partner,
contractor, consultant or agent of, or own any interest in (except for
beneficially owning the stock or options to acquire stock totaling
less than 5% of the outstanding shares in a "public" competitor), any
person, firm or corporation that engages in "Competitive Activity"
within the "Restricted Territory"; or
C. Engage in any "Competitive Activity" with, for or
towards or divert, attempt to divert or direct others to divert any
business of First Charter from a then existing First Charter customer,
a joint venturer or other business partner of First Charter
(hereinafter referred to as an "affiliate"), or from a potential
customer identified through leads or relationships developed during
the last two (2) years of Executive's employment with First Charter,
within the "Restricted Territory".
Furthermore, Executive will not during his employment with First
Charter and for a period of three (3) years after his employment with First
Charter has terminated or ended (whatever the reason for the end of the
employment relationship) solicit or hire for employment or as an independent
contractor any employee of First Charter, the Bank or any of First Charter's
affiliates, or solicit, assist, induce, recruit, or assist or induce anyone
else to recruit, or cause another person in the employ of First Charter, the
Bank or any of First Charter's affiliates to leave his employment with First
Charter, the Bank or First Charter's affiliate for the purpose of joining,
associating, or becoming employed with any business or activity with which
Executive is or expects to be directly or indirectly associated or employed.
"Competitive Activity" means: (1) the business activities engaged in
by First Charter during Executive's employment with First Charter, including
the sales, marketing, distribution and provision of banking, financial and
insurance services or other products or services of the type of which Executive
was involved during his employment with First Charter; and/or (2) the
performance of any other business activities competitive with First Charter
and/or the Bank for or on behalf of any financial or insurance services entity.
"Restricted Territory" means: (1) the geographic area encompassing a
twenty-five (25) mile radius of Charlotte, North Carolina; and/or (2) any
Metropolitan Statistical Area (as defined by the United States Department of
Commerce) from which First Charter generated at least ten percent (10%) of its
gross annual revenue during the last two calendar years before the end of
Executive's employment with First Charter.
Executive further agrees that except with the express written consent
of the Board, Executive will not engage in any Competitive Activity
individually or with any entity or individual other than First Charter, the
Board or its subsidiaries during the Employment Term.
9. ACKNOWLEDGMENTS BY EXECUTIVE.
A. Executive acknowledges that the restrictions placed
upon him by Sections 7 and 8 of this Agreement are reasonable given
the nature of Executive's position with First Charter, the area in
which First Charter markets its products and services, and the
consideration provided by First Charter to Executive pursuant to this
Agreement. Specifically, Executive acknowledges that the length of the
Covenant Not to Disclose Confidential Information and Covenant Not to
Compete in Sections 7 and 8 are reasonable and that the definitions of
"Competitive Activity" and "Restricted Territory" are reasonable.
B. Executive acknowledges that all of the provisions of
the Agreement are fair and necessary to protect the interests of First
Charter. Accordingly, Executive agrees not to contest the validity or
enforceability of Sections 7 or 8 hereof.
C. Executive understands that every provision of this
Agreement is severable from each other provision of this Agreement.
Therefore, if any provision of this Agreement, including but not
limited to all provisions of Sections 7 and 8, is held invalid or
unenforceable, every other provision of this Agreement will continue
to be fully valid and enforceable. In the event that any provision of
this Agreement is determined by a court of competent jurisdiction to
be void or unenforceable, Executive and First Charter agree that such
provision shall be enforced to the extent reasonable under the
circumstances and that all other provisions shall be enforceable to
the fullest extent permissible by law. Executive and First Charter
further agree that, if any court makes such a determination, such
court shall have the power to reduce the duration, scope and/or area
of such provisions and/or delete specific words and phrases by "blue
penciling" and, in its reduced or blue penciled form, such provisions
shall then be enforceable as allowed by law.
D. Executive understands that his obligations under
Sections 7 and 8 of this Agreement will continue whether or not his
employment with First Charter is terminated voluntarily or
involuntarily, or with or without Cause or Good Reason.
10. BREACH BY EXECUTIVE. Executive agrees that in the event of
any breach or threatened breach of the provisions of Sections 7 and 8 hereof by
Executive, First Charter's remedies at law would be inadequate, and First
Charter shall be entitled to an injunction (without any bond or other security
being required), restraining such breach, and costs and attorneys' fees
relating to any such proceeding or any other legal action to enforce the
provisions of this Agreement, but nothing herein shall be construed to preclude
First Charter from pursuing any other remedies at law or in equity available to
it for any such breach or threatened breach. Moreover, Executive also agrees
that if Executive breaches any of Sections 8 or 9 above, Executive shall
forfeit at the time of the breach the right to any additional future payments
or benefits under this Agreement, except to the extent such benefits or
payments are vested and earned. In such case, Executive and First Charter agree
that the confidential information and non-compete obligations contained in this
Agreement shall remain valid and enforceable based upon the consideration
actually paid.
11. ASSIGNMENT AND BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, Executive and First Charter and the
Bank and their respective permitted successors and
assigns. Neither this Agreement nor any right or interest hereunder shall be
assignable by Executive, his beneficiaries, or legal representatives without
the First Charter's prior written consent. First Charter will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
share exchange or otherwise) to all or substantially all of the business and/or
assets of First Charter, by agreement in form and substance satisfactory to
Executive, to expressly assume and agree to perform all of First Charter's
obligations under this Agreement in the same manner and to the same extent that
First Charter would be required to perform it if no such succession had taken
place, and to perform all obligations to Executive as provided in Section 6.
Failure of First Charter to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from First Charter in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the date
Executive's employment was terminated. As used in this Agreement, "First
Charter" shall mean First Charter as defined herein and any successor to its
business and/or assets as aforesaid that executes and delivers the agreement
provided for in this Section 11 or that otherwise becomes bound by the all
terms and provisions of this Agreement by operation of law.
12. COMPLETE AGREEMENT. This Agreement replaces any previous
agreement relating to the same or similar subject matter which the Executive
and First Charter may have entered into with respect to Executive's employment
by First Charter, including specifically the Employment Agreement entered into
between Executive and First Charter dated December 15, 1999. Executive has no
oral representations, understandings or agreements with First Charter or any of
its officers, directors or representatives covering the same subject matter as
this Agreement. This written Agreement is the final, complete and exclusive
statement and expression of the Employment Agreement between First Charter and
Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral
or written agreements. This written Agreement may not be later modified except
by a further writing signed by a duly authorized officer of First Charter and
Executive, and no term of this Agreement may be waived except by writing signed
by the party waiving the benefit of such term.
13. NOTICE. Whenever any notice is required hereunder, it shall
be given in writing addressed as follows:
To First Charter: Xxxxx Xxxxxx Xxxxxxx
SVP, Human Resources
First Charter Bank
P. O. Xxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
To Executive: C. Xxxxxx XxXxxxxxx
00000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other
party of such change in accordance with this Section 13.
14. HEADINGS. The section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of the Agreement or of any part hereof.
15. GOVERNING LAW. This Agreement shall in all respects be
construed according to the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
FIRST CHARTER CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: President and Director
(Principal Executive Officer)
/s/ C. Xxxxxx XxXxxxxxx
-------------------------------------------
C. XXXXXX XXXXXXXXX
SCHEDULE A
- Business related travel and entertainment expenses
- Mobile telephone expenses
- Country club membership dues
- Civic club membership dues
- Expenses related to business use of company provided car
SCHEDULE B
- Medical Insurance
- Dental Insurance
- Short-term Disability with a seven (7) day elimination period, and a
benefit of at least 75% of base pay during illness for a maximum of
ninety (90) calendar days.
- Long-term Disability with a ninety (90) day elimination period and a
benefit of 60% of base salary, up to $5,000 per month, once approved
by the Long-term Disability carrier.
- Life Insurance equivalent to two times base pay, with a $500,000
maximum benefit.
- Accidental Death and Dismemberment Insurance equivalent to two times
base pay, with a $500,000 maximum benefit.
- First Charter Retirement 401(k) Plan
- Benefit Restoration Match for contributions limited under the First
Charter Retirement 401(k) Plan
- First Charter Money Purchase Pension Plan (merged into the First
Charter Retirement 401(k) Plan effective January 1, 2002)
- OPT Capital Plan
- Employee Stock Purchase Plan
- Vacation of four (4) weeks for Executive Vice President
- Supplemental Life Insurance policy
- Supplemental Disability Income policy
- Supplemental Agreement for Deferred Compensation
