EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (sometimes referred to below as the
"Agreement"), Made and entered into this the 1st day of February, 1999, by and
between XXXXX X. XXXXXX, a resident of Mecklenburg County, North Carolina
(herein referred to as "Employee"); and CAROLINA FIRST BANCSHARES, INC., a
corporation with its principal office in Lincolnton, North Carolina (hereinafter
referred to as "Employer").
WHEREAS, the Employer desires to secure the future services of the
Employee and to that end desires to enter into this Employment Agreement with
Employee, upon the terms and conditions herein set forth, which replaces and
supersedes all prior employment contracts, agreements or understandings, if any,
between the Employee and the Employer; and,
WHEREAS, the Employee wishes to continue employment and enter into this
Employment Agreement with Employer effective as of January 1, 1999;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and of other good and valuable consideration, the receipt
and sufficiency of which are mutually acknowledged, the parties hereto,
intending legally to be bound, agree as follows:
Section 1. Agreement of Employment. Employer hereby agrees to continue
to employ the Employee and Employee hereby agrees to remain employed by Employer
for the term, and upon and subject to the terms and conditions hereafter set
forth.
Section 2. Term. Employer and Employee hereby agree that Employee shall
become employed by Employer under the terms of this Agreement as of January 1,
1999 (the "Commencement Date"), and shall remain employed by Employer for a
period of five (5) years (through December 31, 2003), unless sooner terminated
pursuant to the terms hereof (the "Employment Period").
Section 3. Employee Representations. Employee represents to Employer
that Employee is not subject to an employment agreement with any other employer,
nor to any other agreements under the terms of which she may be prohibited from
accepting employment with Employer, and that Employee may accept employment with
Employer effective as of the Commencement Date.
Section 4. Duties of Employee.
(a) Subject to the supervision and pursuant to the orders,
advice and directions of the Board of Directors and President of the Employer,
Employee shall perform her assigned duties as Senior Vice President, Chief
Financial Officer, Secretary and Treasurer of Employer and shall perform such
other duties as are customarily performed by one holding such positions in
other, the same or similar business or enterprises as that engaged in by
Employer.
(b) Employee agrees that she will at all times faithfully,
industriously, and to the best of her ability, experience and talents, perform
all of the duties that may be reasonably required of and from her pursuant to
the express and implied terms hereof, to the reasonable satisfaction of the
President and Board of Directors of Employer.
(c) Employee hereby agrees to refrain from engaging in any
ventures or enterprises which might interfere with the performance of her
express and implied duties hereunder. Employee shall at all times conduct
herself in a manner that will not prejudice or injure the reputation of
Employer, its other employees or any of its affiliates.
Section 5. Employer's Right to Benefits of Work Performed. Employer
shall be entitled to all of the benefits, emoluments, and profits arising from
or incident to any and all work, services, and advice of the Employee performed
or rendered in the course of Employee's employment hereunder.
Section 6. Compensation, Expenses and Benefits.
(a) Employer shall pay Employee during the Employment Period,
and in consideration for the services to be performed by Employee, a salary at
the rate of $90,000.00 per annum (the "Annual Salary"), less deductions required
by law and Employee authorized deductions, payable in such equal periodic
installments as Employer may determine, but not less frequently than monthly.
Provided, however, that each year the salary of the Employee shall be reviewed
and a salary amount set for the following year by mutual agreement with the
Board of Directors. In the event an agreement cannot be reached as to the salary
amount, the salary shall be that set for the previous year.
(b) In addition to the Annual Salary described in Section 6(a)
above, Employer agrees to reimburse Employee promptly (in accordance with
policies and procedures adopted by the Board of Directors of Employer) for all
reasonable and necessary expenses incurred by Employee in connection with the
Employer's business, including, without limitation, all reasonable and necessary
expenses of travel, lodging, entertainment, and meals away from home incurred by
Employee in the course of her employment hereunder. Employee agrees to keep and
maintain such records of the aforesaid expenses as Employer may require and to
account to Employer therefore prior to any such reimbursement. Employee shall
comply with all reasonable and lawful policies and procedures applied by
Employer from time to time to its employees generally and relating to or
regulating the nature and extent of reimbursement expenses, and the manner of
accounting and reimbursement therefor.
(c) Employer hereby agrees to make available to Employee,
during the Employment Period, all benefits which are generally available to
similarly situated employees of the Employer, subject to and on a basis
consistent with the terms and conditions of such benefits. In addition, Employer
agrees to provide Employee with the following benefits.
(1) A non-contributing qualified employee profit-sharing plan
and participation in the Employer's 401(K) Plan.
(2) A non-contributing employee's group life insurance plan
which will provide life insurance for Employee in the amount equal to two (2)
times Employee's annual salary (or a maximum of $250,000.00) during all times
that Employee remains an employee of Employer.
(3) A non-contributing accident and health insurance plan for
the payment of medical care expenses for Employee.
(4) Three (3) weeks of vacation time each year.
(5) A non-contributing disability income plan.
As to (1), (2), (3) and (5) above, all such benefits shall be
subject to the plans adopted by the Employer from time to time, it being
understood by the parties that said benefits also apply to the Employer's work
force generally.
The Employer, in its sole discretion, may apply for additional
insurance in its own name and for its own benefit covering the Employee for
life, medical, or disability insurance, in any amount deemed advisable and the
Employee shall have no right, title or interest therein. The Employee shall
submit to any required examination and shall execute and assign and/or deliver
such application and policies necessary to effectuate such insurance coverage.
The Employer may require the Employee to have a thorough
annual physical examination and will reimburse the Employee for the expense.
Except as otherwise specifically set forth herein, nothing
herein shall be construed to impose upon Employer any legal obligation to
establish or maintain any particular benefit or benefits for any of its
employees.
(d) Employee shall also be eligible to receive an annual bonus
based upon performance criteria to be determined by the Board of Directors of
the Employer. The Board of Directors of the Employer shall determine the
performance criteria to be met by Employee for each fiscal year of Employer or
other twelve (12) month period designated by the Board of Directors of the
Employer during the term of this Agreement prior to the commencement of each
fiscal year or such other period and shall cause such criteria to be
communicated in writing to Employee. The amount of Employee's bonus shall be
determined based upon the level of achievement of Employee as compared with the
established performance criteria. The final determination concerning the levels
of achievement attained by Employee and the amount of each such annual bonus
shall be made by the Board of Directors of the Employer in its sole judgment.
Any bonus earned by the Employee pursuant to this Section 6(d) shall be payable
to Employee, less deductions required by law and Employee authorized deductions,
no later than March 31 following the year to which such bonus relates. The bonus
provided for hereunder shall be payable with respect to the fiscal year or such
other period immediately preceding the year in which the bonus is paid and shall
not be payable if the Employee is terminated for cause prior to the end of the
fiscal year or such other period for which the bonus is to be paid. In the event
that the Employee dies, is terminated because of illness or disability as
provided in Section 10 of this Agreement, is terminated by the Employer without
cause prior to the end of the fiscal year or such other period for which such
bonus is to be paid, or is terminated by Employee pursuant to Section 10(d), a
pro rata portion of such bonus, if otherwise earned, shall nevertheless be paid
to the Employee or her estate, as the case may be. The pro rata portion shall be
based upon the number of days the Employee was employed by the Employer during
such fiscal year as compared to 365.
Section 7. Non-Competition.
(a) While Employee is employed by Employer under this
Agreement, Employee will not, directly or indirectly, own, manage, operate,
control or participate in the ownership, management, operation or control of, or
be connected with as an officer, employee, partner, director, consultant, or
otherwise, or have any financial interest in, or aid or assist anyone else in
the conduct of, any financial institution which customarily takes deposits and
gives loans, or is about to or proposes to engage in such banking activities,
which is in competition with businesses conducted by the Employer or its
affiliates [provided, however, that notwithstanding the foregoing the Employee
shall be entitled to acquire as a passive investment a proprietary interest not
to exceed 3% of the equity of any publicly-held company) .
(b) While Employee is employed by the Employer under this
Agreement Employee will not, directly or indirectly, employ, solicit for
employment, or advise or recommend to any other person that such person employ
or solicit for employment, any person employed by the Employer or its
affiliates.
(c) While Employee is employed by the Employer under this
Agreement Employee shall not, directly or indirectly, solicit or advise or
recommend to any other person that such person solicit, any customer of the
Employer or its affiliates for the purpose of obtaining banking services of such
customer.
(d) For one (1) year after the termination of the employment
of Employee hereunder for any reason whatever other than (1) termination of the
employment of Employee by Employer without cause pursuant to Section 10(e) or,
(2) by termination of the employment of Employee upon material breach of this
Agreement by Employer pursuant to Section 10(d), Employee will not, directly or
indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected with as an officer,
employee, partner, director, consultant, or otherwise, or have any financial
interest in, or aid or assist anyone else in the conduct of, any financial
institution which customarily takes deposits and gives loans, or is about to or
proposes to engage in such banking activities, which is in competition with
businesses conducted by the Employer or its affiliates [provided, however, that
notwithstanding the foregoing the Employee shall be entitled to acquire as a
passive investment a proprietary interest not to exceed 3% of the equity of any
publicly-held company].
(e) For a period of two (2) years after the termination of the
employment of Employee hereunder, for any reason whatever other than (1) by
termination of the employment of Employee by Employer without cause pursuant to
Section 10(e), or (2) by termination of the employment of Employee upon material
breach of this Agreement by Employer pursuant to Section 10(d), Employee will
not, directly or indirectly, employ, solicit for employment, or advise or
recommend to any other person that such person employ or solicit for employment,
any person employed by the Employer or its affiliates.
(f) For a period of two (2) years after the termination of the
employment of Employee hereunder, for any reason whatever other than (1) by
termination of the employment of Employee by Employer without cause pursuant to
Section 10(e), or (2) by termination of the employment of Employee upon material
breach of this Agreement by Employer pursuant to Section 10(d), Employee shall
not, directly or indirectly, solicit or advise or recommend to any other person
that such person solicit, any customer of the Employer or its affiliates for the
purpose of obtaining banking services of such customer.
(g) For purposes of this Section 7, "Employer" shall also
include the Employer's subsidiaries and other affiliates.
Section 8. Confidentiality. The Employee acknowledges that she has had
and will have access to certain information related to the business, operations,
future plans and customers of the Employer, the disclosure or use of which could
cause the Employer substantial losses and damages. Accordingly, the Employee
covenants that during the term of her employment with the Employer and
thereafter she will keep confidential all business and technical information and
documents which constitute trade secrets furnished to her by or on behalf of the
Employer and not use the same to her advantage, except to the extent such
information or documents are or thereafter become lawfully obtainable from other
sources, are in the public domain through no fault on her part, or is consented
to in writing by the Employer. Upon termination of her employment, the Employee
shall return to the Employer all records, list, files and documents which are in
her possession and which relate to the Employer. This restriction shall expire
two (2) years from the date of Employee's termination.
For the purposes of this Section 8, "Employer" shall also include the
Employer's subsidiaries and other affiliates.
Section 9. Limitations on Section 7. Upon a breach of this Employment
Agreement by Employer failing to make payments required of it upon a termination
of Employee's employment, the provisions of Section 7 shall terminate in the
event Employer, after thirty (30) days notice from Employee, fails to cure the
breach. Upon the failure of Employer to cure the breach within the required
time, Employee may immediately declare any remaining sums to be immediately due
and payable and may institute such legal actions as may be necessary to collect
said sums.
Section 10. Termination. If the term of this Agreement has not sooner
expired by lapse of time, the term of Employee's employment shall terminate upon
the occurrence of any of the following:
(a) Death. Upon the death of the Employee;
(b) Disability. Upon the total and permanent disability of the
Employee. If it is determined that Employee is disabled and that such disability
is likely to be permanent (herein referred to as a "Determination of Permanent
Disability"), Employer may terminate this Agreement. Said termination shall not
be effective until such time as Employer has given written notice to Employee,
at the address specified in Section 14, of its intent to terminate this
Agreement. For the purposes of this Section 10(b), the term "Disability" shall
mean the Employee's inability to perform functions normally performed for
Employer by the Employee. A "Determination of Permanent Disability" may be made
at the request of either the Employer or Employee; provided, however, that in
the event Employee is unable, due to her disability, to make such a request, her
spouse or other designee may make a request in her stead. In the event of a
request by either Employee or Employer for a "Determination of Permanent
Disability", each of Employee and Employer shall designate one doctor to
participate in the determination; provided, however, that if Employee is unable,
due to her disability, to make such a designation, her spouse or other designee
shall make the designation in her stead. If the two doctors so designated agree
on a determination required by this Section 10(b), such determination shall be
final. If the two doctors fail to agree, they shall designate a third doctor to
make the determination required by this Section 10(b), which determination shall
be final.
(c) By the Employer for Cause. Employee's employment may be
terminated effective immediately by the Employer for cause by notice of
termination to the Employee. "Cause" for such termination shall mean the
following:
(i) Dishonesty of the Employee with respect to her
employment with Employer;
(ii) misfeasance or nonfeasance with respect to her
employment with Employer;
(iii) Conviction of the Employee upon a felony charge
or upon a charge of any crime involving moral
turpitude;
(iv) willful or prolonged absence from work by the
Employee (other than by reason of disability due to physical or mental illness)
or failure, neglect or refusal by the Employee to perform her duties;
(v) Material breach by the Employee of any of the
covenants contained in this Agreement.
(d) By Employee. By Employee upon a material breach of this
Agreement by Employer when after thirty (30) days notice of the breach Employer
fails to cure the breach. Any such termination must be elected by Employee
within thirty (30) days of Employer's failure to cure such breach or the breach
will be deemed to have been waived for all purposes.
(e) By Employer for any reason other than cause upon ninety
(90) days notice to Employee. Cause shall have the ----------- definition stated
above.
Except as otherwise provided in this Agreement, Employee's right to
further compensation and benefits under this Agreement shall cease upon the
termination of her employment. Except as otherwise provided in this Agreement,
Employee shall remain entitled to any unpaid compensation and benefits accrued
prior to termination. Likewise, Employee shall be entitled to receive all
insurance and disability benefits if termination is due to death or disability.
In the event that the employment of the Employee is terminated by the Employer
without cause pursuant to Section 10(e) during the terms of this Agreement, or
should Employee terminate her employment pursuant to Section 10(d), the Employer
shall continue to pay the Annual Salary and provide the benefits set forth in
Section 6 of this Agreement [except for the annual bonus, the payment of which
is controlled by Section 6(d)] for a period of twelve (12) months after the
termination of Employee's employment, as severance pay.
Section 11. Change of Control. If, at any time within thirty-six (36)
months following a "Change in Control" as defined hereafter, Employee is
terminated by Employer (or its successor) without cause pursuant to Section
10(e), Employer shall continue to pay the Annual Salary and provide the benefits
set forth in Section 6 of this Agreement for a period of twenty-four (24) months
after the termination of Employee as severance pay (this compensation to be in
lieu of that severance compensation set forth in Section 10 for termination
without cause). Said Annual Salary shall be paid periodically and on the same
schedule as that prior to Employee's termination. The Employer (or its
successor) may not, following a Change in Control, permanently assign the
Employee to work more than forty (40) miles from the intersection of N.C.
Highway 16 and Huntersville/Mt. Xxxxx Highway. Notwithstanding the foregoing,
the Employer (or its successor) may, following a Change in Control, require the
Employee to work more than fifty (50) miles from the above intersection from
time to time but no more often than ninety (90) days per year.
A "Change in Control" shall be deemed to have occurred if and when any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
and Exchange Act of 1934) is or becomes a beneficial owner, directly or
indirectly, of securities of the Employer or its parent company representing
greater than fifty percent (50%) of the combined voting power of the Employer's
or its parent company's then outstanding securities. Notwithstanding the
foregoing, no "change in control" shall be deemed to have occurred by virtue of
any transaction which results in the Employee and/or a member or members of the
Employer's present Board of Directors (i.e. existing on January 1, 1999), or a
group of persons including the Employee and/or a member or members of the
Employer's present Board of Directors, acquiring, directly or indirectly, more
than fifty percent (50%) of the combined voting power of the Employer's or its
parent company's outstanding securities. In limitation of the provisions in the
preceding sentence, a "change in control" shall be deemed to have occurred if
the member or members of the Employer's present Board of Directors do not own,
control or constitute a material portion of the acquiring "person". "Material"
shall mean ownership or control of at least twenty percent (20%) of the
acquiring person.
Any dispute or controversy arising under or in connection with this
Section 11 shall be settled exclusively by arbitration in the State of North
Carolina in accordance with the rules of the American Arbitration Association
then in effect.
Section 12. Enforcement of Employee Restrictions. Employee acknowledges
that she has carefully read and considered the provisions of this Agreement and,
having done so, agrees that the restrictions set forth in this Agreement in
Sections 7 and 8 (including, but not limited to, the period of restriction and
the geographical area of restriction set forth therein) are fair and reasonable
and are necessarily required for the protection of the interests of the Employer
and its affiliates. Employee further acknowledges that due to the nature of
Employer's business, more limited restriction than those found herein would not
be reasonable or appropriate. The Employee covenants and agrees with Employer
that the Employer shall be entitled to an accounting and repayment of all
profits, compensation, commissions, remunerations or benefits which the Employee
directly or indirectly has realized and/or may realize as a result, growing out
of or in connection with any such violations; such remedy to be in addition to
and not in limitation to any injunctive relief or other rights or remedies to
which Employer or its affiliates is or may be entitled to at law or in equity.
In the event that notwithstanding the foregoing, any part of the covenants set
forth in this Agreement shall be held to be invalid or unenforceable, the
remaining parts hereof shall nevertheless continue to be valid and enforceable
as though the invalid and unenforceable part had not been included herein. In
the event that any provisions of this Agreement relating to the time period or
geographical restriction shall be declared by a court of competent jurisdiction
to exceed the maximum time periods or geographical areas which such court deems
reasonable or enforceable, such time periods or geographical areas of
restriction shall be deemed to become and thereafter be the maximum time period
or geographical areas which such court deems reasonable and enforceable.
Section 13. Stock Options. Any and all stock options previously issued
in favor of Employee shall remain in full force and effect according to their
terms.
Section 14. Notices. All notices required or permitted hereunder shall
be deemed to be duly given if in writing and delivered personally or sent by
United States registered or certified mail, postage pre-paid, addressed to
Employer at:
President, Carolina First BancShares, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
and addressed to Employee at:
Xxxxx X. Xxxxxx
00000 Xxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
or at such changed addresses as the parties may designate in writing.
Section 15. Miscellaneous.
(a) Headings. Headings, titles and captions contained in this
Employment Agreement are inserted only as a matter of convenience and reference
and in no way define, limit, extend, or describe the scope of this Agreement or
the intent of any provisions hereof.
(b) Gender. The use in this Agreement of gender-specific words
or phrases shall be deemed to include the masculine, feminine or neuter genders,
as the context may require.
(c) Entire Agreement. This writing constitutes the entire
agreement between the parties hereto and supersedes any prior understanding or
agreements among them respecting the subject matter. There are no extraneous
representations, arrangements, understandings, or agreements, oral or written,
in respect of the subject matter of this Agreement, among the parties hereto,
except those fully expressed herein.
(d) Amendments. No amendments, changes, alterations,
modifications, additions and qualifications of the terms of this Agreement shall
be made or binding unless made in writing and signed by all the parties hereto.
(e) Waiver. The failure of either party to enforce at any time
any of the provisions of this Agreement shall not be construed as a waiver of
such provisions or of the right of such party thereafter to enforce any such
provisions.
(f) Invalidity and Severability. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the enforceability of other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.
(g) Governing Law. This Agreement shall be construed and
governed in accordance with the laws of the State of North Carolina. Employer
hereby consents to the jurisdiction of any local, state or federal court located
in the State of North Carolina, and hereby waives personal service of process
and consents to service of process by certified or registered mail directed to
Employee at Employee's address stated in Section 11 of this Agreement. Employee
further specifically consents to venue in Lincoln County.
(h) Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their heirs, successors and,
as allowed herein, assigns.
(i) Assignment. The terms of this Employment Agreement are
personal to Employee. As such Employer may not assign its interest in this
Employment Agreement other than to Employer's subsidiaries, parent company,
sister companies and such affiliates as may exist from time to time (the
"Carolina First Family of businesses"). Employer may also assign this Employment
Agreement pursuant to any Merger or Change of Control as set forth in Section 11
herein (subject to Employee's rights specified in Section 11). Employee may not
assign her interest in this Employment Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
Employer:
CAROLINA FIRST BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxx, III
------------------------------
Title: President and CEO
ATTEST:
/s/ Xxx Xxxxxx
---------------
Assistant Secretary
(Corporate Seal)
Employee:
/s/ Xxx X. Xxxxxx (SEAL)
---------------------------------
Xxxxx X. Xxxxxx
