Exhibit 10.7
CONFIDENTIALITY/NON-DISCLOSURE AND
NON-SOLICITATION AGREEMENT
(Xxxxxx X. Xxxxx)
This Agreement is entered into as of this 21st day of December (the
"Effective Date") between CNB Corporation and Xxxxxx National Bank (collectively
the "Bank") and Xxxxxx X. Xxxxx ("Xxxxx").
1. In consideration of the following the promises and agreements
described in the following subparagraphs, the receipt and sufficiency of which
Xxxxx acknowledges, the parties agree to the terms set forth in this
Confidentiality/Non-Disclosure and Non-Solicitation Agreement ("Confidentiality
Agreement" or the "Agreement").
a. The consideration for this Confidentiality Agreement
includes the promises, covenants and cash payments by the Bank to Xxxxx, as
described in detail in the Settlement Agreement entered by and between the Bank
and Xxxxx, among others, of even date, the terms of which are hereby
incorporated by reference (the "Settlement Agreement");
b. Each party waives any and all rights to enforce any
non-solicitation, non-disclosure, or confidentiality covenants previously
executed by the parties including but not limited to (i) Paragraph 9.2 of the
Xxxxxxxxx and Xxxxx Employment Agreements; (ii) any Executive Supplemental
Income Agreement executed by CNB and/or the Bank with Xxxxx, Xxxxxxxxx or Xxxxx
(collectively, the "ESI Agreements"); and (iii) Paragraph 7.2 of the Phantom
Stock Agreement entered into between Xxxxxxxxx and the Bank dated December 1,
1999, (the "Xxxxxxxxx Phantom Stock Agreement"), and the Phantom Stock Agreement
entered into between Xxxxx and the Bank dated December 1, 1999,(the "Xxxxx
Phantom Stock Agreement").
2. Non-disclosure of Information.
a. The success of CNB Corporation and Xxxxxx National Bank in
the banking industry depends upon the relationship which each has developed with
its customers, sources of referral and business connections. The Bank is able to
compete effectively in the banking industry because it has developed and
maintains a body of confidential and proprietary information. Xxxxx acknowledges
that in and as a result of his employment by the Bank, he obtained access to and
used confidential information of a special and unique nature and value.
b. CNB Corporation and the Bank acknowledge that Xxxxx
possesses experience and knowledge which he has developed as a result of many
years working in the banking industry, and that Xxxxx is entitled to utilize his
experience and knowledge in earning a living in the banking profession,
including working for a bank that competes with Xxxxxx National Bank.
x. Xxxxx further acknowledges that in the course of his
employment, he has become privy to certain "trade secrets" as defined by the
South Carolina Trade Secrets Act, S.C. Code Xxx. ss. 39-8-10, et seq., that are
treated as confidential by CNB and the Xxxxxx National Bank (a "Trade Secret").
x. Xxxxx further acknowledges that in the course of his
employment, he has become privy to certain "confidential information,"
"proprietary information" and "private information" that would qualify for
protection under federal or state law and that are treated as confidential by
CNB and the Xxxxxx National Bank (together with Trade Secrets being referred to
as "Confidential Information").
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e. As a material inducement to the Bank to provide
consideration described above, Xxxxx covenants and agrees that, for a period
ending December 31, 2008, he shall maintain and not disclose all Confidential
Information and Trade Secrets which was maintained and treated as confidential
by the Bank. In the discharge of this obligation for the aforesaid term, Xxxxx
shall not disclose any such Confidential Information or Trade Secret described
above to anyone not employed by the Bank.
f. In addition, and without limitation, upon any remedy
provided herein, Xxxxx agrees that the Confidential Information is considered
"trade secrets" under the South Carolina Trade Secrets Act, and that the Company
is entitled to avail itself of any and all remedies provided for by that Act for
any misappropriation, or any threatened misappropriation, of such information.
x. Xxxxx acknowledges that he is subject to the
confidentiality requirements regarding non-public customer data which he
obtained during his employment under applicable state or federal law or
regulations applicable to the Bank, such as the Bank's Privacy Policy in effect
as of the Effective Date, and that nothing in this Confidentiality Agreement
abrogates, diminishes or enlarges those obligations.
3. Covenants Against Solicitation. In further consideration of the
promises and commitments of the Bank as described above, Xxxxx agrees that, for
a period of two years from the Effective Date of this Confidentiality Agreement,
he will not:
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a. personally solicit or recruit persons employed on the
Effective Date by Xxxxxx National Bank, for employment with any other banking
institution doing business in Horry or Georgetown Counties:
b. provide names of persons employed on the Effective Date by
Xxxxxx National Bank to any employee or agent of any other banking institution
doing business in Horry or Georgetown Counties, with which he may be affiliated
or to any recruiters, "headhunters," or other third-parties, for the purpose of
soliciting or recruiting such person(s) for employment with any other banking
institution doing business in Horry or Georgetown Counties;
c. Personally participate in discussions or communications
with any person employed on the Effective Date by Xxxxxx National Bank,
concerning employment with any other banking institution doing business in Horry
or Georgetown Counties with which he may be affiliated.
d. The following are examples of activities that shall not be
considered violations of this provision:
(1) Communicating with employees of Xxxxxx National
Bank about matters other than
employment with any bank or banking headhunter.
(2) Communicating with a person not employed by
Xxxxxx National Bank as of the
Effective Date of this Agreement concerning employment with any bank.
e. The mere employment of a former Xxxxxx National Bank
employee by a banking institution that also employs Xxxxx does not constitute a
violation of this provision.
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4. Reasonableness of Restrictions.
x. Xxxxx has carefully read and considered the provisions of
Paragraphs 2 and 3, and, having done so, agrees that the restrictions set forth
in those Paragraphs, including, but not limited to the time period of
restriction are fair and reasonable and are reasonably required for protection
of the legitimate interests of the Bank, their officers, directors,
shareholders, and other employees. Further, Xxxxx acknowledges and agrees that
the restrictions imposed by this Agreement will not preclude or unduly restrict
him from other gainful employment. Xxxxx recognizes that the restrictions have
been carefully tailored so as to protect the Bank's interests in Horry and
Georgetown Counties, the area where it does substantially all of its business,
and are not broader than required.
b. In the event that any provision of Paragraphs 2 or 3 shall
be held to be invalid or unenforceable, the remaining provisions thereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable provision(s) had not been included therein.
c. In the event that any provision of Paragraphs 2 or 3
relating to the time period and/or related aspects is found by a court of
competent jurisdiction to exceed the maximum restrictiveness such court deems
reasonable and enforceable, then it is the express desire and intent of the
parties that such provision not be rendered invalid thereby, but rather that the
duration, scope, or nature of the restriction be deemed reduced or modified to
the extent necessary to render such provision reasonable, valid and enforceable.
The time period and/or related aspects deemed reasonable and enforceable by the
court shall then become, and thereafter be, the maximum restriction in such
regard, and the provision, as reformed, shall remain valid and enforceable. The
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parties acknowledge that this subparagraph is contractual in nature and
expressly grant a court of competent jurisdiction the authority to effectuate
this contractual provision.
5. Enforcement. Xxxxx expressly understands and agrees that in the
event Xxxxx is determined by a court of competent jurisdiction to have violated
any of the terms of this Agreement, the Bank shall be entitled to:
a. Monetary damages resulting from such violation;
b. Immediate injunctive relief enjoining Xxxxx from engaging
in any further conduct in violation of this Agreement;
c. Reasonable attorneys fees and costs necessitated by Xxxxx'
breach of this Agreement; and
d. Any other appropriate legal or equitable relief, including
specifically any relief available to the Bank under S.C. Code ss.39-8-10, et
seq.
If a court of competent jurisdiction determines that Xxxxx has
not violated his duties hereunder, Xxxxx shall be entitled to an award of
attorneys fees and costs.
6. Choice of Law and Venue. This Agreement shall be governed in all
respects by the laws of the State of South Carolina, and Xxxxx hereby expressly
consents to the jurisdiction of any state of federal court located in Charleston
County, South Carolina for the resolution of all disputes arising under this
Confidentiality Agreement, including disputes about the meaning and
enforceability of any of the terms and conditions of this Confidentiality
Agreement.
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7. Merger Clause. This document, incorporating the terms of the
Settlement Agreement entered this day by the parties, represents the final
agreement of the parties and no other document nor any negotiation or prior
draft of this agreement shall have any force or effect.
8. This Agreement shall be binding upon, and shall inure to the benefit
of, the Bank and Xxxxx, and their respective heirs, personal and legal
representatives, successors, assigns, officers, directors, shareholders or
employees.
Xxxxx acknowledges that he/she has read the terms of this Agreement and
understands the duties and obligations which it imposes upon him/her. Xxxxx
accepts the terms of this Agreement and further agrees to conduct
himself/herself in accordance with the terms of this Agreement at all times.
(Remainder of Page Intentionally left Blank. Signature pages to Follow.)
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IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Settlement Agreement as of the 28th day of December 2006.
[SIGNATURES OMITTED]
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