EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”), made as of the 31st day of January, 2008, by and between
First
National Bank of the South
(“Employer”), having its principal office at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxx Xxxxxxxx 00000, and Xxxxx
X. Xxxxxx
(“Employee”).
Employer
wishes to employ Employee as its Executive Vice-President for Special Projects.
Employer recognizes that Employee’s potential contributions to the growth and
success of Employer may be substantial. Employer desires to provide for the
continued employment of Employee and to make certain changes in Employee’s
employment arrangements which Employer has determined will reinforce and
encourage the continued dedication of Employee to Employer and will promote
the
best interest of Employer and its shareholders. Employee is willing to continue
to serve Employer on the terms and conditions herein provided.
In
consideration of the foregoing, the mutual covenants contained herein, and
other
good and valuable consideration, the receipt and sufficiency of which are
hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1. Employment.
Employer
hereby employs Employee and Employee accepts employment on the terms and
conditions hereafter set forth.
2. Term.
The term
of employment under this Employment Agreement shall be one year, and shall
commence as of February 1, 2008, and shall continue until February 1, 2009,
unless earlier terminated as hereinafter provided in Section 16. Unless
otherwise agreed in writing by Employer and Employee, on February 1, 2009,
Employer shall employ Employee as a consultant pursuant to and on the terms
and
conditions set forth in the Consulting Agreement attached hereto as Exhibit
A.
3. Duties.
Employee
shall serve as an Executive Vice-President for Special Projects of Employer
and
in such capacity shall perform such duties as are consistent with that position
as may be agreed to by Employer and Employee from time to time. Employee
shall
report directly to the chief executive officer of Employer. Such duties shall
be
performed at Employer’s offices as agreed upon by Employer and Employee.
Employer reserves the right from time to time to change the title and duties
of
Employee with Employee’s consent.
4. Extent
of Services.
Employee
shall devote sufficient time, attention and energies to the business of Employer
to carry out his assigned duties and shall make reasonable efforts to perform
such duties as may be reasonable assigned to Employee.
Unless
approved by Employer, Employee shall not, during the term of this Agreement,
be
engaged in any other business activity whether or not such business activity
is
pursued for gain, profit or pecuniary advantage and whether or not such activity
is carried on outside normal working hours, but this prohibition shall not
be
construed as preventing Employee from investing his assets in such form or
manner as will not require any services on the part of Employee in the operation
of the affairs of the companies in which investments are made. Employee hereby
confirms that he is under no contractual commitments inconsistent with his
obligations set forth in this Agreement, and that, during the term of this
Agreement, he will not render or perform services, or enter into any contract
to
do so, for any of the corporation, firm, entity or person which are inconsistent
with the provisions of this Agreement.
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5. Base
Salary. For
all
services rendered by Employee under this Agreement, Employer shall pay Employee
a base salary of $200,000.00 per year, payable in accordance with the salary
payment practices of Employer.
6. Benefits.
(a)
Employee shall be entitled, to the extent that Employee’s position, title,
tenure, salary, age, performance, and other qualifications make him eligible,
to
participate in all employee benefit plans or programs of Employer currently
in
existence on the date hereof including but not limited to any executive
management incentive plans and Employer’s 401(k) plan. Employee’s participation
in any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto, provided, however, that Employee shall be
treated as though his service with Carolina National Bank and Trust Company
were
service with Employer. Employee shall not participate in any Employer sponsored
health insurance plan but Employer shall pay Employee the amount of any premiums
that Employee must pay to Bank of America for health insurance.
(b)
Employer shall provide Employee with a $1,500.00 monthly automobile
allowance.
(c)
Employer shall pay the annual dues and assessments for Employee’s membership at
a golf club and a dining club of the Employee’s choice for as long as this
Agreement remains in force.
7. Working
Facilities.
Employee
shall be furnished with an office and such other facilities, equipment and
services as may be necessary or suitable to his position and adequate for
the
performance of his duties.
8. Expenses.
Employee
is authorized to incur reasonable expenses for promoting the business of
Employer, including expenses for entertainment, travel and similar items,
but
only if at least 50% of such expenses are allowable deductions to Employer
on
its Federal income tax return. Employer shall promptly reimburse Employee
for
all such expenses upon the presentation by Employee, from time to time, of
an
itemized account of such expenditures.
9. Vacations.
Employee
shall be entitled each fiscal year to 20 paid days off, which number of days
is
granted by Employer to employees of similar tenure and compensation rank,
pursuant to Employer’s paid days off policy. Employer reserves the right to
modify this and any other personnel policy from time to time.
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10. Stock
Options or Grants.
Employee
shall have the opportunity to participate in Employer’s long-term equity
incentive program and be eligible for the grant of stock options, restricted
stock, and other awards thereunder or under any similar plan adopted by
Employer. Awards under this plan are in the discretion of the board of directors
and shall be made pursuant to a separate agreement.
11. Ownership
of Work Product.
(a)
Employee shall diligently disclose to Employer as soon as it is created or
conceived by Employee, and Employer shall own, all Work Product (as defined
below). To the extent permitted by law, all Work Product shall be considered
work made for hire by Employee and owned by Employer.
(b)
If any of the work Product may not, by operation of law, be considered work
made
for hire by Employee for Employer (or if ownership of all right, title and
interest of the intellectual property rights therein shall not otherwise
vest
exclusively in Employer), Employee agrees to assign, and upon creation thereof
automatically assigns, without further consideration, the ownership of all
Work
Product to Employer, its successors and assigns.
(c)
Employer, and its successors and assigns, shall have the right to obtain
and
hold in its or their own name copyrights, registrations, and any other
protection available in the foregoing.
(d)
Employee agrees to perform upon the reasonable request of Employer, during
or
after Employee’s employment, such further acts as may be necessary or desirable
to transfer, perfect and defend Employer’s ownership of the Work Product. When
requested, Employee will
(i)
Execute, acknowledge and deliver any requested affidavits and documents of
assignment and conveyance;
(ii)
Obtain and aid in the enforcement of copyrights (and, if applicable, patents)
with respect to the Work Product in any countries.
(iii)
Provide testimony in connection with any proceeding affecting the right,
title
or interest of Employer in any Work Product; and
(iv)
Perform any other acts deemed necessary or desirable to carry out the purposes
of this Agreement.
Employer
shall reimburse all reasonable out-of-pocket expenses incurred by Employee
at
Employer’s request in connection with the foregoing.
(e)
For purposes hereof, “Work Product” shall mean all intellectual property rights,
including all Trade Secrets, U.S. and international copyrights, patentable
inventions, discoveries and improvements, and other intellectual property
rights, in any programming, documentation, technology or other work product
that
relates to the business and interest of Employer and that Employee conceives,
develops, or delivers to Employer at any time during the term of Employee’s
employment. “Work Product” shall also include all intellectual property rights
in any programming, documentation, technology or other work product that
is now
contained in any of the products or systems (including development and support
systems) of Employer prior to the date of this Agreement while Employee was
engaged as an independent contractor or employee of Employer. Employee hereby
irrevocably relinquishes for the benefit of Employer and its assigns any
moral
rights in the Work Product recognized by applicable law.
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12. Protection
of Trade Secrets and Confidential Information.
(a)
Through exercise of his rights and performance of his obligations under this
Agreement, Employee will be exposed to “Trade Secrets” and “Confidential
Information” (as those terms are defined below). “Trade Secrets” shall mean
information or data of or about Employer or any affiliated entity, including,
but not limited to, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product plans, or lists of actual or potential
customers, clients, distributors, or licensees, that: (i) derive economic
value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (ii) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy. To the extent
that
the foregoing definition is inconsistent with the definition of “trade secret”
mandated under applicable law, the latter definition shall govern for purposes
of interpreting Employee’s obligations under this Agreement. Except as required
to perform his obligations under this Agreement, or except with Employer’s prior
written permission, Employee shall not use, redistribute, market, publish,
disclose or divulge to any other person or entity any Trade Secrets of Employer.
Employee’s obligations under this provision shall remain in force (during and
after the term) for so long as such information or data shall continue to
constitute a Trade Secret under applicable law. Employee agrees to cooperate
with any and all confidentiality requirements of Employer, and Employee shall
immediately notify Employer of any unauthorized disclosure or use of any
Trade
Secrets which Employee becomes aware.
(b)
Employee will abide by Employer’s policies and regulations, as established from
time to time, for the protection of its Confidential Information. Employee
acknowledges that all records, files, data, documents, and the like relating
to
suppliers, customers, costs, prices, systems, methods, personnel, technology
and
other materials relating to Employer or its affiliated entities shall be
and
remain the sole property of Employer and/or such affiliated entity. Employee
agrees, upon the request of Employer, and in any event upon termination o
his
employment, to turn over all copies of all media, records, documentation,
etc.,
pertaining to Employer (together with a written statement certifying as to
his
compliance with the foregoing.)
13. Non-Solicitation
of Customers.
During
the term of his employment with Employer, and for a period of one year
thereafter, Employee shall not directly or indirectly solicit any individual
or
entity which was a customer or client of Employer for the purpose of providing
a
service or product to such customer or client which is the same type of service
or product offered or provided by Employer, provided, however, that this
restriction shall apply only to those customers or clients with whom Employee
had contact in connection with services or products provided by Employer
within
two years prior to the date of termination of such employment.
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14. Non-Solicitation
of Employees.
During
the term of Employee’s employment with Employer, and for a period of one year
thereafter, Employee shall not, directly or indirectly, induce or solicit
for
employment any employee of Employer for the purpose of providing services
that
are the same or similar to the types of services offered or engaged in by
Employer at the time of termination of Employee’s employment with Employer.
15. Non-Competition
Agreement.
During
Employee’s employment with Employer and for a period of one year thereafter,
Employee shall not (without the prior written consent of Employer which shall
not be withheld unreasonably) compete with Employer or any of its subsidiaries,
directly or indirectly, by serving as a director, officer of, employee or
agent,
or consultant to, or acquiring or maintaining more than a 5% passive investment
in, a depository financial institution or holding company therefor if such
depository institution or holding company has one or more offices or branches
located within 20 miles of any office or branch of Employer in existence
at the
time Employee’s employment with Employer is terminated (the “Territory”).
Notwithstanding the foregoing, Employee may serve as an officer of or consultant
to a depository institution or holding company therefor even though such
institution operates one or more offices or branches in the Territory, if
Employee’s employment does not directly involve, in whole or in part, the
depository financial institution’s or holding company’s operations in the
Territory.
16. Termination.
(a)
Death
or Total Disability.
Employee’s employment hereunder shall terminate upon Employee’s death. Employer
may, in accordance with applicable state and federal laws and regulations,
terminate Employee’s employment hereunder in the event of Employee’s total
disability for which no reasonable accommodation is available. For purposes
of
this subsection 16(a), “total disability” means the inability of Employee to
perform substantially all of his current duties as required hereunder for
a
continuous period of 180 days because of mental or physical condition, illness
or injury, and “reasonable accommodation” means an accommodation that does not
cause an undue hardship on the Employer.
(b)
Termination
Without Cause.
Either
party may terminate this Agreement without Cause upon 30 days’ written notice to
the other party. If Employer terminates this Agreement without cause, Employee
will receive a severance payment in the amount of $200,000 plus the annualized
cost of benefits provided under Section 6 hereof less all amounts previously
paid pursuant to Sections 5 and 6 hereof. Such severance payment shall be
paid
on the date of termination.
(c)
Termination
With Cause.
Employer may terminate this Agreement for Cause upon delivery of a Notice
of
Termination to the Employee. The Termination of Employee’s employment shall be
for “Cause” if it is:
(i)
the result of the commission or omission of an act by Employee of a willful
or
negligent nature which causes harm to Employer;
(ii)
the conviction of Employee for the commission or perpetration by Employee
of any
felony or any act of fraud;
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(iii)
the failure of Employee to devote adequate time and attention to the business,
as provided in Section 4;
(iv)
or the failure of Employee to perform his duties hereunder.
With
respect to (iii) and (iv) above, Employer shall provide written notice to
Employee of Employee’s failure to devote his full time and attention to the
business or to perform his duties hereunder, and provide Employee 30 days
to
cure such failure (if it can be cured) prior to terminating with cause.
17. Governing
Law.
This
Agreement has been entered into in the State of South Carolina and shall
be
governed by the laws of such State.
18. Remedies
for Breach.
Employee
recognizes and agrees that a breach by Employee of any covenant contained
in
this Agreement would cause immeasurable and irreparable harm to Employer.
In the
event of a beach or threatened breach of any covenant contained herein, Employer
shall be entitled to temporary and permanent injunctive relief, restraining
Employee from violating or threatening to violate any covenant contained
herein,
as well as all costs and fees incurred by Employer, including attorneys’ fees,
as a result of Employee’s breach or threatened breach of the covenant. Employer
and Employee agree that the relief described herein is in addition to such
other
and further relief as may be available to Employer at equity or by law. Nothing
herein shall be construed as prohibiting Employer from pursuing any other
remedies available to it for such breach of threatened breach, including
the
recovery of damages from Employee.
19. Consideration.
Employee
acknowledges and agrees that valid consideration has been given to Employee
by
Employer in return for the promises of Employee set forth herein.
20. Covenants
are Independent.
The
covenants on the part of Employee contained herein shall each be construed
as
agreements independent of each other and of any other provisions in this
Agreement and the unenforceability of one shall not effect the remaining
covenants.
21. Severability
and Substitution of Valid Provisions.
To the
extent that any provision or language of this Agreement is deemed unenforceable,
by virtue of the scope of the business activity prohibited or the length
of time
the activity is prohibited, Employer and Employee agree that this Agreement
shall be enforced to the fullest extent permissible under the laws and public
policies of the State of South Carolina.
22. Reasonable
Restraint.
It is
agreed by the parties that the foregoing covenants in this agreement are
necessary for the legitimate business interests of Employer and impose a
reasonable restraining on Employee in light of the activities and business
of
Employer on the date of the execution of this Agreement.
23. Withholding
of Taxes.
Employer
may withhold from any amounts payable to Employee under this Agreement all
federal, state, city or other taxes and withholdings as shall be required
pursuant to any applicable law, rule or regulation.
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24. Notices.
Any
notice required or permitted to be given under this Agreement shall be
sufficient if given in writing and sent by registered or certified mail to
his
residence in the case of Employee or to is principal office in the case of
Employer.
25. Assignment.
The
rights and obligations of the parties to this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of Employer.
This Agreement shall not be terminated by any merger or consolidation whether
or
not Employer is the consolidated or surviving corporation or by transfer
of all
or substantially all of the assets of Employer to another corporation if
there
is a surviving or resulting corporation in such transfer.
26. Severability.
It is
not the intent of any party hereto to violate any public policy of any
jurisdiction in which this Agreement may be enforced. If any provision of
this
Agreement or the application of any provision hereof to any person or
circumstances is held invalid, unenforceable or otherwise unlawful, the
remainder of this Agreement and the application of such provision shall be
reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal.
27. Entire
Agreement; Amendment.
This
Agreement supersedes any other agreements, oral or written, between the parties
with respect to the subject matter hereof, and contains all of the agreements
and understandings between the parties with respect to the employment of
Employee by Employer; provided, however, nothing in this Agreement shall
negate
or reduce Employee’s rights under the Amended and Restated Employment Agreement
by and among Carolina National Corporation, Carolina National Bank and Trust
Company, and Employee dated as of January 1, 2008, or constitute Employee’s
consent to the existence of any of the conditions set forth in Section 6.a.(iv)
of that agreement. Any waiver or modification of any term of this Agreement
shall be effective only if it is set forth in writing signed by all parties
hereto; provided, however, that Employee’s compensation may be increased at any
time by Employer without in any way affecting any of the other terms and
conditions of this Agreement, which in all other respects shall remain in
full
force and effect.
28. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same Agreement.
[SIGNATURE
PAGE FOLLOWS]
[REMAINDER
OF PAGE LEFT BLANK]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written on this 31st day of January, 2008
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EMPLOYER:
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FIRST
NATIONAL BANK OF THE SOUTH
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By:
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/s/
Xxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxxx
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Title:
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President
and Chief Executive Officer
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[CORPORATE
SEAL]
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Attest:
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_____________________________________
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Secretary
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EMPLOYEE:
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XXXXX
X. XXXXXX
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/s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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8
Exhibit
A
CONSULTING
AGREEMENT
THIS
CONSULTING AGREEMENT (“Agreement”)
is made as of February 1, 2009, between FIRST
NATIONAL BANK OF THE SOUTH,
a
national banking association (hereinafter referred to as “Bank”), and
XXXXX
X. XXXXXX (hereinafter
referred to as “Consultant”).
WHEREAS,
Bank has
acquired Carolina National Bank and Trust Company (“CNB”); and
WHEREAS,
Consultant has knowledge of the business of CNB and has been chief executive
officer of CNB; and
WHEREAS,
Bank has
employed Consultant as an Executive Vice President to assist with the
integration of CNB and Bank and with other projects of Bank; and
WHEREAS,
Bank
desires to retain Consultant to provide consulting services to Bank, and
Consultant has agreed to provide such consulting services to Bank, all
as
further provided herein.
NOW
THEREFORE,
in
consideration of the premises and mutual promises herein contained and
other
good and valuable consideration, the receipt, adequacy and sufficiency
of which
are hereby acknowledged, the parties agree as follows:
1. Contract
By Bank.
Bank
hereby contracts with Consultant as an independent contractor to provide
Services (as defined in Section 2 hereof), upon the terms and conditions
set
forth in this Agreement.
2. Scope
of Services.
During
the term of this Agreement, Consultant shall provide the services reasonably
necessary to accomplish special projects agreed to by Consultant and the
chief
executive officer of the Bank (the “Services”).
3. Consultant
Is An Independent Contractor.
In the
performance of the work, duties and obligations set forth in this Agreement,
it
is mutually understood and agreed that Consultant is at all times acting
and
performing as an independent contractor and not as an agent of Bank. Nothing
in
this Agreement shall be construed to create the relationship of employer
and
employee, master and servant, or principal and agent, between Bank and
Consultant. This Agreement shall not be construed to be a partnership or
joint
venture. No employees or agents of either party shall be deemed to be employees
or agents of the other party for any reason whatsoever. Bank shall neither
have
nor exercise any control or direction of the methods by which the Consultant
shall perform Services. The sole interest and responsibility of Bank are
that
the Services covered by this Agreement shall be performed and rendered
in a
competent, efficient and satisfactory manner.
4. Term
of Service.
Consultant's services hereunder shall terminate upon the expiration of
the term
of this Agreement July 31, 2009, or of any extension hereof as agreed to
in
writing by the parties.
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5. Compensation.
Bank
shall pay Consultant the sum of $100,000.00 for the Services through July
31,
2009 (the “Compensation”). The Compensation shall be paid to Consultant in a
lump sum on February 1, 2009 but, in the event that Consultant shall cease
to
perform the Services before the expiration of the term of this Agreement,
Consultant shall reimburse Bank a pro rata portion of the Compensation
for the
days remaining on the term of this Agreement.
6. Consultant's
Expenses.
Bank
will reimburse Consultant for normal and reasonable travel expenses, consisting
of transportation, meals and lodging expenses while traveling on Bank's
behalf,
at net cost. Consultant shall be reimbursed upon presentation to the Bank
an
itemized expense report with receipts attached.
7. Trade
Secrets.
Consultant agrees that he will not, during or after the term of this Agreement
with the Bank, disclose (i) the specific terms of the Bank’s relationships or
agreements with their respective significant vendors or customers; (ii)
any of
the Bank’s software, source code, object code, programs, related materials in
any media now existing or hereafter discovered, designs, work product,
inventions, improvements and discoveries developed in connection with this
Agreement or otherwise, including all patents, copyrights and intellectual
property rights; and (iii) any other significant and material trade secret
of
the Bank, whether in existence or proposed, to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever.
8. Non-Competition
Agreement.
Consultant acknowledges that, during the term of this Agreement, he will
continue to be bound by the non-competition provisions of his employment
agreement with Bank dated as of January 31, 2008.
9. Notices.
All
notices, requests, demands and other communications shall be in writing
and
shall be delivered by hand or mailed by overnight courier registered or
certified mail, return receipt requested, first class postage prepaid,
or sent
by facsimile confirmed by a copy sent by the sender registered or certified
mail, first class postage prepaid, in each case, addressed as
follows:
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If
to Consultant:
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Xxxxx
X. Xxxxxx
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Xxxxxxxx,
Xxxxx Xxxxxxxx 00000
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Fax:
____________________________
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If
to Bank:
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First
National Bank of the South
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000
Xxxxx Xxxx Xxxxxx
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Xxxxxxxx,
Xxxxx Xxxxxxxx
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Attn:
Xxxxx X. Xxxxxxx
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Fax:
____________________________
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If
delivered personally, the date on which a notice, request, instruction
or
document is delivered shall be the date on which such delivery is made,
and in
the case of facsimile, when the facsimile or the confirmed copy is received,
whichever is earlier. In the event any such notice is sent via overnight
courier, then such notice shall be deemed delivered or received on the
day after
the delivery of such notice to the courier service. In the event any such
notice, request, instruction or document is mailed to a party in accordance
with
this Section 9, then such notice, request, instruction or document shall
be
deemed to have been delivered, or received on the third (3rd)
day
following the deposit of such notice, request, instruction, or document
in the
United States mail.
Either
party hereto may change its address specified for notices herein by designating
a new address by notice in accordance with this Section 9.
10. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties
hereto
and their respective heirs, legal representatives, executors, administrators,
successors and assigns. This Agreement is personal and nature and cannot
be
assigned by the Consultant.
11. Headings.
The
section and other headings in this Agreement are inserted solely as a matter
of
convenience and for reference, and are not a part of this
Agreement.
12. Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties hereto and
supersedes and cancels any prior agreements, representations, warranties,
or
communications, whether oral or written, among the parties hereto relating
to
the transactions contemplated hereby or the specific subject matter herein.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an agreement in writing signed
by
the party against whom or which the enforcement of such change, waiver,
discharge or termination is sought.
13. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of South Carolina.
[SIGNATURE
PAGE FOLLOWS]
[REMAINDER
OF PAGE LEFT BLANK]
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IN
WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the
day and year first written above.
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CONSULTANT:
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/s/
Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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FIRST
NATIONAL BANK OF THE SOUTH:
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BY:
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/s/
Xxxxx X. Xxxxxxx
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NAME:
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Xxxxx
X. Xxxxxxx
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TITLE:
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President
and Chief Executive Officer
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