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EXHIBIT 10.17
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
DATED AUGUST 10, 1999
BETWEEN BLACK DIAMOND SAVINGS BANK, F.S.B. AND XXX X. XXXXX
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EXHIBIT 10.17
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Agreement, made and entered into as of the 10th day of August, 1999,
by and between BLACK DIAMOND SAVINGS BANK, F.S.B. (the "Bank"), and XXX X. XXXXX
(the "Employee").
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Reorganization and Merger
dated as of May 28, 1999 by and among FNB Financial Services Corporation
("FNB"), FNB Acquisition Sub, F.S.B., and the Bank (the "Merger Agreement"), FNB
has agreed to acquire the Bank on the terms and conditions set forth in the
Merger Agreement;
WHEREAS, Employee is an executive of the Bank; owns shares of capital
stock of the Bank; holds options to purchase 55,000 shares of the common stock
of the Bank at $13.27 per share (which options, pursuant to the terms of the
Merger Agreement, are being converted into options to purchase 73,332 shares of
the common stock of FNB at $9.95 per share); and is intended to receive
substantial value in the transactions contemplated by the Merger Agreement;
WHEREAS, Employee's agreement to be bound by the terms and
considerations of this Agreement (and in particular its non-competition
provisions) was a material inducement for FNB to enter into, and is a condition
to FNB obligations under the Merger Agreement;
WHEREAS, in connection with the consummation of the transactions
contemplated by the Merger Agreement, the Bank desires to employ Employee and
Employee desires to accept such employment on the terms set forth below; and
WHEREAS, Employee and the Bank originally entered into this Agreement
on May 28, 1999, and are now amending and restating this Agreement at the
request of the Office of Thrift Supervision.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Employment. The Bank hereby employs the Employee, and the Employee
hereby accepts employment with the Bank, for the term set forth in Section 2
below, in the position and with the duties and responsibilities set forth in
Section 3 below, and upon the other terms and conditions hereinafter stated.
2. Term. Unless sooner or otherwise terminated as provided in this
Agreement, the initial term of this Agreement and Employee's employment with the
Bank hereunder shall be for a period commencing on the Effective Time of the
Merger (as defined in the Merger Agreement) and continuing for a period of three
(3) years. This Agreement shall be renewed for a period of one (1) year after
the initial term, and after each renewal term thereafter, subject to the
approval of the Bank's Board of Directors after completion of a satisfactory
review of the Employee's performance during the initial term or the preceding
renewal term, as applicable.
3. Duties; Position. The Employee is engaged as President and Chief
Executive Officer of the Bank. The Employee shall be responsible for such duties
as are commensurate with his office that may from time to time be assigned to
the Employee by the Bank's Board of Directors.
4. Compensation. In consideration of the services to be rendered by the
Employee to the Bank and in consideration of the Employee's other covenants
hereunder, the Employee will receive an initial annual base salary of $164,500
(such salary as it may be increased from time to time hereafter referred to as
"Base Salary"), payable at such intervals as may be established by the Bank from
time to time for salary payments to its senior management employees. The
Employee shall receive such increases in his Base Salary as the Board of
Directors of the Bank
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may from time to time approve in its discretion, provided, however, that the
Employee's Base Salary will be reviewed not less often than annually. The
Employee shall also be eligible to receive such bonuses as the Board of
Directors may, in its discretion, deem appropriate from time to time.
5. Annual Management Incentive Compensation. The Employee shall be
entitled to participate in the annual management incentive plans maintained by
the Bank as they exist from time to time. The Board of Directors of the Bank
will undertake to review Black Diamond's current plans in consultation with the
Employee with a view to establishing meaningful and realistic goals and
objectives.
6. Employee Benefits. The Employee will be entitled to participate, in
accordance with the provisions thereof, in any employee benefit plans and
programs made available by the Bank to its employees generally in accordance
with the terms of such plans and programs.
7. Additional Benefits. In addition to normal employee benefits, the
Bank will provide to the Employee the following:
(a) An automobile for the Employee's exclusive use for
business purposes. The Bank will maintain the automobile in good condition at
Bank expense, subject to the normal wear and tear inflicted by the normal use
and operation thereof by the Employee.
(b) The Employee will be eligible to participate and receive
tax favored incentive stock options under the FNB "Omnibus Equity Compensation
Plan," with options to be granted at such time or times as determined by the
Board of Directors.
8. Business Expense Reimbursements. During the period of his employment
under this Agreement, the Employee will be entitled to reimbursement for all
reasonable out-of-pocket expenses incurred by him in performing his duties
hereunder upon presentation by the Employee,
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from time to time, of an itemized account of such expenses and appropriate
documentation therefor.
9. Termination of Employment.
(a) Death or Disability. In the event of the death or
disability of the Employee during his employment under this Agreement, the
Employee's employment and his compensation hereunder shall terminate
immediately. Any other rights and benefits the Employee, his estate or any other
person may have under employee benefit plans and programs of the Bank in the
event of the Employee's death or disability shall be determined in accordance
with the terms of such plans and programs. For purposes of this Agreement,
"disability" shall mean the inability, by reason of bodily injury or physical or
mental disease, or any combination thereof, of the Employee to perform his
customary or other comparable duties with the Bank for a period of more than 90
consecutive days. In the event the parties are unable to agree as to whether the
Employee is suffering a disability, the Employee and the Bank shall each select
a physician and the two physicians so chosen shall make the determination or, if
they are unable to agree, they shall select a third physician, and the
determination as to whether the Employee is suffering a disability shall be
based upon the determination of a majority of the three physicians.
(b) Termination for Cause. Nothing herein shall prevent the
Bank from terminating the Employee's employment at any time for Cause (as
hereinafter defined). Upon termination for Cause, the Employee shall receive his
Base Salary only through the date of termination, and neither the Employee nor
any other person shall be entitled to any further payments from the Bank, for
salary, unpaid bonuses or any other amounts. Any rights and benefits the
Employee may have under employee benefit plans and programs of the Bank
generally following a termination of the Employee's employment for Cause shall
be determined
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in accordance with the terms of such plans and programs. For purposes of this
Agreement, termination for Cause shall mean termination due to (i) incompetence;
(ii) willful misconduct; (iii) breach of fiduciary duty involving personal
profit; (iv) a willful and intentional act of the Employee which constitutes a
breach of the Employee's fiduciary duty to the Bank and which is also intended
to injure the reputation, business or business relationship of the Bank, its
officers, directors, shareholders, employees or customers; (v) any material
breach of any provision contained in this Agreement by the Employee; (vi)
repeated failure, neglect or refusal by the Employee to perform his duties
hereunder after the Employee has received express, written notice from the Bank
identifying duties that he has failed, neglected or refused to perform; (vii)
continued insubordination after receipt of a written warning with respect
thereto; or (viii) commission by the Employee of any act, or any failure by the
Employee to act involving, serious criminal conduct, or personal dishonesty,
moral turpitude or willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order
applicable to, or reflecting negatively upon, business or affairs of the Bank.
(c) Termination Other Than For Cause. The Bank may terminate
the Employee's employment under this Agreement at any time upon written notice
to the Employee for whatever reason it deems appropriate, or for no reason. The
Employee may terminate his employment under this Agreement at any time upon
written notice to FNB if the Employee is required to change his residence or
principal place of business more than 25 miles from his principal place of
business as of the Effective Time of the Merger (as defined in the Merger
Agreement). In the event such termination by the Bank is not due to disability
as provided in Section 9 (a) above or for Cause as provided in Section 9 (b)
above, or in the event of termination by the Employee as provided in this
Section 9(c), the Employee shall be entitled to
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be paid as severance pay the amount equal to his one year (annual) salary at the
time of such termination, the cost of his hospital-medical insurance for one
year and his 401(k) contribution for one year if any 401(k) contributions are
made for that year for other employees. The Bank shall pay the amount of the
annual salary to the Employee in equal semi-monthly installments, commencing
upon the Employee's termination or dismissal.
(d) Termination Other Than for Cause Following a Change in
Control. The Employee may terminate his employment immediately upon written
notice to FNB upon the occurrence, within twelve (12) months following a "change
in control" of FNB, of any one of the following events: (i) he is not offered a
position with the Bank, its successor or the person or entity effecting the
change of control at not less than his then Base Salary and with generally
comparable benefits, or (ii) the Employee is required to change his residence or
principal place of business more than 25 miles from his principal place of
business immediately prior to the change in control. If the Employee's
employment is terminated pursuant to this Section 9(d) or if the Employee's
employment is terminated by the Bank pursuant to Section 9(c) following a change
in control, the Employee shall be entitled to receive his Base Salary, payable
in accordance with Section 4 hereof, for a two-year period.
For purposes of this Section 9(d), a "change in control" shall be
deemed to have occurred upon the occurrence of any of the following events:
(i) Any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") but excluding any employee benefit plan of FNB) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of FNB representing 50% or more of
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the combined voting power of FNB's outstanding securities then entitled
ordinarily (and apart from rights accruing under special circumstances) to vote
for the election of directors; or
(ii) Individuals who are "Continuing Directors" (as
hereinafter defined) cease for any reason to constitute at least a majority of
the Board of Directors; or
(iii) The Board of Directors shall approve a sale of
all or substantially all of the assets of FNB; or
(iv) The Board of Directors shall approve the merger,
consolidation, or like business combination or reorganization of FNB, the
consummation of which would result in the occurrence of any event described in
clause (i) or (ii) above.
For purposes of the foregoing, "Continuing Directors" shall mean (i)
the directors of FNB in office on the date hereof and (ii) any successor to any
such director (and any additional director) who after the date hereof (y) was
nominated or selected by a majority of the Continuing Directors in office at the
time of his nomination or selection and (z) who is not an "affiliate" or
"associate" (as defined in Regulation 12B under the Exchange Act) or any person
who is the beneficial owner, directly or indirectly, of securities representing
50% or more of the combined voting power of FNB's outstanding securities then
entitled ordinarily to vote for the election of directors.
10. Covenants Not To Compete.
(a) The Employee hereby promises and agrees that during the
term of this Agreement and for a period of one year following the termination of
his employment with the Bank:
(i) He will not, directly or indirectly, own any
interest in, manage, operate, control, be employed by, render
consulting or advisory services to, or participate
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in or be connected with the management or control of any business that
is then engaged in the operation of a banking institution (or any
competitive institution then competing with the Bank) in the Territory
(as hereafter defined);
(ii) He will not, directly or indirectly, influence
or attempt to influence any customer of the Bank to discontinue its use
of the Bank's services or to divert such business to any other person,
firm or corporation; and
(iii) He will not, directly or indirectly, solicit
any employee of the Bank, whose base annual salary at the time of the
Employee's termination was $30,000 or more, to work for any other
person, firm or corporation.
(b) It is the desire and intent of the parties that the
provisions of Section 10 (a) shall be enforced to the fullest extent permitted
under the laws and public policies of each jurisdiction in which enforcement is
sought. Accordingly, if any particular portion of Section 10 (a) shall be
adjudicated to be invalid or unenforceable, such adjudication shall apply only
with respect to the operation of that portion in the particular jurisdiction in
which such adjudication is made, and all other portions shall continue in full
force and effect.
(c) It is expressly agreed that the provisions and covenants
in this Section 10 shall not apply and shall be of no force or effect in the
event that the Bank fails to honor its obligations hereunder.
(d) For purposes of this Section 10, the "Territory" shall
mean a radius of 25 miles from any location in which the Bank or any subsidiary
of the Bank is operating a financial institution.
11. Injunctive Relief. The Employee and the Bank acknowledge and agree
that either party would suffer irreparable injury in the event of a breach of
any of the provisions of Section
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10 of this Agreement and that either party shall be entitled to an injunction
restraining from any breach or threatened breach thereof. Nothing herein shall
be construed, however, as prohibiting either party from pursuing any other
remedies at law or in equity which it may have for any such breach or threatened
breach of any provisions of Section 10 hereof, including the recovery of damages
to either party.
12. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Employee and his personal representatives,
estate and heirs and to the Bank and its successors and assigns, including
without limitation any corporation or other entity to which the Bank may
transfer all or substantially all of its assets and business (by operation of
law or otherwise) and to which the Bank may assign this Agreement (Subject to
the provisions of Section 9 and any additional provisions of this contract as
applicable). The Employee may not assign this Agreement or any part hereof
without the prior written consent of the Bank, which consent may be withheld by
the Bank for any reason it deems appropriate.
13. Entire Agreement. This Agreement, together with any agreements and
similar documents entered into between the Bank and the Employee under any stock
option, stock compensation or similar employee benefit plans maintained by the
Bank, and together with that certain Amended Deferred Compensation Agreement
between the Bank and the Employee dated June 1, 1995 (the "Deferred Compensation
Agreement"), contains the entire agreement of the parties with respect to the
employment of the Employee by the Bank and supersedes and replaces all other
understandings and agreements, whether oral or in writing, if any, previously
entered into by the parties with respect to such employment. This Agreement
shall not be deemed to terminate or otherwise modify or amend the Deferred
Compensation Agreement, and the
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Deferred Compensation Agreement shall not be amended or terminated without
Employee's consent.
14. Amendment; Waiver. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by the Employee, by a duly authorized officer of the Bank,
and by a duly authorized officer of FNB. No waiver by either party of any breach
by the other party of any provision of this Agreement shall be deemed a waiver
of any other breach.
15. Notices. All notices or other communications given pursuant to this
Agreement shall be in writing and either delivered personally or by prepaid
registered or certified mail, return receipt requested. Notices and other
communications mailed to the Employee shall be addressed to his last address as
shown on the personnel records of the Bank, and notices and other communications
to the Bank shall be addressed to FNB Financial Services Corporation, P. O. Xxx
0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attn: President. Either party may
change the address to which notices are to be mailed pursuant to this Section
15, by written notice given in accordance herewith. Any notice pursuant to this
Section 15 shall be effective for all purposes on the date delivered or mailed
as herein provided.
16. Severability. If any one or more of the provisions contained in
this Agreement shall be invalid, illegal, or unenforceable in any respect under
any applicable law, the validity, legality and enforceability of the remaining
provision shall not in any way be affected or impaired thereby.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws and judicial decisions of the State of North Carolina.
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18. Compliance with Applicable Banking Laws.
(a) If any of the provisions of this Agreement conflict with
12 C.F.R. ss. 563.39, the latter shall prevail.
(b) If the Employee is suspended and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA") (12
U.S.C. 1818 (e)(3) and (g)(1)) the Bank's obligations under this Agreement shall
be suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion (i)
pay the Employee all or part of the compensation withheld while its contract
obligations were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
(c) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. 1818(e)(4) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.
(d) If the Bank is in default (as defined in section 3(x)(1)
of the FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this Section 18(d) shall not affect any vested rights of
the contracting parties.
(e) All obligations under this Agreement shall be terminated,
except to the extent it is determined that continuation of this Agreement is
necessary to the continued operation of the Bank:
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(i) by the Director of the Office of Thrift
Supervision (the "Director") or his or her designee, at the time the Federal
Deposit Insurance Corporation or Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in 13(c) of the FDIA; or
(ii) by the Director or his or her designee, at the
time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not
be affected by such action.
(f) Any payments made to Employee pursuant to this Agreement,
or otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. ss. 1828(k) and any regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
BLACK DIAMOND SAVINGS BANK, F.S.B.
By: /s/ Xxxxxx Xxxxxx
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/s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
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