Exhibit 10.3
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE
SOUTH CAROLINA UNIFORM ARBITRATION ACT
NONCOMPETITION, SEVERANCE AND EMPLOYMENT AGREEMENT
BETWEEN
CAROLINA FIRST CORPORATION AND XXXX XXXXXX
This Noncompetition, Severance and Employment Agreement (this
"Agreement") is made and entered into as of this 5th day of October , 1999, (the
"Effective Date") by and between Xxxx XxXxxx, an individual (the "Executive"),
and Carolina First Corporation, a South Carolina corporation and financial
institution holding company headquartered in Greenville, South Carolina (the
"Company"). As used herein, the term "Company" shall include the Company and any
and all of its affiliates where the context so applies.
W I T N E S S E T H
WHEREAS the Company is engaged in the business of banking primarily in
the State of South Carolina (the "Business");
WHEREAS the Company desires to employ and retain the services of the
Executive in the capacity of Executive Vice President, and the Executive desires
to provide his personal services to the Company;
WHEREAS the Company provides for incentive compensation payments to be
made to the executive officers of the Company (including the Executive) through
a Long Term Incentive Compensation Plan (the "Incentive Compensation Plan");
WHEREAS the terms of this Agreement are intended to be consistent with
the objectives of the Incentive Compensation Plan;
WHEREAS the Executive is willing to accept the employment contemplated
herein under the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Employment. Subject to the terms and conditions hereof, the Company
hereby employs the Executive and Executive hereby accepts such employment as an
Executive Vice President of the Company having such duties and responsibilities
as are set forth in Section 3 below.
2. Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below.
"CHANGE IN CONTROL" shall mean:
(i) the acquisition, directly or indirectly, by any Person
(other than (A) any employee plan established by any "Corporation"
[which for these purposes shall be deemed to be the Company and any
corporation, association, joint venture, proprietorship or partnership
which is connected with the Company either through stock ownership or
through common control, within the meaning of Sections 414(b) and (c)
and 1563 of the Internal Revenue Code of 1986, as amended], (B) the
Company or any of its affiliates (as defined in Rule 12b-2 promulgated
under the Exchange Act), (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (D) a
corporation owned, directly or indirectly, by stockholders of the
Company in substantially the same proportions as their ownership of the
Company), of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from
the Company) representing 25% or more of the combined voting power of
the Company's then outstanding voting securities;
(ii) during any period of up to two consecutive years (not
including any period prior to the Effective Date) individuals who, at
the beginning of such period, constitute the Board cease for any reason
to constitute at least a majority thereof, provided that any person who
becomes a director subsequent to the beginning of such period and whose
nomination for election is approved by at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved (other than a director (A) whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A under
the Exchange Act, or (B) who was designated by a Person who has entered
into an agreement with the Company to effect a transaction described in
clause (i), (iii) or (iv) hereof) shall be deemed a director as of the
beginning of such period;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (other than (A)
a merger or consolidation that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of any Corporation,
at least 51% of the combined voting power of the voting securities of
the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or becomes the
beneficial owner (as defined in clause (i) above), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company) representing 25% or more of the combined
voting power of the Company's then outstanding voting securities; or
-2-
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 75% of
the combined voting power of the voting securities of which are owned
by persons in substantially the same proportions as their ownership of
the Company immediately prior to such sale.
(v) the occurrence of any other event or circumstance which is
not covered by (i) through (iv) above which the Board determines
affects control of the Company and, in order to implement the purposes
of this Agreement as set forth above, adopts a resolution that such
event or circumstance constitutes a Change in Control for the purposes
of this Agreement.
For purposes of this definition of Change in Control, there
shall be a Change in Control in the event of any of the above changes
related to the parent corporation of the Company.
"CAUSE" SHALL MEAN:
(i) IN THE ABSENCE OF A CHANGE IN CONTROL, (a) fraud; or (b)
embezzlement; or (c) conviction of the Executive of any felony; or (d)
a material breach of, or the wilful failure or refusal by the Executive
to perform and discharge the Executive's duties, responsibilities and
obligations under this Agreement; or (e) any act of moral turpitude or
wilful misconduct by the Executive intended to result in personal
enrichment of the Executive at the expense of the Company, or any of
its affiliates or which has a material adverse impact on the Business
or reputation of the Company or any of its affiliates (such
determination to be made by the Board of Directors in its reasonable
judgment); or (f) intentional material damage to the property or
Business of the Company; or (g) gross negligence; or (h) the
ineligibility of the Executive to perform his duties because of a
ruling, directive or other action by any agency of the United States or
any state of the United States having regulatory authority over the
Company.
(ii) IN THE EVENT OF A CHANGE IN CONTROL, (a) the willful and
continued failure of the Executive substantially to perform his duties
with the Company (other than any failure due to physical or mental
incapacity) or (b) willful misconduct materially and demonstrably
injurious to the Company, in each case, as determined in the reasonable
discretion of the Board of Directors.
Notwithstanding the above, the Executive may be terminated for cause only if (1)
the Executive has been provided with written notice of any assertion that there
is a basis for termination for cause which notice shall specify in reasonable
detail specific facts regarding any such assertion, (2) such written notice is
provided to the Executive a reasonable time before the Board meets to consider
any possible termination for cause, (3) at or prior to the meeting of the Board
to consider the matters described in the written notice, an opportunity is
provided to the Executive and his
-3-
counsel to be heard before the Board with respect to the matters described in
the written notice, (4) any resolution or other Board action held with respect
to any deliberation regarding or decision to terminate the Executive for cause
is duly adopted by a vote of a majority of the entire Board of Directors of the
Company at a meeting of the Board called and held and (5) the Executive is
promptly provided with a copy of the resolution or other corporate action taken
with respect to such termination.
No act or failure to act by the Executive shall be considered willful unless
done or omitted to be done by him not in good faith and without reasonable
belief that his action or omission was in the best interests of the Company. The
unwillingness of the Executive to accept any or all of a change in the nature or
scope of his position, authorities or duties, a reduction in his total
compensation or benefits, a relocation that he deems unreasonable in light of
his personal circumstances, or other action by or request of the Company in
respect of his position, authority, or responsibility that he reasonably deems
to be contrary to this Agreement, shall not be considered by the Board of
Directors to be a failure to perform or misconduct by the Executive.
"DISABILITY" or "DISABLED" shall mean the Executive's inability as a result of
any physical or mental incapacity due to injury or sickness to perform each of
his material duties for the Company on a full-time basis for a period of six (6)
months with or without reasonable accommodation.
"EMPLOYMENT PERIOD" shall mean, in the event of a Change in Control, the period
commencing on the effective date for the Change in Control and ending upon the
last day of the month in which occurs the second anniversary of the effective
date for the Change in Control. The preceding is not intended to create any
substantive obligations, duties or rights in addition to or independent of those
set forth elsewhere in this Agreement but is intended to express the current
good faith intentions of the Company and the Executive with respect to
continuing the employment relationship after a Change in Control.
"GOOD REASON" shall mean the Executive shall have the right to terminate his
employment under this Agreement for Good Reason (as hereafter defined) upon
prior written notice to the Company, and receive the payments and benefits set
forth in Section 5.1.2 in which case this Agreement shall terminate on the date
specified in such notice; provided the date of termination specified in the
notice shall be at least thirty (30) days after the delivery of the notice. The
term "Good Reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position (including
status, offices, titles and reporting requirements), authority, duties,
or responsibilities as contemplated by Section 3 of this Agreement,
including any duties inconsistent in any material respect with the
Executive's position, authority, duties or responsibilities with the
Company as an Executive Vice President or any action by the Company
which results in a material diminishment in such position, authority,
duties or responsibilities as in effect immediately before the Change
in Control. For purposes of this Section, any good faith determination
by the Executive that any event set forth in this clause (i) has
occurred above shall be conclusive; or
-4-
(ii) a change in the terms or status (including the rolling
one-year termination date) of this Agreement; or
(iii) a substantial reduction in the Executive's compensation
or benefits; or
(iv) any requirement that the Executive maintain his principal
office other than at the Company's South Carolina facilities at either
0000 Xxxx Xxxxxx, Xxxxxxxx, or the Company's technology center in
Lexington, or spend substantially all of his business time other than
in the aforementioned facilities or their environs such that it would
be reasonably expected that the Executive would need to relocate from
the Columbia metropolitan area; or
(v) a significant increase in the Executive's travel
requirements.
(vi) the determination by the Executive, in his sole
discretion, that, as a result of a Change in Control and a change in
circumstances thereafter significantly affecting his position, he is
unable to exercise the authority and responsibilities attached to his
position and contemplated by Section 3.
"PERSON" shall mean any individual, corporation, bank, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
other entity.
"PROTECTED INFORMATION" shall mean trade secrets, confidential or proprietary
information and all other knowledge, know-how, information, documents or
materials, owned, developed, or possessed by the Company or any of its
subsidiaries or affiliates, whether tangible or intangible form, pertaining to
the Business of the Company or the Business of any of its subsidiaries or
affiliates, including without limitation, research and development operations,
systems, data bases, computer programs, computer software, designs, models,
operating procedures, knowledge of the organization, products (including prices,
costs, sales or content), processes, technical or non-technical data, programs,
methods, techniques, processes, office machinery, contracts, financial data,
financial plans, financial information or measures, business methods, future
business plans, details of consultant contracts, new personnel acquisition
plans, business acquisition plans, customers (including identities of customers
and prospective customers, identities of individual contacts at business
entities which are customers or prospective customers, preferences, businesses
or habits), business relationships and other information owned, developed or
possessed by the Company or its subsidiaries or affiliates, which (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy or confidentiality; provided, however, that Protected Information shall
not include information that is generally known to the public or the trade. Such
information and compilations of information shall be contractually subject to
protection under this Agreement whether or not such information constitutes a
trade secret and is separately protected at law or in equity as a trade secret.
Protected Information does not include protected business information which does
not
-5-
constitute a trade secret under applicable law two years after expiration or
termination of this Agreement.
"VOLUNTARY TERMINATION" shall mean the termination by Executive of Executive's
employment following a Change in Control which is not for Good Reason as defined
above.
3. Duties.
3.1 During the term hereof, the Executive shall serve on a
full-time basis as an Executive Vice President of the Company. In the
Executive's capacity as an Executive Vice President of the Company, he shall
have the authority and management responsibility as is typical of an Executive
Vice President of a company such as this Company, including, without limitation,
those specified in the Company's Bylaws. In addition, the Executive shall have
such more specific responsibilities or duties for the Business, consistent with
the Executive's position as an Executive Vice President as may be reasonably
determined and assigned to the Executive from time-to-time by or upon the
authority of the Board of Directors, or the Chief Executive Officer of the
Company. The Executive shall serve the Company faithfully and to the best of his
ability, devoting substantially all of his business time, attention, knowledge,
energy and skills to the diligent performance of his duties, except for that
time and attention that, consistent with the practices of other senior executive
officers similarly situated, the Executive may devote to civic or community
affairs, other business matters that do not interfere in any material respect
with the performance by the Executive of services required to be performed by
him hereunder, or time devoted to serving as a director of other companies. If
elected, the Executive also shall serve during any part of the Term of this
Agreement as any other officer or a director of the Company or any subsidiary
corporation or parent corporation of the Company without any additional
compensation therefor. Executive agrees that during the Term of this Agreement
he will devote his full time, attention and energies to the diligent performance
of his duties. Company agrees that Executive will be included in and covered by
its standard directors and officers liability insurance coverage.
3.2 Executive shall not, without the prior written consent of
the Company, at any time during the Term hereof (i) accept employment with, or
render services of a business, professional or commercial nature to, any Person
other than the Company, (ii) engage in any venture or activity which the Company
may in good faith consider to be competitive with or adverse to the Business of
the Company or of any affiliate of the Company, whether alone, as a partner, or
as an officer, director, employee or shareholder or otherwise, except that the
ownership of not more than 5% of the stock or other equity interest of any
publicly traded corporation or other entity shall not be deemed a violation of
this Section, or (iii) engage in any venture or activity which the Board of
Directors of the Company may in good faith consider to interfere with
Executive's performance of his duties hereunder. Notwithstanding the foregoing,
Company acknowledges and agrees that Executive's investment and regular
participation in the real estate venture known as Osprey Development, Inc., will
not be considered to violate this Section 3.2.
-6-
4. Term. The parties acknowledge that Executive has provided services
to the Company and received remuneration for such services from the Company
before the commencement date of this Agreement. Unless earlier terminated as
provided herein, the Executive's employment hereunder shall be for a rolling
term of one year (the "Term") commencing on September 30, 1999. This Agreement
shall be deemed to extend each day for an additional day automatically and
without any action on behalf of either party hereto; provided, however, that
either party may, by notice to the other, cause this Agreement to cease to
extend automatically and, upon such notice, the "Term" of this Agreement shall
be the one-year period following the date of such notice, and this Agreement
shall terminate upon the expiration of such Term.
5. Termination. This Agreement may be terminated as follows:
5.1 The Company. The Company shall have the right to terminate
Executive's employment hereunder at any time during the Term hereof (i) for
Cause, (ii) if the Executive becomes Disabled and unable to perform the
essential duties of his position with or without reasonable accommodation, (iii)
upon the Executive's death.
5.1.1 If the Company terminates Executive's
employment under this Agreement pursuant to clauses (i) through (iii) of
Section 5.1. the Company's obligations hereunder shall cease as of the date of
termination; provided, however, if Executive is terminated for Cause after a
Change in Control, then such termination shall be treated as a Voluntary
Termination as contemplated in Section 5.2.1 below.
5.1.2 If the Company terminates Executive other than
pursuant to clauses (i) through (iii) of Section 5.1 and there has been a
Change in Control within the prior twelve (12) months, within 30 days following
the termination date, Executive shall be entitled to receive in a lump sum as
severance upon such termination the payments and benefits listed and described
below (the "Termination Payments"):
(i) the Executive's base salary and all other
benefits due him through the termination date, less applicable
withholding taxes and other authorized payroll deductions;
(ii) the amount equal to the highest annual bonus
paid or payable to the Executive in any of the previous three
(3) fiscal years prior to the fiscal year in which termination
occurs, reduced pro rata for the portion of the fiscal year
not completed as of the end of the month in which termination
occurs; provided, however, that if the Executive has deferred
his award for such year, the payment due the Executive under
this paragraph (ii) shall be paid in accordance with the terms
of the deferral; and
-7-
(iii) a lump sum severance allowance in an amount
which is equal to the sum of the amounts determined in
accordance with the following subparagraphs (a) and (b):
(a) twice his annual base salary at the
rate in effect immediately prior to termination; and
(b) twice an amount equivalent to the
highest amount of the annual incentive compensation,
including annual bonus, received or deferred by the
Executive for the three (3) fiscal years immediately
prior to the fiscal year in which termination occurs.
If the Executive has not been entitled to a bonus for
any of such 3 years, his annual bonus will be at
least equal to his target bonus to be used for
purposes of the calculation in this Section for the
year in which the employment period commences.
(iv) the Company shall pay, distribute, and otherwise
provide to the Executive the amount and value of his entire
plan account and interest under any investment plan or stock
plans, and all employer contributions made or payable to any
such plans for his account prior to the end of the month in
which termination occurs shall be deemed vested and payable to
him. Such payment or distribution shall be in accordance with
the elections made by the Executive in respect of
distributions in accordance with the plan as if the
Executive's employment in the Company terminated at the end of
the month in which termination occurs. Any such election made
by the Executive is by this reference incorporated into this
Agreement with the same force and effect as if fully set
herein and shall be made on such forms or instruments as may
be adopted and made available from time to time to the
Executive under the plan(s) in which he participates.
(v) during a period of one year, the Company shall
pay the Executive pursuant to the terms of any long-term
incentive performance plan in which he was participating at
the time of termination as if he continued to be a participant
in the plan during that period, and if pursuant to the terms
of such plan no distributions therefrom become vested until
after the expiration of the Term of employment, then whenever
distributions thereunder become vested, the Company shall pay
the Executive the amount or other distribution to which he
would have been entitled had his participation in the plan
continued until the time distributions become vested and are
made pursuant to the plan.
(vi) for a period of one year from the date of
termination, the Executive shall continue to be deemed and
treated as if he were an eligible employee under the
provisions of all stock option, stock appreciation right,
restricted stock, and other incentive compensation plans of
the Company under which he held options or awards, or in which
he participated at the time of termination, and he may
-8-
exercise options and rights as a fully vested shareholder, and
shall receive payments and distributions accordingly.
(vii) for a period of two years from the date of
termination, the Executive shall continue to participate in
and be entitled to all benefits and credited service for
benefits under the benefit plans, programs and arrangements
described in Section 6.7 as if he remained employed by the
Company at the compensation levels referred to in this Section
during such period, exclusive however of disability benefits.
Contributions and deductions for investment and stock plans by
the Company cease as of the last date worked.
(viii) upon the expiration of the period of one year
from the date of termination, the Executive shall be deemed to
have retired from the Company and he shall be entitled at that
time, or at such later time as he may elect in order to avoid
or minimize any applicable early pension reduction provision,
to commence to receive the total combined qualified and
non-qualified retirement benefit to which he is entitled
hereunder, or his total non-qualified retirement benefit
hereunder if under the terms of the Company's qualified
retirement plan for salaried employees he is not entitled to a
qualified benefit.
(ix) if termination occurs after a reduction (which
reduction occurs after the effective date of a Change in
Control) in all or any part of the Executive's total
compensation or benefits, the monthly severance allowance and
other compensation and benefits payable to him pursuant to
this Section shall be based upon his compensation and benefits
before the reduction.
(x) if any provision of this Section cannot, in whole
or in part, be implemented and carried out under the terms of
the applicable compensation, benefit, or other plan or
arrangement of the Company because the Executive has ceased to
be an actual employee of the Company, because he has
insufficient or reduced credited service based upon his actual
employment by the Company, because the plan or arrangement has
been terminated or amended after the effective date of this
Agreement, or for any other reason, the Company itself shall
pay or otherwise provide the equivalent of such rights,
benefits and credits for such benefits to the Executive, his
dependents, beneficiaries and estate. Such payments shall be
made by the Company in a lump sum within sixty (60) days of
the Company's determination that such payments and credits are
due.
(xi) the Company's obligation under this Section to
continue to pay or provide health care and life and accident
insurance to the Executive during a period of two years shall
be reduced when and to the extent any of such benefits are
paid or provided to the Executive by another employer,
provided that the Executive
-9-
shall have all rights afforded to retirees to convert group
insurance coverage to individual insurance coverage as to the
extent of, and whenever his group insurance coverage under
this Section is reduced or expires. Apart from this paragraph
(xi), the Executive shall have and be subject to no obligation
to mitigate.
(xii) the Company shall deduct applicable withholding
taxes in performing its obligations under this Section.
Nothing in this Section 5.1.2 is intended, or shall be
deemed or interpreted, to be an amendment to any compensation, benefit, or other
plan of the Company. To the extent the Company's obligations under this Section
include the performance of the Company's obligations to the Executive under any
such plan or under another agreement between the Company and the Executive, the
Company need only perform once, and to the extent this Agreement requires
duplicative performance by the Company, the rights of the Executive under this
Agreement, are discharged, surrendered, or released pro tanto, it being the
intention of the parties that any benefits payable or to be paid to the
Executive pursuant to this Agreement be paid only one time.
5.1.3 If the Company terminates Executive other than
pursuant to clauses (i) through (iii) of Section 5.1 and in the absence of a
Change in Control, Executive shall be entitled to receive immediately in a lump
sum as severance upon such termination, the compensation and benefits provided
in Section 6 hereof for the remaining Term of this Agreement.
5.1.4 If the Company terminates Executive other than
pursuant to clauses (i) through (iii) of Section 5.1 and in the absence of a
Change of Control, (A) all rights of Executive pursuant to awards of share
grants or options granted by the Company shall be deemed to have vested and
shall be released from all conditions and restrictions, except for restrictions
on transfer pursuant to the Securities Act of 1933, as amended, and (B) the
Executive shall be deemed to be credited with service with the Company for such
remaining Term for the purposes of the Company's benefit plans.
5.2 By Executive. Executive shall have the right to terminate
his employment hereunder if (i) there is a Voluntary Termination; (ii) the
Company materially breaches this Agreement and such breach is not cured within
30 days after written notice of such breach is given by Executive to the Bank;
or (iii) there is a termination for Good Reason. If the Executive elects to
terminate his employment pursuant to this Section, Executive must do so within
twelve (12) months of a Change in Control.
5.2.1 If Executive terminates his employment pursuant
to clause (i) of Section 5.2, the Company's obligations under this Agreement
shall cease as of the date of such termination.
-10-
5.2.2 If, within twelve (12) months following a Change
in Control, Executive terminates his employment hereunder pursuant to any of
clauses (ii) or (iii) of Section 5.2. Executive shall be entitled to receive
immediately in a lump sum as severance the Termination Payments provided in
Section 5.1.2.
5.2.3 In addition, in the event of such termination
pursuant to clauses (ii) or (iii) of this Section 5.2 absent a Change in
Control, (A) all rights of Executive pursuant to awards of share grants or
options granted by the Company shall be deemed to have vested and shall be
released from all conditions and restrictions, except for restrictions on
transfer pursuant to the Securities Act of 1933, as amended, and (B) the
Executive shall be deemed to be credited with service with the Company for such
remaining Term for the purposes of the Company's benefit plans. Executive shall
be entitled to receive immediately in a lump sum as severance, upon such
termination, the compensation and benefits provided in Section 6 hereof for the
remaining Term of this Agreement.
5.2.4 In the event Executive terminates his employment
for any reason other than as specified in clauses (i), (ii), or (iii) above
(including a voluntary termination in the absence of a Change in Control), the
Company's obligation under this Agreement shall cease as of the date of such
termination.
6. Compensation. In consideration of Executive's services and covenants
hereunder, Company shall pay to Executive the compensation and benefits
described below (which compensation shall be paid in accordance with the normal
compensation practices of the Company and shall be subject to such deductions
and withholdings as are required by law or policies of the Company in effect
from time to time, provided that his salary pursuant to Section 6.1 shall be
payable not less frequently than monthly):
6.1 Annual-Salary. During the Term hereof, the Company shall
pay to Executive a salary at the rate of $180,000 per annum. Executive's salary
will be reviewed by the Board of Directors of the Company at the beginning of
each of its fiscal years and, in the sole discretion of the Board of Directors,
may be increased for such year. For purposes of computing the portion of
severance benefits under Section 5 based upon the Executive's salary, the
Executive's salary shall be his salary on the date of termination, excluding the
Annual Incentive Bonus as provided in Section 6.2.
6.2 Annual Incentive Bonus. During the Term hereof, the Board
of Directors may pay to Executive an annual incentive cash bonus in accordance
with the terms of the Short Term Incentive Compensation Plan. Executive will be
eligible to participate in the Short Term Incentive Compensation Plan for 1998
on a pro-rata basis determined by Executive's actual period of employment with
Company during 1998. Executive will be entitled to his actual bonus if greater
than $50,000 but in no case shall his bonus be less than a minimum of $50,000
under the Short Term Incentive Compensation Plan for 1999 provided that
Executive remains employed by Company for the entire 1999 calendar year.
-11-
6.3 Long Term Incentive Compensation Plan. During the Term
hereof, the Board of Directors shall grant Executive options to purchase Company
Common Stock and restricted stock in accordance with the terms of the Company's
Long Term Incentive Compensation Plan.
6.4 Stock Options. The parties acknowledge that the Company
has granted to Executive an irrevocable option to purchase 25,000 shares of
common stock at the closing price for such common stock on the first trading day
of the 1999 calendar year in which the Executive is fully vested.
6.5 Other Benefits. Executive shall be entitled to share in
any other employee benefits generally provided by the Company to its most highly
ranking executives for so long as the Company provides such benefits. The
Company also agrees to provide Executive a monthly automobile allowance of
$1,000, grossed up for income and employment withholding taxes, plus
reimbursement for insurance, gasoline, and maintenance expenses for the
automobile that is primarily used by Executive for business purposes. Company
also agrees to provide Executive a $1,000,000 life insurance policy under the
Company's split dollar life insurance program. Executive shall also be entitled
to participate in all other benefits accorded general Company employees.
7. Gross-Up of Termination Payments. It is the intention of the parties
that (i) the net amount of all Termination Payments provided under Section 5.1.2
retained by the Executive after deduction for and payment of all applicable
federal, state and local taxes (the "Withholding Taxes") payable by or on behalf
of the Executive shall be equal to the gross amount of the Termination Payments
without regard to any such deductions or payments (the "Net Termination
Payments") and (ii) the net amount of all other payments or benefits received or
to be received by the Executive from the Company or one of its benefit plans as
a direct or indirect result of or in connection with a Change in Control or in
connection with Termination within one year of a change in Control, from
whatever source other than a Termination Payment (the "Other Payments"), that
are or become subject to the tax (the"Excise Tax") imposed by Section 4999 of
the Internal Revenue code of 1986 or any successor statute, rule or regulation
of similar effect (the "Code"), shall be equal to the gross amount of the Other
Payments without regard to deduction or payment or any such Excise Tax.
Accordingly, the Termination Payments otherwise payable hereunder shall be
increased by an amount of cash (the "Withholding Gross-Up Payment") equal to all
Withholding Taxes payable by or on behalf of the Executive in respect of the
Termination Payments, including any Withholding Taxes as may be due in respect
of such additional amounts to be paid pursuant to this sentence as will result
in the Executive actually retaining an amount equal to the Net Termination
Payments. In addition, if the sum of the Termination Payments, the Withholding
Gross Up Payment and the Other Payments (the "Total Payments") are or become
subject to the Excise Tax, the Company shall pay the Executive within 30 days of
the Termination Date an additional cash amount (the "Excise Gross-Up Payment")
such that the net amount actually retained by the Executive, after deduction for
or payment of any Excise Tax on the Total
-12-
Payments and the sum of any Withholding Taxes upon the payment provided by this
sentence shall be equal to the Total Payments (the "Net Total Payments"). For
the purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax, the following shall apply:
(a) all "excess parachute payments" within the meaning of
Section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax,
unless, in the opinion of tax counsel selected by the Company's independent
auditors and acceptable to the Executive, such other payments or benefits (in
whole or in part) described in clause (a) above do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code;
(b) the amount of the Termination Payments which shall be
treated as subject to the Excise Tax shall be equal to the lesser of:
(i) the total amount of the Termination Payments; and
(ii) the amount of excess parachute payments within
the meaning of Sections 280G(b)(1) and (4) (after applying
clauses (a) and (b) above).
(c) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code; and
(d) the Executive shall be deemed to pay federal income taxes,
and state and local income taxes in the state and locality of the Executive's
residence on the date of Termination, at the highest marginal rate of income
taxation in effect in the calendar year in which the Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local income taxes.
Provided, that in the event the Excise Tax or Withholding
Taxes are subsequently determined to be less than the amounts taken into account
hereunder at the time of the payment of the Withholding Gross Up Payments or the
Excise Tax Gross Up Payment, the Executive shall repay the Company the portion
of such payments attributable to such reduction, or in the event that the Excise
Tax or the Withholding Taxes are subsequently determined to exceed the amount
taken into account hereunder at the time of the payment of the Withholding Gross
Up Payment or the Excise Tax Gross Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of
such payments), to make the Executive whole, the Company shall make an
additional gross-up payment in respect of such excess. Payment shall be made
within 30 days after the final determination of the amount of the reduction or
excess, as the
-13-
case may be, together with interest thereon at the rate provided in Section
1274(b)(2)(B) of the Code.
8. Confidentiality. Executive acknowledges that, prior to and during
the term of this Agreement, the Company has furnished and will furnish to
Executive Protected Information which could be used by Executive on behalf of a
competitor of the Company to the Company's substantial detriment. In view of the
foregoing, Executive acknowledges and agrees that the restrictive covenants
contained in this Section are reasonably necessary to protect the Company's
legitimate business interests and goodwill. Executive agrees that he shall
protect the Company's Protected Information and shall not disclose to any
Person, or otherwise use, except in connection with his duties performed in
accordance with this Agreement, any Protected Information; provided, however,
that Executive may make disclosures required by a valid order or subpoena issued
by a court or administrative agency of competent jurisdiction, in which event
Executive will promptly notify the Company of such order or subpoena to provide
the Company an opportunity to protect its interests. Upon the termination or
expiration of his employment hereunder, the Executive agrees to deliver promptly
to the Company all Company files, customer lists, management reports, memoranda,
research, Company forms, financial data and reports and other documents supplied
to or created by him in connection with his employment hereunder (including all
copies of the foregoing) in his possession or control and all of the Company's
equipment and other materials in his possession or control.
9. Noncompetition. In the event that Executive's employment with the
Company is terminated before a Change in Control voluntarily by the Executive or
by the Board of Directors pursuant to clause (i) of Section 5.1, then Executive
shall not, for a period of one year following such termination of employment (i)
become employed by any insured depository institution which is headquartered in
the State of South Carolina, or (ii) attempt to interfere with any business
relationship of the Company, including without limitation, employee and customer
relationships. In the event that Executive's employment is terminated for any
reason following a Change in Control (whether by the Company or Executive), it
is expressly acknowledged that there shall be no limitation on any activity of
Executive, including direct competition with the Company or its successor, and
Company shall not be entitled to injunctive relief with respect to any such
activities of Executive.
The Executive acknowledges that the services to be rendered by the
Executive are special, unique and of extraordinary character and, in connection
with such services, the Executive will have access to Protected Information
vital to the Company's Business and the Business of its subsidiaries and
affiliates. By reason of this, the Executive consents and agrees that if the
Executive violates any provisions of Section 9, hereof, the Company could
sustain irreparable injury that money damages will not provide adequate remedy
to the Company and that the Company shall be entitled to have Section 9
specifically enforced by any court having equity jurisdiction. Nothing contained
herein shall be construed as prohibiting the Company and any of
-14-
its subsidiaries or affiliates from pursuing any other remedies available to it
for such breach or threatened breach, including the recovery of damages from the
Executive.
10. Assignment. The parties acknowledge that this Agreement has been
entered into due to, among other things, the special skills of Executive, and
agree that this Agreement may not be assigned or transferred by either party, in
whole or in part, without the prior written consent of the other.
11. Notices. All notices, requests, demands, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or seven days after mailing if mailed, first class,
certified mail postage prepaid:
To the Bank: Carolina First Bank
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chairman of the Board
To Executive: Mr. Xxxx XxXxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy mailed to Executive:
c/o Carolina First Bank
Xxxx Xxxxxx Xxx 00000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Any party may change the address to which notices, requests, demands,
and other communications shall be delivered or mailed by giving notice thereof
to the other party in the same manner provided herein.
12. Provisions Severable. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
13. Remedies in the Absence of a Change in Control. The terms of this
Section 13 will apply in the absence of a Change in Control.
The Executive acknowledges that if he breaches or threatens to breach
his covenants and agreements in this Agreement, such actions may cause
irreparable harm and damage to the
-15-
Company which could not be compensated in damages. Accordingly, if Executive
breaches or threatens to breach this Agreement, the Company shall be entitled to
injunctive relief, in addition to any other rights or remedies of the Company.
All claims, disputes and other matters in question between the
Executive and the Company arising out of or related to the interpretation of
this Agreement or the breach of this Agreement, except as specifically governed
by the foregoing provisions where there may be irreparable harm and damage to
the Company which could not be compensated in damages, shall be decided by a
three (3) person arbitration panel in accordance with the commercial rules of
the American Arbitration Association. This agreement to arbitrate shall be
specifically enforceable under applicable law in any court having jurisdiction.
The award rendered by the arbitrator shall be final and judgment may be entered
upon it in accordance with the applicable law of any court having jurisdiction
thereof.
In the event that Executive is reasonably required to engage legal
counsel to enforce his rights hereunder against the Company, Executive shall be
entitled to receive from the Company his reasonable attorneys' fees and costs;
provided that Executive shall not be entitled to receive those fees and costs
related to matters, if any, which were the subject of litigation and with
respect to which a judgment is rendered against Executive.
14. Remedies in the Event of a Change in Control. The terms of this
Section 14 shall apply in the event of a Change in Control.
The Executive acknowledges that if he breaches or threatens to breach
his covenants and agreements in this Agreement, such actions may cause
irreparable harm and damage to the Company which could not be compensated in
damages. Accordingly, if Executive breaches or threatens to breach this
Agreement, the Company shall be entitled to injunctive relief, in addition to
any other rights or remedies of the Company. All claims, disputes and other
matters in question between the Executive and the Company arising out of or
related to the interpretation of this Agreement or the breach of this Agreement
shall be decided under and governed by the laws of the State of South Carolina.
The Company is aware that upon the occurrence of a Change in Control,
the Board of Directors or a stockholder of the Company may then cause or attempt
to cause the Company to refuse to comply with its obligations under this
Agreement, or may cause or attempt to cause the Company to institute, or may
institute, litigation seeking to have this Agreement declared unenforceable, or
may take, or attempt to take, other action to deny the Executive the benefits
intended under this Agreement. In these circumstances, the purpose of this
Agreement could be frustrated. It is the intent of the parties that the
Executive not be required to incur the legal fees and expenses associated with
the protection or enforcement of his rights under this Agreement by litigation
or other legal action because such costs would substantially detract from the
benefits intended to be extended to the Executive hereunder, nor be bound to
negotiate any settlement of his rights hereunder under threat of incurring such
costs. Accordingly, if at any time after the Effective Date, it should appear to
the Executive that the Company is or has acted contrary to or
-16-
is failing or has failed to comply with any of its obligations under this
Agreement for the reason that it regards this Agreement to be void or
unenforceable or for any other reason, or that the Company has purported to
terminate his employment for cause or is in the course of doing so in either
case contrary to this Agreement, or in the event that the Company or any other
person takes any action to declare this Agreement void or unenforceable, or
institutes any litigation or other legal action designed to deny, diminish or to
recover from the Executive the benefits provided or intended to be provided to
him hereunder, and the Executive has acted in good faith to perform his
obligations under this Agreement, the Company irrevocably authorizes the
Executive from time to time to retain counsel of his choice at the expense of
the Company to represent him in connection with the protection and enforcement
of his rights hereunder, including without limitation representation in
connection with termination of his employment contrary to this Agreement or with
the initiation or defense of any litigation or other legal action, whether by or
against the Executive or the Company or any director, officer, stockholder or
other person affiliated with the Company, in any jurisdiction. The reasonable
fees and expenses of counsel selected from time to time by the Executive as
herein above provided shall be paid or reimbursed to the Executive by the
Company on a regular, periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in accordance with its
customary practices. Counsel so retained by the Executive may be counsel
representing other officers or key executives of the Company in connection with
the protection and enforcement of their rights under similar agreements between
them and the Company, and, unless in his sole judgment use of common counsel
could be prejudicial to him or would not be likely to reduce the fees and
expenses chargeable hereunder to the Company, the Executive agrees to use his
best efforts to agree with such other officers or executives to retain common
counsel.
15. Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
16. Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by other parties hereto.
17. Governing Law. The validity and effect of this agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of South Carolina.
18. Merger. This Agreement supersedes all previous agreements, whether
written or oral, and all prior negotiations and agreements are merged into this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
EXECUTIVE
-17-
Xxxx XxXxxx
CAROLINA FIRST BANK
By: ________________________________
Xxxx X. Xxxxxxx, Xx.
President
-18-
