Exhibit 10.3
FOUR OAKS BANK & TRUST COMPANY
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is
entered into as of this 11th day of December, 2008 by and between FOUR OAKS BANK
& TRUST COMPANY, a North Carolina banking corporation (the "Bank"), and XXXXX X.
XXXX ("Employee").
W I T N E S S E T H :
WHEREAS, the Bank and Employee are parties to an Executive Employment
Agreement dated January 26, 1995 ("Employment Agreement") and a Severance
Compensation Agreement dated January 26, 1995 ("Severance Compensation
Agreement"); and
WHEREAS, the Bank and Employee desire to amend and restate the Employment
Agreement as provided herein to incorporate the substantive provisions of the
Severance Compensation Agreement and to make certain other revisions and to
terminate the Severance Compensation Agreement; and
WHEREAS, the Bank desires that Employee continue as an Employee of the Bank
and continue to serve as Executive Vice President, Chief Financial Officer; and
WHEREAS, Employee desires to continue to be an employee of the Bank and to
continue to serve as Executive Vice President, Chief Financial Officer;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants contained in this Agreement, the Bank and Employee agree as follows:
1. Employment. Employee shall serve the Bank as Executive Vice President,
Chief Financial Officer with such duties, responsibilities and authorities of
such office as may be assigned to her and as are customarily associated with
such office.
2. Term. The original term of this Agreement shall be for the one year
period commencing on the date of this Agreement and terminating one year later,
unless earlier terminated as set forth in this Agreement. Upon the expiration of
the original term or any extension term, the term of this Agreement shall be
automatically extended for an additional period of one (1) year unless such
automatic extension is declined by either party by written notice given to the
other party not less than ninety (90) days before the end of the then current
term of this Agreement. During any extension term, all terms and provisions of
this Agreement shall be applicable and in full force.
3. Compensation and Benefits. In consideration of her services during the
term of this Agreement, Employee shall be paid compensation and benefits by the
Bank as follows:
(a) Base Salary. Employee will receive an annual base salary of One
Hundred Forty-Three Thousand Forty-Eight and 04/100 Dollars ($143,048.04)
payable in monthly installments. Employee will be entitled to receive such
increases in her annual base salary as may be approved by the Board of Directors
of the Bank ("Board"), with each such increase being included in her annual base
salary for all purposes.
(b) Additional Benefits. Employee shall be entitled to receive and to
participate, subject to any eligibility requirements, in all benefits generally
made available to the Bank's officers and also those generally made available to
all salaried employees of the Bank including, but not limited to, any bonus
plans, stock options, insurance benefits, vacation, sick leave, and
reimbursement of expenses incurred on behalf of the Bank in the course of
performing duties under this Agreement.
4. Termination and Compensation Upon Termination. Employee's employment
under this Agreement shall terminate:
(a) Upon the death of Employee.
(b) Upon written notice from the Bank to Employee in the event of
Employee's physical or mental inability to perform the essential functions of
her duties for 180 consecutive days or 180 days total in any 365-day period
("Disability") as determined by the Board or a committee of the Board in its
reasonable discretion and in accordance with applicable law.
(c) Immediately upon written notice from the Bank for any of the
following reasons which shall constitute "Cause" :
(i) the willful and continued failure by Employee to
substantially perform her duties with the Bank (other than any such failure
resulting from her Disability) after a demand for substantial performance is
delivered to Employee by the Bank's Chief Executive Officer, the Board or a
committee of the Board which specifically identifies the manner in which he or
it believes that Employee has not substantially performed her duties;
(ii) the willful engaging by Employee in gross misconduct
materially and demonstratively injurious to the Bank; or
(iii) the conviction of Employee of any crime involving fraud or
dishonesty.
(d) Upon ninety (90) days' written notice from the Bank to Employee
for any reason other than death, Disability, or Cause (a "without Cause"
termination).
If Employee's employment is terminated pursuant to Sections 4(b)
(Disability) or 4(d) (without Cause) above, then Employee shall be entitled to
receive an amount equal to her then current monthly salary (less any applicable
taxes and withholdings) for the greater of six (6) months or the then remaining
term of this Agreement, payable in a lump sum within thirty (30) days of the
date of termination of employment.
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5. Change in Control.
(a) Definition of Change in Control. For purposes of this Agreement, a
"Change in Control" means one or more of the following occurrences:
(i) A corporation, person or group acting in concert as described
in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), holds or acquires beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act of a number of shares of voting
capital stock of Four Oaks Fincorp, Inc., the holding company of the Bank
("FOF"), which constitutes more than thirty-three percent (33%) of FOF's then
outstanding shares entitled to vote.
(ii) The consummation of a merger, share exchange, consolidation,
or reorganization involving FOF and any other corporation or other entity as a
result of which less than fifty percent (50%) of the combined voting power of
FOF or of the surviving or resulting corporation or entity after such
transaction is held in the aggregate by the holders of the combined voting power
of the outstanding securities of FOF immediately prior to such transaction.
(iii) All or substantially all of the assets of the Bank or FOF
are sold, leased, or disposed of in one transaction or a series of related
transactions.
(iv) An agreement, plan, contract, or other arrangement is
entered into providing for any occurrence which as defined in this Agreement
would constitute a Change in Control.
(b) Termination Following a Change in Control.
(i) Employee shall be entitled to receive payments and benefits
pursuant to this Agreement if Employee's employment is terminated by the Bank
within two (2) years following a Change in Control without Cause.
(ii) Employee shall be entitled to receive payments and benefits
pursuant to this Agreement if Employee terminates her employment with the Bank
for "Good Reason" within two (2) years following a Change in Control and after
having given the Bank written notice of the existence of the condition
constituting Good Reason within ninety (90) days of its initial existence and
providing the Bank with a period of at least thirty (30) days to remedy the Good
Reason condition. For purposes of this Agreement, a condition constituting "Good
Reason" shall mean the occurrence of any of the following events or conditions
without Employee's consent:
(x) a change in Employee's authority, duties or
responsibilities (including reporting responsibilities) which represents a
material adverse change from her authority, duties or responsibilities in effect
immediately prior thereto;
(y) a material reduction in Employee's base salary; or
(z) the Bank's requiring Employee to be based at any place
outside a thirty (30) mile radius from Employee's current principal place of
work, except for reasonably required travel on the Bank's business which is not
greater than such travel requirements prior to the Change in Control.
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(c) Severance Pay and Benefits. If Employee's employment with the Bank
terminates under the circumstances described in Section 5(b) above, Employee
shall be entitled to receive all of the following:
(i) all accrued compensation through the termination date, plus
any bonus for which Employee otherwise would be eligible in the year of
termination, prorated through the termination date, payable in a lump sum within
thirty (30) days of the date of termination of employment.
(ii) a severance payment equal to two (2) times the amount of
Employee's most recent annual compensation, including the amount of her most
recent bonus. The severance payment shall be paid in a lump sum within thirty
(30) days of the date of termination of employment.
(iii) during the twenty-four (24) month period following the
termination of employment, or if sooner, until comparable coverage is available
to Employee in connection with subsequent employment, the Bank will reimburse
Employee for the additional costs she incurs in obtaining health insurance
benefits equivalent to the group benefit plans in which Employee participated
prior to termination as follows: (a) the Bank shall reimburse Employee for the
additional costs of continuing group health insurance benefits under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") for a period of up to
eighteen (18) months from the date of termination; and (b) for the period
immediately following the end of such eighteen (18) month period and continuing
to the end of the twenty-four (24) month period, Employee shall also be entitled
to be reimbursed for the additional reasonable costs of obtaining comparable
health insurance coverage through an insurance policy or policies she purchases
on her own.
Employee shall bear full responsibility for applying for COBRA
coverage and for obtaining coverage under any other insurance policy subject to
reimbursement under this Section and nothing herein shall constitute a guarantee
of COBRA continuation coverage or benefits or a guarantee of eligibility for
health insurance coverage. All reimbursements required by this Section shall be
paid as soon as practicable following Employee's submission of proof of timely
premium payments to the Bank; provided, however, that all such reimbursements
shall be made on or before the last day of the taxable year following the
taxable year in which the expenses were incurred. Under no circumstances will
Employee be entitled to a cash payment or other benefit in lieu of reimbursement
for the actual costs of premiums for health coverage hereunder. The amount of
expenses eligible for reimbursement during any calendar year shall not be
affected by the amount of expenses eligible for reimbursement in any other
calendar year and Employee's right to reimbursement shall not be subject to
liquidation or exchange for any other benefit.
Employee shall provide the Bank with notice of subsequent
employment and comparable coverage within thirty (30) days of commencement of
such comparable coverage.
6. Delayed Distribution to Key Employees. If the Bank determines, in
accordance with Sections 409A and 416(i) of the Code and the regulations
promulgated thereunder, in the Bank's sole discretion, that Employee is a Key
Employee of the Bank on the date Employee's employment with the Bank terminates
and that a delay in severance pay and benefits provided under this Agreement is
necessary for compliance with Section 409A(a)(2)(B)(i), then any severance
payments and any continuation of benefits or reimbursement of benefit costs
provided under this Agreement and not otherwise exempt from Section 409A shall
be delayed for a period of six (6) months (the "409A Delay Period"). In such
event, any such severance payments and the cost of any such continuation of
benefits provided under this Agreement that would otherwise be due and payable
to Employee during the 409A Delay Period shall be paid to Employee in a lump sum
cash amount in the month following the end of the 409A Delay Period. For
purposes of this Agreement, "Key Employee" shall mean an employee who, on an
Identification Date ("Identification Date" shall mean each December 31) is a key
employee as defined in Section 416(i) of the Code without regard to paragraph
(5) of that section. If Employee is identified as a Key Employee on an
Identification Date, then Employee shall be considered a Key Employee for
purposes of this Agreement during the period beginning on the first April 1
following the Identification Date and ending on the following March 31.
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A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination also constitutes a "Separation from Service" within the meaning of
Section 409A and, for purposes of this Agreement, references to a "termination,"
"termination of employment," "separation from service" or like terms shall mean
a Separation from Service.
7. Non-Assignability. This Agreement shall not be assignable by Employee.
This Agreement shall not be assignable by the Bank without the prior written
consent of Employee except to a corporation which is the surviving entity in any
merger involving the Bank or to a corporation which acquires all or
substantially all of the stock or assets of the Bank.
8. Modification. This Agreement sets forth all the terms and conditions of
the employment arrangement between Employee and the Bank and can be modified
only by a writing signed by both parties. No waiver by either party to this
Agreement at any time of a breach of the other party 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.
9. Counterparts; Construction. This Agreement may be executed in several
identical counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of North Carolina.
10. Severability. Should any provision of this Agreement be declared to be
invalid for any reason or to have ceased to be binding on the parties, such
provision shall be severed, and all other provisions shall be effective and
binding.
11. Termination of Severance Compensation Agreement. The parties agree that
the Severance Compensation Agreement is hereby terminated.
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12. Notice. All necessary notices, demands, and requests required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered in person or mailed by certified mail, postage
prepaid, addressed as follows:
If to Employee: Xxxxx X. Xxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
If to Bank: Four Oaks Bank & Trust Company
0000 X.X. 000 Xxxxx
Post Xxxxxx Xxx 000
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
or to such other address as shall be furnished by either party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
FOUR OAKS BANK & TRUST COMPANY
By: /s/ Xxxxx X. Blow, V.P.
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Authorized Officer
EMPLOYEE
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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