EXHIBIT 10.4
STATE OF NORTH CAROLINA
COUNTY OF BUNCOMBE
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of ___________________, 2000 by and
between THE BANK OF ASHEVILLE (hereinafter referred to as the "Bank") and G.
XXXXXX XXXXXXXXX (hereinafter referred to as "Greenwood").
W I T N E S S E T H:
WHEREAS, the expertise and experience of Greenwood and his
relationships and reputation in the financial institutions industry are
extremely valuable to the Bank; and
WHEREAS, it is in the best interests of the Bank and its shareholders
to maintain an experienced and sound executive management team to manage the
Bank and to further the Bank's overall strategies to protect and enhance the
value of its shareholders' investments; and
WHEREAS, the Bank and Greenwood desire to enter into this Agreement to
establish the scope, terms and conditions of Greenwood's employment by the Bank;
and
WHEREAS, the Bank and Greenwood desire to enter into this Agreement
also to provide Greenwood with security in the event of a change of control of
the Bank and to insure the continued loyalty of Greenwood during any such change
of control in order to maximize shareholder value as well as the continued safe
and sound operation of the Bank.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable considerations, the receipt and sufficiency of which hereby are
acknowledged, the Bank and Greenwood hereby agree as follows:
1. EMPLOYMENT. The Bank hereby agrees to employ Greenwood, and
Greenwood hereby agrees to serve as an officer of the Bank, all upon the terms
and conditions stated herein. As an officer of the Bank, Greenwood will (i)
serve as President and Chief Executive Officer of the Bank, and (ii) have such
other duties and responsibilities, and render to the Bank such other management
services, as are customary for persons in Greenwood's position with the Bank or
as shall otherwise be reasonably assigned to him from time to time by the Bank.
Greenwood shall faithfully and diligently discharge his duties and
responsibilities under this Agreement and shall use his best efforts to
implement the policies established by the Bank. Greenwood hereby agrees to
devote such number of hours of his working time and endeavors to
the employment granted hereunder as Greenwood and the Bank shall deem to be
necessary to discharge his duties hereunder, and, for so long as employment
hereunder shall exist, Greenwood shall not engage in any other occupation which
requires a significant amount of Greenwood's personal attention during the
Bank's regular business hours or which otherwise interferes with Greenwood's
attention to or performance of his duties and responsibilities as an officer of
the Bank hereunder except with the prior written consent of the Bank. However,
nothing herein contained shall restrict or prevent Greenwood from personally,
and for Greenwood's own account, trading in stocks, bonds, securities, real
estate or other forms of investment for Greenwood's own benefit so long as said
activities do not interfere with Greenwood's attention to or performance of his
duties and responsibilities as an officer of the Bank hereunder.
During the term of this Agreement, Greenwood shall be allowed,
in his sole discretion, to maintain his primary work location in Asheville,
North Carolina.
2. COMPENSATION. For all services rendered by Greenwood to the
Bank under this Agreement, the Bank shall pay Greenwood a base salary at a rate
of One Hundred Twenty-Five Thousand Dollars and 00/100's ($125,000.00) per
annum; provided that the rate of such salary shall be reviewed by the Board of
directors not less often than annually. Salary paid under this Agreement shall
be payable in cash not less frequently than monthly. All compensation hereunder
shall be subject to customary withholding taxes and such other employment taxes
as are required by law. In the event of a Change in Control (as defined in
Paragraph 8), Greenwood's base salary shall be increased not less than six
percent (6%.) annually during the term of this Agreement.
3. PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS;
FRINGE BENEFITS. Subject to the terms and conditions of this Agreement,
Greenwood shall be entitled to participate in any and all employee benefit
programs and compensation plans from time to time maintained by the Bank and
available to all employees of the Bank, all in accordance with the terms and
conditions (including eligibility requirements) of such programs and plans of
the Bank, resolutions of the Bank's Board of Directors establishing such
programs and plans, and the Bank's normal practices and established policies
regarding such programs and plans.
In addition to the other compensation and benefits described
in this Agreement, the Bank shall :
(i) Provide Greenwood with four (4) weeks of paid vacation
leave;
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(ii) The Bank shall assume payment of Greenwood's dues of the
Asheville Country Club, Asheville, North Carolina provided that Greenwood shall
be responsible for all personal expenses for use of such clubs;
(iii) The Bank shall reimburse Greenwood for all reasonable
expenses incurred by him in the performance of his duties under this Agreement
and documented to the reasonable satisfaction of the Bank pursuant to
established policies;
(iv) The Bank shall provide Greenwood, his spouse, and his
dependent son major medical insurance coverage at no cost to Greenwood which
will be a policy at least equivalent to the major medical insurance coverage
generally provided to active full-time employees of the Bank from time to time;
and
(v) The Bank shall provide, effective upon completion of the
initial five year term of this Agreement or sooner should a "change of control"
of the Bank occur within such five year period, a retirement annuity that will
pay Greenwood $40,000 per year for ten years commencing on the date of his
retirement.
(vi) Upon adoption by the Board of Directors of either the
Bank, or its holding company, of a stock incentive plan, Greenwood shall be
granted options to purchase shares of common stock reserved under such plan in
such amount as shall be determined by the stock option committee established
pursuant to such plan. The minimum aggregate number of options that will be
granted to Greenwood after adoption of such stock incentive plan and during the
initial five (5) year term of this Agreement and prior to any
"change-in-control" of the Bank will be equal in value to an amount equivalent
to three hundred percent (300%) of his compensation set forth in Paragraph 2
hereof. Additionally, the grant of such options will provide for immediate
vesting should a "change-in-control" of the Bank occur as such term is defined
in Paragraph 8 hereof.
4. TERM. Unless sooner terminated as provided in this
Agreement and subject to the right of either Greenwood or the Bank to terminate
Greenwood's employment at any time as provided herein, the term of this
Agreement and Greenwood's employment with the Bank hereunder shall be for a
period commencing on the date hereof and continuing for a period of five (5)
years. Within ninety (90) days prior to the third anniversary of this Agreement,
and within ninety (90) days of each anniversary thereafter, the Board of
Directors shall determine whether the term shall be extended. Should the Board
of Directors make such an affirmative
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decision to extend the Agreement, one additional year to the term of this
Agreement shall be added at the end of the third anniversary of this Agreement
and, with subsequent affirmative decisions to extend, on each anniversary date
thereafter.
5. CONFIDENTIALITY AND NON-COMPETITION. Greenwood hereby
acknowledges and agrees that (i) in the course of his service as an officer of
the Bank, he will gain substantial knowledge of and familiarity with the Bank's
customers and its dealings with them, and other information concerning the
Bank's business, all of which constitutes valuable assets and privileged
information that is particularly sensitive due to the fiduciary responsibilities
inherent in the banking business; and, (ii) in order to protect the Bank's
interest in and to assure it the benefit of its business, it is reasonable and
necessary to place certain restrictions on Greenwood's ability to compete
against the Bank and on his disclosure of information about the Bank's business
and customers. For that purpose, and in consideration of the Bank's agreements
contained herein, Greenwood covenants and agrees as provided below.
For the purposes of this Paragraph 5, the following terms
shall have the meanings set forth below:
CUSTOMER. The term "Customer" means any Person with whom, as
of the effective date of termination of this Agreement or Greenwood's employment
with the Bank for any reason, the Bank has or has had a depository, loan and/or
other banking relationship.
FINANCIAL INSTITUTION. The term "Financial Institution" means
any federal or state chartered bank, savings bank, savings and loan association
or credit union, or any holding company for or corporation that owns or controls
any such entity, or any other Person engaged in the business of making loans of
any type or receiving deposits, other than the Bank.
PERSON. The term "Person" means any natural person or any
corporation, partnership, proprietorship, joint venture, limited liability
company, trust, estate, governmental agency or instrumentality, fiduciary,
unincorporated association or other entity.
(a) CONFIDENTIALITY COVENANT. Greenwood covenants and agrees
that any and all data, figures, projections, estimates, lists, files, records,
documents, manuals or other such materials or information (financial or
otherwise) relating to the Bank and its banking business, regulatory
examinations, financial results and condition, lending and deposit operations,
customers (including lists of the Bank's customers and information regarding
their
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accounts and business dealings with the Bank), policies and procedures, computer
systems and software, shareholders, employees, officers and directors (herein
referred to as "Confidential Information") are proprietary to the Bank and are
valuable, special and unique assets of the Bank's business to which Greenwood
will have access during his employment with the Bank. Greenwood agrees that (i)
all such Confidential Information shall be considered and kept as the
confidential, private and privileged records and information of the Bank, and
(ii) at all times during the term of his employment with the Bank and following
the termination of this Agreement or his employment for any reason, and except
as shall be required in the course of the performance by Greenwood of his duties
on behalf of the Bank or otherwise pursuant to the direct, written authorization
of the Bank, Greenwood will not: divulge any such Confidential Information to
any other Person or Financial Institution; remove any such Confidential
Information in written or other recorded form from the Bank's premises; or make
any use of any Confidential Information for his own purposes or for the benefit
of any Person or Financial Institution other than the Bank. However, following
the termination of Greenwood's employment with the Bank, this subparagraph (b)
shall not apply to any Confidential Information which then is in the public
domain (provided that Greenwood was not responsible, directly or indirectly, for
permitting such Confidential Information to enter the public domain without the
Bank's consent), or which is obtained by Greenwood from a third party which or
who is not obligated under an agreement of confidentiality with respect to such
information.
(b) NON-COMPETITION COVENANT. During the term of this
Agreement and for a period of two years after termination, Greenwood agrees that
he will not, within Buncombe County, North Carolina, directly or indirectly own,
manage, operate, join, control or participate in the management, operation or
control of or be employed by or connected in any manner with, any financial
institution which competes with the Bank without the prior written consent of
the Board of Directors of the Bank and provided, however, that the provisions of
this Section 5(b) shall not apply in the event that Greenwood's employment
hereunder is terminated by the Board of Directors of the Bank without "cause" as
such term is defined in Section 6(d) hereof, and in the event that no additional
non-competition agreement is made as part of a separate severance agreement
giving rise to Greenwood's termination of this Agreement.
(c) REMEDIES FOR BREACH. Greenwood understands and agrees that
a breach or violation by him of the covenants contained in Paragraph 5 of this
Agreement will be
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deemed a material breach of this Agreement and will cause irreparable injury to
the Bank, and that it would be difficult to ascertain the amount of monetary
damages that would result from any such violation. In the event of Greenwood's
actual or threatened breach or violation of the covenants contained in Paragraph
5, the Bank shall be entitled to bring a civil action seeking an injunction
restraining Greenwood from violating or continuing to violate those covenants or
from any threatened violation thereof, or for any other legal or equitable
relief relating to the breach or violation of such covenant. Greenwood agrees
that, if the Bank institutes any action or proceeding against Greenwood seeking
to enforce any of such covenants or to recover other relief relating to an
actual or threatened breach or violation of any of such covenants, Greenwood
shall be deemed to have waived the claim or defense that the Bank has an
adequate remedy at law and shall not urge in any such action or proceeding the
claim or defense that such a remedy at law exists. However, the exercise by the
Bank of any such right, remedy, power or privilege shall not preclude the Bank
or its successors or assigns from pursuing any other remedy or exercising any
other right, power or privilege available to it for any such breach or
violation, whether at law or in equity, including the recovery of damages, all
of which shall be cumulative and in addition to all other rights, remedies,
powers or privileges of the Bank.
Notwithstanding anything contained herein to the contrary,
Greenwood agrees that the provisions of Paragraph 5(a) above and the remedies
provided in this Paragraph 5(c) for a breach by Greenwood shall be in addition
to, and shall not be deemed to supersede or to otherwise restrict, limit or
impair the rights of the Bank under the Trade Secrets Protection Act contained
in Article 24, Chapter 66 of the North Carolina General Statutes, or any other
state or federal law or regulation dealing with or providing a remedy for the
wrongful disclosure, misuse or misappropriation of trade secrets or other
proprietary or confidential information.
(d) SURVIVAL OF COVENANTS. Greenwood's covenants and
agreements and the Bank's rights and remedies provided for in this Paragraph 5
shall survive any termination of this Agreement or Greenwood's employment with
the Bank.
6. TERMINATION AND TERMINATION PAY.
(a) Greenwood's employment under this Agreement may be
terminated at any time by Greenwood upon sixty (60) days written notice to the
Bank. Upon such termination, Greenwood shall be entitled to receive compensation
through the effective date of such termination; provided, however, that the
Bank, in its sole discretion, may elect for
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Greenwood not to serve out part or all of said notice period.
(b) Greenwood's employment under this Agreement shall be
terminated upon the death of Greenwood during the term of this Agreement. Upon
any such termination, Greenwood estate shall be entitled to receive any
compensation due to Greenwood computed through the last day of the calendar
month in which his death shall have occurred but which remains unpaid.
(c) In the event Greenwood becomes disabled during the term of
his employment hereunder and it is determined by the Bank that Greenwood is
permanently unable to perform his duties under this Agreement, the Bank shall
continue to compensate Greenwood at the level of compensation described in
Paragraph 2 above, and shall continue to provide Greenwood each of the other
benefits set forth or described in this Agreement, for the remaining term of
this Agreement, less any other payments provided under any disability income
plan of the Bank which is applicable to Greenwood. In the event of any
disagreement between Greenwood and the Bank as to whether Greenwood is
physically or mentally incapacitated such as will result in the termination of
Greenwood's employment pursuant to this Paragraph 6(c), the question of such
incapacity shall be submitted to an impartial and reputable physician for
determination, selected by mutual agreement of Greenwood and the Bank or,
failing such agreement, by two (2) physicians (one (1) of whom shall be selected
by the Bank and the other by Greenwood), and such determination of the question
of such incapacity by such physician or physicians shall be final and binding on
Greenwood and the Bank. The Bank shall pay the reasonable fees and expenses of
such physician or physicians in making any determination required under this
Paragraph 6 (c) .
(d) The Bank may terminate Greenwood's employment at any time
for any reason with or without "Cause" (as defined below), but any termination
by the Bank other than termination for "Cause", (as defined below) shall not
prejudice Greenwood's right to compensation or other benefits under this
Agreement for its remaining term. Following any termination of Greenwood's
employment by the Bank for "Cause", Greenwood shall have no further rights under
this Agreement (including any right to receive compensation or other benefits
for any period after such termination).
For purposes of this Paragraph 6 (d) , the Bank shall have
"Cause" to terminate Greenwood's employment upon:
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(i) A determination by the Bank, in good faith, that Greenwood
(A) has breached in any material respect any of the terms or conditions of this
Agreement, or (B) is engaging or has engaged in willful misconduct or conduct
which is detrimental to the business prospects of the Bank or which has had or
likely will have a material adverse effect on the Bank's business or reputation.
Prior to any termination by the Bank of Greenwood's employment for a breach,
failure to perform or conduct described in this subparagraph (i), the Bank shall
give Greenwood written notice which describes such breach, failure to perform or
conduct and if during a period of five business (5) days following such notice
Greenwood cures or corrects the same to the reasonable satisfaction of the Bank,
then this Agreement shall remain in full force and effect. However,
notwithstanding the above, if the Bank has given written notice to Greenwood on
a previous occasion of the same or a substantially similar breach, failure to
perform or conduct, or of a breach, failure to perform or conduct which the Bank
determines in good faith to be of substantially similar import, or if the Bank
determines in good faith that the then current breach, failure to perform or
conduct is not reasonably curable, then termination under this subparagraph (i)
shall be effective immediately and Greenwood shall have no right to cure such
breach, failure to perform or conduct.
(ii) The violation by Greenwood of any applicable federal or
state law, or any applicable rule, regulation, order or statement of policy
promulgated by any governmental agency or authority having jurisdiction over the
Bank or any of its affiliates or subsidiaries (a "Regulatory Authority",
including without limitation the Federal Deposit Insurance Corporation, the
North Carolina Commissioner of Banks or any other banking regulator having legal
jurisdiction over the Bank), which results from Greenwood's gross negligence,
willful misconduct or intentional disregard of such law, rule, regulation, order
or policy statement and results in any substantial damage, monetary or
otherwise, to the Bank or any of its affiliates or subsidiaries or to the Bank's
reputation;
(iii) The commission in the course of Greenwood's employment
with the Bank of an act of fraud, embezzlement, theft or proven personal
dishonesty (whether or not resulting in criminal prosecution or conviction);
(iv) The conviction of Greenwood of any felony or any criminal
offense involving dishonesty or breach of trust, or the occurrence of any event
described in Section 19 of the Federal Deposit Insurance Act or any other event
or circumstance which
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disqualifies Greenwood from serving as an employee or executive officer of, or a
party affiliated with, the Bank or its bank holding company;
(v) Greenwood becomes unacceptable to, or is removed,
suspended or prohibited from participating in the conduct of the Bank's affairs
(or if proceedings for that purpose are commenced) by any Regulatory Authority;
and,
(vi) The occurrence of any event believed by the Bank, in good
faith, to have resulted in Greenwood being excluded from coverage, or having
coverage limited as to Greenwood as compared to other covered officers or
employees, under the Bank's then current "blanket bond" or other fidelity bond
or insurance policy covering its directors, officers or employees.
7. ADDITIONAL REGULATORY REQUIREMENTS. Notwithstanding
anything contained in this Agreement to the contrary, it is understood and
agreed that the Bank (or its successors in interest) shall not be required to
make any payment or take any action under this Agreement if (a) the Bank is
declared by any Regulatory Authority to be insolvent, in default or operating in
an unsafe or unsound manner, or if (b) in the opinion of counsel to the Bank
such payment or action (i) would be prohibited by or would violate any provision
of state or federal law applicable to the Bank, including without limitation the
Federal Deposit Insurance Act and Chapter 53 of the North Carolina General
Statutes as now in effect or hereafter amended, (ii) would be prohibited by or
would violate any applicable rules, regulations, orders or statements of policy,
whether now existing or hereafter promulgated, of any Regulatory Authority, or
(iii) otherwise would be prohibited by any Regulatory Authority.
8. CHANGE IN CONTROL
(a) In the event of a "Change in Control" (as defined in
Subparagraph (d) below), of the Bank, Greenwood shall be entitled to terminate
this Agreement upon the occurrence within twenty-four (24) months following a
change in control of any Termination Event as defined in Subparagraph (b) below.
(b) A Termination Event shall mean the occurrence
of any of the following events:
(i) Greenwood is assigned any duties and/or
responsibilities that are inconsistent with
his position, duties, responsibilities, or
status at the time of the Change in Control
or with his reporting
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responsibilities or titles with the Bank in
effect at such time;
(ii) Greenwood's annual base salary is
reduced below the amount in effect as of the
effective date of a Change in Control or as
the same shall have been increased from time
to time following such effective date;
(iii) Greenwood's life insurance, medical or
hospitalization insurance, disability
insurance, dental insurance, stock option
plans, stock purchase plans, deferred
compensation plans, management retention
plans, retirement plans, or similar plans or
benefits being provided by the Bank to
Greenwood as of the effective date of the
Change in Control are reduced in their level,
scope, or coverage, or any such insurance,
plans, or benefits are eliminated, unless
such reduction or elimination applies
proportionately to all salaried employees of
the Bank who participated in such benefits
prior to such Change in Control; or
(iv) Greenwood is transferred to a location
outside of Asheville, North Carolina, without
Greenwood's express written consent.
A Termination Event shall be deemed to have occurred on the
date such action or event is implemented or takes effect.
(c) In the event that Greenwood terminates this Agreement or
the Bank terminates this Agreement pursuant to this Paragraph 8, the Bank will
be obligated to pay or cause to be paid to Greenwood the greater of (i) all
amounts due and owing to the end of the term of this Agreement, or (ii) an
amount equal to two hundred ninety-nine percent (299%) of Greenwood's "base
amount" as defined in Section 28OG(b) (3) (A) of the Internal Revenue Code of
1986, as amended (the "Code").
(d) For the purposes of this Agreement, the term Change in
Control shall mean any of the following events:
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(i) After the effective date of this
Agreement, any "person" (as such term is
defined in Section 7 (j) (8) (A) of the
Change in Bank Control Act of 1978) ,
directly or indirectly, acquires beneficial
ownership of voting stock, or acquires
irrevocable proxies or any combination of
voting stock and irrevocable proxies,
representing thirty-five percent (35%) or
more of any class of voting securities of the
Bank, or acquires control of in any manner
the election of a majority of the directors
of the Bank;
(ii) The Bank consolidates or merges with or
into another corporation, association, or
entity, or is otherwise reorganized, where
the Bank is not the surviving corporation in
such transaction; or
(iii) All or substantially all of the assets
of the Bank are sold or otherwise transferred
to or are acquired by any other corporation,
association, or other person, entity, or
group.
Notwithstanding the other provisions of this Paragraph 8, a
transaction or event shall not be considered a Change in Control if, (i) the
transaction is effected to reorganize the Bank into a holding company form of
organization or, (ii) prior to the consummation or occurrence of such
transaction or event, Greenwood and the Bank agree in writing that the same
shall not be treated as a Change in Control for purposes of this Agreement.
(e) Amounts payable pursuant to this Paragraph 8 shall be
paid, at the option of Greenwood either in one lump sum or in equal monthly
payments over the remaining term of this Agreement.
(f) Following a Termination Event which gives rise to
Greenwood's rights hereunder, Greenwood shall have twenty-four (24) months from
the date of occurrence of the Termination Event to terminate this Agreement
pursuant to this Paragraph 8. Any such termination shall be deemed to have
occurred only upon delivery to the Bank or any successor thereto, of written
notice of termination which describes the Change in Control and Termination
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Event. If Greenwood does not so terminate this Agreement within such twenty-four
month period, Greenwood shall thereafter have no further rights hereunder with
respect to that Termination Event, but shall retain rights, if any, hereunder
with respect to any other Termination Event as to which such period has not
expired.
(g) It is the intent of the parties hereto that all payments
made pursuant to this Agreement be deductible by the Bank for federal income tax
purposes and not result in the imposition of an excise tax on Greenwood.
However, if any payments to be made to or for the benefit of Greenwood are
deemed to be "parachute payments" as that term is defined in Section 28OG(b) (2)
of the Code, the Bank shall pay to Greenwood the amount of any excise taxes
imposed on Greenwood as well as any additional tax imposed on Greenwood as a
result of such payment.
(h) In the event any dispute shall arise between Greenwood and
the Bank as to the terms or interpretation of this Agreement, including this
Paragraph 8, whether instituted by formal legal proceedings or otherwise,
including any action taken by Greenwood to enforce the terms of this Paragraph 8
or in defending against any action taken by the Bank, the Bank shall reimburse
Greenwood for all costs and expenses, proceedings or actions, in the event
Greenwood prevails in any such action.
9. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall inure to the benefit of and he
binding upon any corporate or other successor of the Bank which shall acquire,
directly or indirectly, by conversion, merger, consolidation, purchase or
otherwise, all or substantially all of the assets of the Bank.
(b) The Bank is contracting for the unique and personal skills
of Greenwood. Therefore, Greenwood shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Bank.
10. MODIFICATION; WAIVER; AMENDMENTS. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the parties hereto. No waiver
by either party hereto, at any time, of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No amendments or
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additions to this Agreement shall be binding unless in writing and signed by
both parties, except as herein otherwise provided.
11. APPLICABLE LAW. This Agreement shall be governed in all
respects whether as to validity, construction, capacity, performance or
otherwise, by the laws of North Carolina, except to the extent that federal law
shall be deemed to apply.
12. SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement
under seal and in such form as to be binding as of the day and year first
hereinabove written.
THE BANK OF ASHEVILLE
By: _____________________________
Xxx X. Xxxxxxx, Chairman
ATTEST:
_______________________________
____________________, Secretary
____________________________
G. Xxxxxx Xxxxxxxxx
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