EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit (e)(10)
Execution Copy
This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and among Crescent Financial Corporation (the “Company”), a North Carolina corporation, Crescent State Bank (the “Bank”), a North Carolina-chartered bank, and Xxxxx X. Xxxxx (the “Executive”) on this 23 day of February, 2011 to be effective as of the Effective Date (as defined herein).
Executive is currently employed by the Company and the Bank pursuant to the terms of that certain employment agreement dated September 10, 2008, by and among the Company, the Bank and the Executive, as amended December 31, 2010 and as modified January 1, 2009 (collectively, with such amendments and modifications, the “Existing Employment Agreement”).
The parties desire to enter into this Agreement to address exclusively the terms and conditions of the Executive’s continuing employment with the Company and Bank immediately following the closing of the transaction (the “Effective Date”) contemplated by that certain Investment Agreement (the “Investment Agreement”) among Piedmont Community Bank Holdings, Inc., the Company and the Bank (the “Transaction”).
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
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(f) Withholdings and, Deductions. All payments made under this Agreement by the Bank or, as applicable, the Company shall be subject to all required federal, state and local withholdings and such deductions as Executive may instruct the Bank to take that are authorized by applicable law.
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(a) If the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement shall terminate, as of the effective date of such order, except for the payment of Salary due and owing under subsection 3(a) on the effective date of said order, and reimbursement under subsection 3(e) of expenses incurred as of the effective date of termination. Additionally, as of the effective date of such order, the non-competition provisions contained in subsections 9(a), (b), and (c) of this Agreement shall cease to apply to the Executive.
(b) If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Bank under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank shall reinstate any of its obligations which were suspended to the extent permitted by applicable law. During the period under which the Bank’s obligations under this Agreement are suspended, the non-competition provisions contained in subsections 9(a), (b), and (c) shall cease to apply to the Executive; provided, however, that in the event the charges in the notice are dismissed and Executive remains employed by the Bank, such non-competition provisions in subsections 9(a), (b), and (c) shall be reinstated.
(c) If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but the vested rights of the parties shall not be affected.
(d) If the Federal Deposit Insurance Corporation (“FDIC”) is appointed receiver or conservator under Section 11(c) of the FDIA (12 U.S.C. 1821(c)) of the Bank or any depository institution controlled by the Bank, the Bank shall have the right to terminate all obligations of the Bank under this Agreement as of the date of such receivership or conservatorship, other than any rights of the Executive that vested prior to such appointment. To the extent the Bank is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
(e) If the FDIC provides open bank assistance under Section 13(c) of the FDIA (12 U.S.C. 1823(c)) to the Bank or any Affiliate, but excluding any such assistance provided to the industry generally, the Bank shall have the right to terminate all obligations of the Bank under this Agreement as of the date of such assistance, other than any rights of the Executive that vested prior to the FDIC action. To the extent the Bank is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
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(f) If the FDIC requires a transaction under Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Bank or any Affiliate, the Bank shall have the right to terminate all obligations of the Bank under this Agreement as of the date of such transaction, other than any rights of the Executive that vested prior to the transaction. To the extent the Bank is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
(g) All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.
(a) For purposes of this Agreement, “Works” shall mean intellectual property and proprietary rights, including without limitation, ideas, designs, concepts, techniques, inventions, discoveries and works of authorship, whether or not patentable or protectible by copyright or as a mask work, and whether or not reduced to practice, including, without limitation, devices, processes, trade secrets, formulas, techniques, compositions of matter, computer software programs, mask works and methods, together with any improvements thereon or thereto, derivative works made therefrom and know how related thereto.
(b) Executive hereby agrees that all Works made, conceived, developed or reduced to practice, in whole or in part, solely by Executive or jointly with others, either during or after his term of employment with the Bank, if such Works are (i) made through the use of any of the Confidential Information or any of Bank’s equipment, facilities, supplies or time, or (ii) result from any work performed by Executive for the Bank or its Affiliates, shall belong exclusively to the Bank and shall be deemed part of the Confidential Information for purposes of this Agreement whether or not fixed in a tangible medium of expression. Without limiting the foregoing, Executive agrees that all such Works shall be deemed to be “works made for hire” under the U.S. Copyright Act of 1976, as amended, and that the Bank shall be deemed the author and owner thereof, provided that in the event and to the extent such Works are determined not to constitute “works made for hire” as a matter of law, Executive hereby irrevocably assigns and transfers to the Bank the entire right, title and interest, domestic and foreign, of Executive in and to such Works. The Bank shall have the right to obtain and to hold in its own name, copyrights, registrations or such other protection as may be appropriate to the subject matter, and any extensions and renewals thereof. Executive agrees to give the Bank, and any person designated by the Bank, any assistance the Bank deems necessary or appropriate to perfect the rights defined in this Section 7.
(c) Executive will promptly disclose in writing (which may be by e-mail) to the Board, or its designee, every Work made, conceived, developed or reduced to practice, in whole or in part, solely by Executive or jointly with others, in connection with the business of the Bank either (i) during the Employment Period, whether or not Executive believes the Work to have been made, conceived, developed or reduced to practice within the course and scope of his employment, or (ii) after the termination of employment, if such Work is made through the use of Confidential Information or any of the Bank’s equipment, facilities, supplies or time, or results from any work performed by Executive for the Bank or its Affiliates.
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(d) Executive agrees to (i) keep and maintain adequate and current records (in the form of notes, drawings, software, object code, source code, manuals, plans, research, specifications, designs, documentation, data, processes, procedures, discoveries, models or in other appropriate forms) of all Works, which records shall be available at all times to the Bank and shall remain the sole property of the Bank; and (ii) assist the Bank, both during and subsequent to his employment with the Bank, in obtaining and enforcing for the Bank’s own benefit patents, copyrights, mask work rights, trade secret rights and other legal protections in any and all countries for any and all Works made by Executive (in whole or in part), the rights to which belong to or have been assigned to the Bank pursuant to this Agreement. Upon request, Executive will execute all applications, assignments, instruments and papers and perform all acts that the Bank or its counsel may deem necessary or desirable to obtain or enforce any and all such patents, copyrights, mask work rights, trade secret rights and other legal protections in such Works and otherwise to protect the interests of the Bank therein. The Bank agrees to bear all expenses which it causes to be incurred by Executive in assigning, obtaining, maintaining and enforcing said patents, copyrights, trade secret rights, mask work rights and other legal protections in accordance with this Agreement.
(e) Executive understands that utilization of the Works is in the sole discretion of the Bank, and that the Bank is not obligated to develop, market or otherwise use any device or product.
(a) Executive shall not at any time disclose or use for the benefit of others any information relative to the activities of the Bank which is of a secret or confidential nature, including without limitation financial information, contracts, contract proposals and negotiations, business plans, administration procedures and dealings with any customer or other business relationship of the Bank. Specifically, Executive acknowledges that his duties and responsibilities will put Executive in a position of acquiring and creating Confidential Information (as that term is defined below), including without limitation Works as defined in Section 7 of this Agreement, concerning the Bank, the disclosure of which to competitors of the Bank or others could cause the Bank to suffer substantial and irreparable damage. Executive acknowledges, therefore, that it is in the Bank’s legitimate business interest to restrict Executive’s disclosure or use of such Confidential Information (and other Bank Property) for any purpose other than the services provided by Executive to the Bank and to limit the possibility of any potential appropriation of such Confidential Information (and other Bank Property) by Executive for his own benefit or the benefit of the Bank’s competitors and to the detriment of the Bank.
(b) Executive hereby agrees and acknowledges that “Confidential Information” shall mean all non-public information, whether or not created or maintained in written or electronic form, which constitutes, relates or refers to any and all of the following: financial data; strategic business plans; acquisition plans; product development information (or other proprietary product data); marketing plans; processes; inventions; devices; Works; and all other non-public, proprietary or confidential information of, concerning or provided by or on behalf of the Bank and its Affiliates, or the Bank’s and its Affiliates’ clients, including without limitation, the terms and existence of this Agreement (provided, however, that Executive may disclose the terms and existence of this Agreement to his personal attorneys, immediate family, and/or accountants or in response to an inquiry of a governmental agency, court order or subpoena, or in order to enforce this Agreement). In addition, Executive may disclose his W-2 earnings, his job title, and the provisions of Section 9 to potential or future employers. All of the foregoing is merely illustrative and Confidential Information is not limited to those illustrations. Confidential Information shall not include information that is or becomes known or available to the public through no act or negligent omission by Executive.
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(c) Executive agrees and acknowledges that “Bank Property” shall mean all property and resources of the Bank, including without limitation, all Confidential Information, the Bank’s computer system and all software, e-mail and databases, telephone and facsimile services and all other administrative or support services provided by the Bank. All Bank Property and Confidential Information is owned and/or held by and for the Bank exclusively, is intended for authorized, job-related purposes on behalf of the Bank only and shall not be used for any non-job-related purposes, nor for any amount of personal use that is not de minimus. Further, without limitation, Executive shall not, directly or indirectly, except in the course of his duties hereunder (i) remove from the Bank’s premises, or divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity, any Confidential Information or non-public Bank Property, except as may be required by law, court order or subpoena and only after reasonable prior notice to the Bank where possible; or (ii) make use of any Confidential Information or Bank Property for any purpose outside the course of performing the authorized duties of his employment, including to benefit himself or any other person or entity.
(d) Executive understands that the Bank, from time to time, may enter into agreements with other parties which impose obligations or restrictions on the Bank regarding inventions or Works (as defined in subsection 7(a)) made during the course of the performance of such agreements or regarding the confidential nature of such performance, or otherwise receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Bank’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the Employment Period and thereafter, Executive agrees to be bound by all such obligations and restrictions of which Executive has notice, will hold Third Party Information in the strictest confidence, will not disclose (to anyone other than the Bank personnel who need to know such information in connection with their work for the Bank) or use, except in connection with his work for the Bank, Third Party Information unless expressly authorized by the Bank in writing, and will otherwise take all action necessary to discharge the obligations to the Bank arising in connection with such Third Party Information. Nothing in this Agreement prevents Executive from responding to a governmental inquiry, court order or subpoena, provided Executive gives the Bank reasonable advance notice, when possible.
a) during the Employment Period and the Restricted Period (as defined below), engage in Chatham, Johnston, Lee, Moore, New Hanover and Wake Counties, North Carolina (the “Territory”) in any activities which are competitive with any business conducted by the Bank or its Affiliates, except that nothing herein contained shall bar Executive from ownership of less than one percent (1%) of the number of outstanding shares of any securities listed for trading on any national exchange or automated quotation system of a competitive business;
(b) during the Employment Period and the Restricted Period, call upon, solicit, induce or encourage any customer with whom the Bank or any of its Affiliates transacted business in the one year period before Executive’s employment terminated to: (i) reduce or terminate its business relationship with the Bank or any Affiliate; or (ii) to enter into or become the subject of any direct or indirect contractual or business arrangement with another bank that has offices or conducts substantial business in the Territory; and
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(c) during the Employment Period and the Restricted Period, recruit, employ, hire or retain or attempt to recruit, employ, hire or retain, directly or by assisting others, any other employees of the Bank or its Affiliates, or contact or communicate with any other employees of the Bank or its Affiliates for the purpose of inducing, encouraging or assisting such other employees to terminate their employment with the Bank or its Affiliates. For purposes of this subsection 9(c), “other employees” shall refer to employees who are still actively employed by the Bank or its Affiliates at the time of the attempted contacting, communicating, recruiting, employing, hiring or retaining.
For purposes of this Section 9, the term “Restricted Period” means a period of twelve (12) months immediately following the Employment Period, unless the Executive is entitled to less than twelve (12) months of severance under this Agreement (including if the Executive is not entitled to any severance under this Agreement), in which event the term “Restricted Period” means a period of six (6) months or, if greater, the period during which the Executive is receiving severance under this Agreement.
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Notices to Executive, to:
Xxxxx X. Xxxxx
0000 Xxxxxxxx Xx.
Xxxx, Xxxxx Xxxxxxxx 00000
Notices to the Company or Bank, to:
Crescent Financial Corporation
c/o Piedmont Community Bank Holdings, Inc.
4350 Xxxxxxxx at Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Chief Executive Officer
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with a copy (which will not constitute notice to the Bank), to:
Xxxxxxx Xxxxxxxxx, Esq.
Xxx X. Xxxxxx, Esq.
Xxxxx Xxxx LLP
1290 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.
(g) Governing Law. Issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement will be governed by, and construed in accordance with, the laws of the State of North Carolina, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of North Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of North Carolina. In furtherance of the foregoing, the law of the State of North Carolina will control the interpretation and construction of this Agreement, even though under North Carolina’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
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(i) Submission to Jurisdiction. ANY AND ALL SUITS, LEGAL ACTIONS OR PROCEEDINGS ARISING OUT OF THIS AGREEMENT OR THE EMPLOYMENT RELATIONSHIP BETWEEN THE PARTIES WILL BE BROUGHT IN THE COURTS OF THE STATE OF NORTH CAROLINA OR THE UNITED STATES DISTRICT COURT WHICH HAVE JURISDICTION OVER THE COUNTY IN WHICH BANK HEADQUARTERS ARE LOCATED AT THE TIME ANY SUCH PROCEEDINGS ARE COMMENCED AND WHICH HAVE JURISDICTION OVER AN ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE EMPLOYMENT RELATIONSHIP BETWEEN EXECUTIVE AND THE BANK. EACH PARTY HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUITS, LEGAL ACTIONS OR PROCEEDINGS. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT ANY SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Executive Employment Agreement as of the dates written below.
CRESCENT FINANCIAL CORPORATION
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By:
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/s/ Xxxxxxx X. Xxxxxxx | |
Name: Xxxxxxx X. Xxxxxxx | |||
Title: President/CEO | |||
Dated: | 2/23/11 |
CRESCENT STATE BANK
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By:
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/s/ Xxxxxxx X. Xxxxxxx | |
Name: Xxxxxxx X. Xxxxxxx | |||
Title: President/CEO | |||
Dated: | 2/23/11 |
EXECUTIVE:
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/s/ Xxxxx X. Xxxxx | ||
Xxxxx X. Xxxxx | |||
Dated: | 2/23/11 |
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EXHIBIT A
Form of
RETENTION PAYMENT RELEASE AGREEMENT
This Retention Payment Release Agreement (this “Agreement”) is made this ___ day of _____, 201_, by and among Crescent Financial Corporation (the “Company”), a North Carolina corporation, Crescent State Bank (the “Bank”), a North Carolina-chartered bank (collectively, the Company and the Bank are the “Employer”) and ______________ (the “Executive”).
Executive and the Employer entered into that certain employment agreement dated __________________, 2011, (the “Employment Agreement”). Section 3(j) of the Employment Agreement provides the Executive with certain retention payments, subject to the condition that the Executive execute a release of claims against the Bank, the Bank’s affiliates, and the directors, employees, and agents of the Bank and its affiliates.
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Effective Date. Executive has been offered twenty-one (21) days from receipt of this Agreement within which to consider this Agreement. The effective date of this Agreement shall be the date eight (8) days after the date on which Executive signs this Agreement (the “Effective Date”). For a period of seven (7) days following Executive’s execution of this Agreement, Executive may revoke this Agreement, and this Agreement shall not become effective or enforceable until such seven (7) day period has expired. Executive must communicate the desire to revoke this Agreement in writing. Executive understands that Executive may sign the Agreement at any time before the expiration of the twenty-one (21) day review period. Executive’s signing of the Agreement triggers the commencement of the seven (7) day revocation period.
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2.
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Retention Payment; Consideration. In exchange for Executive’s execution of this Agreement and in full and complete settlement of any claims as specifically provided in this Agreement, the Employer will pay the Executive the [first / second] retention payment payable pursuant to Section 3(j) of the Employment Agreement as of ______________, 201_ (the “Retention Payment”).
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3.
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a.
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As a material inducement to the Employer to enter into this Agreement, Executive hereby irrevocably releases each entity constituting the Employer and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, agents and affiliates of each entity constituting the Employer (and directors, officers, employees, representatives, attorneys and agents of such affiliates) of each entity constituting the Employer and all persons acting by, through, under, or in concert with them (collectively, the “Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts, and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Employer’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Equal Pay Act; (6) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (7) Executive Order 11141 (age discrimination); (8) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (9) the Family and Medical Leave Act; (10) the Occupational Safety and Health Act; (11) the Xxxxxxxxx Fair Pay Act; (12) negligence; (13) negligent hiring and/or negligent retention; (14) intentional or negligent infliction of emotional distress or outrage; (15) defamation; (16) interference with contract and/or employment; (17) wrongful discharge; (18) invasion of privacy; or (19) violation of any other legal or contractual duty arising under the laws of the State of North Carolina or the laws of the United States, in each case, which Executive now has, or claims to have, or which Executive at any time heretofore had, or claimed to have, or which Executive at any time hereinafter may have, or claim to have, against each or any of the Releasees, in each case as to acts or omissions by each or any of the Releasees occurring up to and including the date of execution of this Agreement.
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b.
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The release in this Agreement shall not apply to any rights or benefits (such as base salary or reimbursement of expenses eligible for reimbursement) that the Executive is entitled to pursuant to the Employment Agreement, any other written agreement between the Employer and the Executive, and any compensation or benefit plan, program, or agreement of the Employer that is applicable to the Executive.
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c.
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By entering into this Agreement, Executive does not waive any rights or claims that may arise after the date this Agreement is executed.
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Non-Admission. This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Executive or any other person or that Executive has any rights whatsoever against the Employer. The Employer specifically disclaims any liability to or wrongful acts against Executive or any other person on the part of itself, its employees or its agents.
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Exhibit A - Page 2 of 4
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Lawsuits and Proceedings. Executive represents and warrants that Executive has not filed, nor assigned to others the right to file, nor are there currently pending, any complaints, charges, claims, grievances, or lawsuits against Employer with any administrative, state, federal, or governmental entity or agency or with any court. Executive agrees never to file or pursue a lawsuit or to participate as a class member in any lawsuit, based on any claim released by this Agreement. Executive understands that Executive may file a charge or participate in an investigation or proceeding conducted by an agency of the United States Government or of any state. Executive further agrees that Executive will not seek personal recovery as a result of any charge or litigation based on claims released herein and hereby waives any right to personal recovery for claims filed on Executive’s behalf.
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a.
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Executive acknowledges and understands that the restrictive covenants and nondisclosure provisions of the Employment Agreement, and all provisions related thereto, remain in full force and effect in accordance with the terms of the Employment Agreement.
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b.
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Executive acknowledges, understands, and agrees that Employer has made no representation as to the nature or extent of tax treatment of the Retention Payment.
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7.
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Agreement Binding; Governing Law; Severability. The Employer and Executive agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of North Carolina. The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.
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8.
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Entire Agreement. This Agreement sets forth the entire agreement between the Employer and Executive and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Executive pertaining to the subject matter of this Agreement.
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9.
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Executive’s Attorneys Fees. Executive is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this Agreement on behalf of Executive.
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This Agreement includes a release of all known and unknown claims through the date of this Agreement, except as otherwise provided herein. Executive should carefully consider all of its provisions before signing it. Executive’s signature below indicates Executive’s understanding and agreement with all of the terms in this Agreement.
Exhibit A - Page 3 of 4
EXECUTIVE:
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Date Signed
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THE EMPLOYER:
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CRESCENT FINANCIAL CORPORATION
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By: |
Print Name: |
Title: |
CRESCENT STATE BANK
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By: |
Print Name: |
Title: |
Exhibit A - Page 4 of 4