EXHIBIT 10
NONCOMPETITION, SEVERANCE AND EMPLOYMENT AGREEMENT
This Noncompetition, Severance and Employment Agreement (this
"Agreement") is made and entered into as of this 13th day of September, 2004 by
and between C. Xxxx Xxxxxx an individual (the "Executive"), and Peoples
Bancorporation, a South Carolina corporation and financial institution holding
company headquartered in Easley, South Carolina (the "company"). As used herein,
the term "Company" shall include the Company and any and all of its subsidiaries
where the context so applies.
W I T N E S S E T H
WHEREAS the Board of Directors believes that the Executive has been
instrumental in the success of the Company since his employment in 2004;
WHEREAS the company desires to continue to employ the Executive as
Subsidiary President of the Company and in such other capacities as the
Executive is currently employed as of the date hereof;
WHEREAS the Executive is willing to accept the employment contemplated
herein under the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Subject to the terms and conditions hereof, the Company
hereby employs the Executive and Executive hereby accepts such employment as a
Subsidiary President of the Company having such duties and responsibilities as
set forth in Section 3 below.
2. Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below.
"Change in Control" shall mean:
(i) the acquisition, directly or indirectly, by any Person
within any twelve month period of securities of the Company
representing an aggregate of 20% or more of the combined voting power
of the Company's then outstanding securities; or
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(ii) 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
of each new director was approved in advance by a vote of at least a
majority of the directors then still in office who were directors at
the beginning of the period; or
(iii) consummation of (A) a merger, consolidation or other
business combination of the Company with any other Person or affiliate
thereof, other than a merger, consolidation or business combination
which would result in the outstanding common stock of the Company
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into common stock of the surviving
entity or a parent or affiliate thereof) at least 67% of the
outstanding common stock (on a fully diluted basis) of the Company or
such surviving entity or parent or affiliate thereof outstanding
immediately after such merger, consolidation or business combination,
or (B) a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all
of the Company's assets; or
(iv) the occurrence of any other event or circumstance which
is not covered by (i) through (iii) above which the Board determines
affects control of the Company and, in order to implement the purposes
of this Agreement as set forth above, adopts a resolution that such
event or circumstance constitutes a change in Control for the purposes
of this Agreement.
"Cause" shall mean (i) fraud, gross negligence, dereliction of duties,
intentional material damage to the property or business of the Company, or the
commission of a felony; or (ii) the ineligibility of the Executive to perform
his duties because of a ruling, directive or other action by any agency of the
United States or any state of the United States having regulatory authority over
the Corporation.
"Confidential Information" shall mean all business and other
information relating to the business of the Company, including without
limitation, technical or nontechnical data, programs, methods, techniques,
processes, financial data, financial plans, product plans, and lists of actual
or potential customers, which (i) derives economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by proper
means by, other Persons, and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or confidentiality. Such
information and compilations of information shall be contractually subject to
protection under this Agreement whether or not such information constitutes a
trade secret and is separately protectable at law or in equity as a trade
secret. Confidential information does not include confidential business
information which does not constitute a trade secret under applicable law two
years after any expiration or termination of this Agreement.
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"Disability" or "Disabled" shall mean the Executive's inability as a
result of physical or mental incapacity to substantially perform his duties for
the Company on a fulltime basis for a period of six (6) months.
"Involuntary Termination" shall mean the termination of Executive's
employment by the Executive following a Change in Control which, in the sole
judgment of the Executive, is due to (i) a change of the Executive's
responsibilities, position (including status as Subsidiary President of the
Company, its successor or ultimate parent entity, office, title, reporting
relationships or working conditions), authority or duties (including changes
resulting from the assignment to the Executive of any duties inconsistent with
his positions, duties or responsibilities as in effect immediately prior to the
Change in Control); or (ii) a change in the terms or status (including the
rolling three year termination date) of this Agreement; or (iii) a reduction in
the Executive's compensation or benefits; or (iv) a forced relocation of the
Executive outside the Oconee, Pickens, Anderson, and Greenville County areas; or
(v) a significant increase in the Executive's travel requirements.
"Person" shall mean any individual, corporation, bank, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or other entity.
"Voluntary Termination" shall mean the termination by Executive of
Executive's employment following a Change in Control which is not the result of
any of clauses (i) through (v) set forth in the definition of Involuntary
Termination above.
3. Duties. During the term hereof, the Executive shall have such duties
and authority as are typical of a Subsidiary President of a company such as the
one being contracted with, and employee will, so long as he is an employee of,
he will devote his full time, attention and energies to the diligent performance
of his duties. Executive shall not, without the written consent of the Company,
at any time during the Term hereof (i) accept employment with, or render
services of a business, professional or commercial nature to, any Person other
than the Company, (ii) engage in any venture or activity which the Company may
in good faith consider to be competitive with or adverse to the business of the
Company or of any affiliate of the Company, whether alone, as a partner, or as
an officer, director, employee or shareholder or otherwise, except that the
ownership of not more than 5% of the stock or other equity interest of any
publicly traded corporation or other entity shall not be deemed a violation of
this Section, or (iii) the Company may in good faith consider to interfere with
Executive's performance of his duties hereunder.
4. Term. Unless earlier terminated as provided herein, the Executive's
employment hereunder shall be for a rolling term of three years (the "Term")
commencing on the date hereof, with compensation to be effective as of September
13, 2004.
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This Agreement shall be deemed to extend each day for an additional day
automatically and without any action on behalf of either party hereto; provided,
however, that either party may, by notice to the other, cause this Agreement to
cease to extend automatically and, upon such notice, the "Term" of this
Agreement shall be the three years following the date of such notice, and this
Agreement shall terminate upon the expiration of such Term. If no such notice is
given and this Agreement is terminated pursuant to Section 5 hereof, for the
purposes of calculating any amounts payable to the Executive as a result of such
termination, the remaining Term of this Agreement shall be deemed to be three
years from the date of such termination.
5. Termination. This Agreement may be terminated as follows:
5.1 The Company. The Company shall have the right to terminate
Executive's employment hereunder at any time during the Term hereof (i) for
Cause, (ii) if the Executive becomes Disabled, (iii) upon the Executive's death.
5.1.1 If the Company terminated Executive's employment under
this Agreement pursuant to clauses (i) through (iii) of Section 5.1, the
Company's obligations hereunder shall cease as of the date of termination;
provided, however, if Executive is terminated for Cause after a change in
Control, then such termination shall be treated as a Voluntary Termination as
contemplated in Section 5.2 below.
5.1.2 If the Company terminates Executive other than pursuant
to clauses (i) through (iii) of Section 5.1 and there has been a Change in
Control, Executive shall be entitled to receive immediately as severance upon
such termination, the compensation and benefits provided in Section 6 hereof
that would otherwise be payable over the three years subsequent to such
termination. For purposes of determining compensation which is not fixed (such
as bonus), the annual amount of such unfixed compensation shall be deemed to be
the equal to the average of such compensation over the three year period
immediately prior to the termination.
5.1.3 If the Company terminates Executive other than pursuant
to clauses (i) through (iii) of Section 5.1 and in the absence of a Change in
Control, Executive shall be entitled to receive immediately as severance upon
such termination, the compensation and benefits provided in Section 6 hereof for
the remaining Term of this Agreement.
5.1.4 In the event of such termination other than pursuant to
clauses (i) through (iii) of Section 5.1, (A) all rights of Executive pursuant
to awards of share grants or options granted by the Company shall be deemed to
have vested and shall be released from all conditions and restrictions, except
for restrictions on transfer pursuant to the Securities Act of 1933, as amended,
and (B) the Executive shall be deemed to be credited with service with the
Company for such remaining Term for the purposes of the Company's benefit plans.
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5.2 By Executive. Executive shall have the right to terminate his
employment hereunder if (i) the Company materially breaches this Agreement and
such breach is not cured within 30 days after written notice of such breach is
given by Executive to the Company; (ii) there is a Voluntary Termination; or
(iii) there is an Involuntary Termination.
5.2.1 If Executive terminates his employment other than
pursuant to clauses (i) through (iii) of Section 5.2, the Company's obligations
under this Agreement shall cease as of the date of such termination and
Executive shall be subject to the noncompetition provisions set forth in Section
9 hereof.
5.2.2 If Executive terminates his employment hereunder
pursuant to any clauses (i) or (iii) of Section 5.2, Executive shall be entitled
to receive immediately as severance the compensation and benefits provided in
Section 6 hereof that would otherwise be payable over the three years subsequent
to such termination. For purposes of determining compensation which is not fixed
(such as a bonus), the annual amount of such unfixed compensation over the three
year period immediately prior to the termination.
5.2.3 If Executive terminates his employment pursuant to
clause (ii) of Section 5.2, Executive shall be entitled to receive immediately
as severance the compensation and benefits provided in Sections 6 hereof for one
year following the date of his Voluntary Termination. For purposes of
determining compensation which is not fixed (such as a bonus), the annual amount
of such unfixed compensation shall be deemed to be equal to the average of such
compensation over the three year period immediately prior to the termination.
5.2.4 In addition, in the event of such termination pursuant
to any of clauses (i) through (iii) of this Section 5.2, (A) all rights of
Executive pursuant to awards of share grants or options granted by the Company
shall be deemed to have vested and shall be released from all conditions and
restrictions, except for restrictions on transfer pursuant to the Securities Act
of 1933, as amended, and (B) the Executive shall be deemed to be credited with
service with the Company for such remaining Term for the purposes of the
Company's benefit plans.
6. Compensation. In consideration of Executive's services and covenants
hereunder, Company shall pay to Executive the compensation and benefits
described below (which compensation shall be paid in accordance with the normal
compensation practices of the Company and shall be subject to such deductions
and withholdings as are required by law or policies of the Company in effect
from time to time, provided that his salary pursuant to Section 6.1 shall be
payable not less frequently than monthly);
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6.1 Annual Salary. During the Term hereof, the Company shall pay to
Executive a salary at the rate of $135,000.00 per annum. Executive's salary will
be reviewed by the Board of Directors of the Company at the beginning of each of
its fiscal years and, in the sole discretion of the Board of Directors, may be
increased for such year. Salary continuation and/or life insurance plans in
existence at the time of the change in control will also be kept in force for
the benefit of the executive and/or his heirs for life.
6.2 Annual Incentive Bonus. During the Term hereof, the Board of
Directors may pay to Executive an annual incentive cash bonus in accordance with
the terms of the Short Term Incentive Compensation Plan.
6.3 Other Benefits. Executive shall be entitled to share in any other
executive officer/employee benefits generally provided by the Company to its
most highly ranking executives (including but not limited to the following;
major medical and dental insurance, short and long term disability insurance,
bonus plans, etc.) for so long as the Company provides such benefits. The
Company also agrees to provide Executive with a Company-paid, full-sized
automobile, reasonable club dues for one area country club of their choice and
two business clubs. Executive shall also be entitled to participate in all other
benefits accorded general Company executive officers and/or employees.
7. Excess Parachute Payments. It is the intention of the parties hereto
that the severance payments and other compensation provided for herein are
reasonable compensation for Executive's services to the Company and shall not
constitute "excess parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended, and any regulations thereunder. In
the event that the Company on the date of a Change of Control determine that the
payments provided for herein constitute "excess parachute payments", then the
compensation payable hereunder shall be reduced to the point that such
compensation shall not qualify as "excess parachute payments".
8. Confidentiality. Executive acknowledges that, prior to and during
the term of this Agreement, the Company has furnished and will furnish to
Executive Confidential Information which could be used by Executive on behalf of
a competitor of the Company to the Company's substantial detriment. In view of
the foregoing, Executive acknowledges and agrees that the restrictive covenants
contained in this Section are reasonably necessary to protect the Company's
legitimate business interests and goodwill. Executive agrees that he shall
protect the Company's Confidential Information and shall not disclose to any
person, or otherwise use, except in connection with his duties performed in
accordance with this Agreement, any Confidential Information provided, however,
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that Executive may make disclosures required by a valid order or subpoena issued
by a court or administrative agency of competent jurisdiction, in which event
Executive will promptly notify the Company of such order or subpoena to provide
the Company an opportunity to protect its interests. Upon the termination or
expiration of this employment hereunder, the Executive agrees to deliver
promptly to the Company all Company files, customer lists, management reports,
memoranda, research, Company forms, financial data and reports and other
documents supplied to or created by him in connection with his employment
hereunder (including all copies of the foregoing) in his possession or control
and all of the Company's equipment and other materials in his possession or
control.
9. Noncompetition. In the event that Executive's employment with the
Company is terminated before a Change in Control voluntarily by the Executive or
by the Board of Directors pursuant to clause (i) of Section 5.1, then Executive
shall not, for a period of one year following such termination of employment (i)
become employed by any insured depository institution which conducts business
activities in Oconee County; (ii) attempt to interfere with any business
relationship of the Company, including without limitation, employee and customer
relationships; or (iii) or otherwise compete against the Company, directly or
indirectly, either as principal, agent, employee, owner (if the percentage of
ownership exceeds 10% of the entity). In the event that Executive's employment
is terminated for any reason following a Change in Control (whether by the
Company or Executive), it is expressly acknowledged that there shall be no
limitation on any activity of Executive, including direct competition with the
Company or its successor, and Company shall not be entitled to injunctive relief
with respect to any such activities of Executive.
10. Assignment. The parties acknowledge that this Agreement has been
entered into due to, among other things, the special skills of Executive, and
agree that this Agreement may not be assigned or transferred by Executive, in
whole or in part, without the prior written consent of Company.
11. Notices. All notices, requests, demands, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or seven days after mailing if mailed, first class,
certified mail postage prepaid:
To the Company: Peoples Bancorporation
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chairman of the Board
To Executive: C. Xxxx Xxxxxx
000 Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
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Any party may change the address to which notices, requests, demands, and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
12. Provisions Severable. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or convenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
13. Remedies. The Executive acknowledges that if he breaches or
threatens to breach his covenants and agreements in this Agreement, such actions
may cause irreparable harm and damage to the Company which could not be
compensated in damages. Accordingly, if Executive breaches or threatens to
breach this Agreement, the Company shall be entitled to injunctive relief, in
addition to any other rights or remedies of the Company. In the event that
Executive is reasonably required to engage legal counsel to enforce his rights
hereunder against the Company, Executive shall be entitled to receive from the
Company his reasonable attorney's fees and costs; provided that Executive shall
not be entitled to receive those fees and costs related to matters, if any,
which were the subject of litigation and with respect to which a judgment is
rendered against Executive.
14. Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
15. Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by other parties hereto.
16. Governing Law. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of South Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
[SIGNATURES OMITTED]
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