STRICTLY CONFIDENTIAL
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT
NONCOMPETITION,
SEVERANCE AND EMPLOYMENT AGREEMENT
Between
THE SOUTH FINANCIAL GROUP, INC. and XXXXXXX X. SCHOOLS
This Noncompetition, Severance and Employment Agreement (this
"Agreement") is made and entered into as of this 4th day of October, 2004, by
and between Xxxxxxx X. Schools, an individual ("Executive"), and The South
Financial Group, Inc., a South Carolina corporation and financial institution
holding company headquartered in Greenville, South Carolina (the "Company").
W I T N E S S E T H
WHEREAS the Company's Board of Directors (the "Board") believes that
Executive will be instrumental in the future success of the Company;
WHEREAS the Company and its subsidiaries desire to employ Executive as
Executive Vice President Corporate Development of the Company and in such other
capacities, if any, as Executive is currently employed as of the date hereof;
WHEREAS the terms hereof are consistent with the executive compensation
objectives of the Company as established by the Board;
WHEREAS 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 of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Subject to the terms and conditions hereof, the Company
hereby employs Executive and Executive hereby accepts such employment as the
Executive Vice President Corporate Development of the Company having such duties
and responsibilities as are set forth in Section 3 below. Executive shall
relocate his primary residence to Greenville, South Carolina.
2. Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified below.
"Agreement" shall have the meaning set forth in the preamble.
"Agreement Payment" shall mean a Payment paid or payable pursuant to
this Agreement.
"Annual Base Salary" shall have the meaning set forth in Section 6.1.
"Annual Bonus Amount" shall mean the average of the annual cash bonuses
earned by Executive under any written short-term (i.e. one year) plan
(regardless of whether a particular bonus has yet been paid or whether any
portion thereof was deferred) as a result of employment by the Company and its
affiliates over the three year period immediately preceding the date of
termination. In calculating the Annual Bonus Amount: (1) if one of the year's
bonuses in the calculation period was based on a period of less than 12 full
months, then such annual bonus amount shall be annualized; (2) if Executive was
employed for less than three years and had not yet earned a bonus in year two
and/or year three (as applicable) because Executive was not employed at December
31 of that year, then the Annual Bonus Amount shall be calculated based solely
on the years in which Executive was employed at the end of the year; (3) if
Executive shall not have been employed long enough to earn a cash bonus, then
the Annual Bonus Amount will be deemed to be zero.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean:
(i) Except as set forth in clause (ii) of this definition: (a)
fraud; (b) embezzlement; (c) conviction of Executive of any felony; (d)
a material breach of, or the willful failure or refusal by Executive to
perform and discharge, Executive's duties, responsibilities and
obligations under this Agreement; (e) any act of moral turpitude or
willful misconduct by Executive intended to result in personal
enrichment of 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 in its reasonable judgment); (f) gross
negligence or intentional misconduct resulting in material damage to
the property, reputation or business of the Company; or (g) the
ineligibility of Executive to perform Executive's 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) During the one (1) year period following a Change in
Control: (a) material criminal fraud, (b) gross negligence, (c)
material dereliction of duties, (d) intentional material damage to the
property or business of the Company, or (e) the commission of a
material felony, in each case, as determined in the reasonable
discretion of the Board, but only if (1) 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 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 Executive and Executive's 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
Executive for cause is duly adopted by a vote of a majority of the
entire Board of the Company (excluding for this purpose Executive, if a
member of the Board) at a meeting of the Board called and held and (5)
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 Executive shall be considered willful unless done or
omitted to be done by Executive not in good faith and without
reasonable belief that Executive's action or omission was in the best
interests of the Company. Notwithstanding anything to the contrary
contained in this definition, clause (ii) of this definition (and not
clause (i) of this definition) shall apply to Executive if a Change in
Control occurs and Executive's employment with the Company is
terminated prior to the date on which the Change in Control occurs, and
it is reasonably demonstrated by Executive that such termination of
employment (x) was at the request of a third party that has taken steps
reasonably calculated to effect a Change in Control or (y) otherwise
arose in connection with or anticipation of a Change in Control ("in
anticipation of a Change in Control").
"Change in Control" shall mean:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a majority of either (A) the
then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
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Securities"); provided, however, that, for purposes of this definition,
the following acquisitions shall not constitute a Change in Control:
(I) any acquisition directly from the Company, (II) any acquisition by
the Company, (III) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its
affiliates or (IV) any acquisition by any corporation pursuant to a
transaction that complies with Sections (iii)(A), (iii)(B) and (iii)(C)
of this definition;
(ii) Any time at which individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;
(iii) Consummation of a reorganization, merger, statutory
share exchange or consolidation or similar corporate transaction
involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company
or any of its subsidiaries (each, a "Business Combination"), in each
case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that, as a result of such
transaction, owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 50% or more of,
respectively, the then-outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to
the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute, rule or regulation of similar effect.
"Company" shall have the meaning set forth in the preamble.
"Compensation" shall mean the sum of (i) Executive's Annual Base Salary
(as defined in Section 6.1), and (ii) Executive's Annual Bonus Amount.
"Competitor" shall have the meaning set forth in Section 9.
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"Confidential Information" shall mean all business and other
information relating to the business of the Company and its affiliates,
including without limitation, technical or nontechnical data, programs, methods,
techniques, processes, financial data, financial plans, product plans, and lists
of actual or potential customers, 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. 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 protectable at law or
in equity as a trade secret. Confidential Information shall not include any of
the foregoing that does not constitute a trade secret under applicable law two
years after any expiration or termination of this Agreement.
"Disability" or "Disabled" shall mean the absence of Executive from
Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness that
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to Executive or Executive's legal representative.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive" shall have the meaning set forth in the preamble.
"Involuntary Termination" shall mean the termination of Executive's
employment by Executive within the one year period following a Change in Control
which is due to (i) a material change of Executive's responsibilities, or
working conditions, or duties (including changes resulting from the assignment
to Executive of any duties inconsistent with Executive's positions, duties or
responsibilities as in effect immediately prior to the Change in Control); or
(ii) a change in the terms or status (including any rolling status) of this
Agreement; or (iii) a forced relocation of Executive outside the Greenville,
South Carolina metropolitan area; or (v) a significant increase in Executive's
travel requirements.
"Net After-Tax Receipt" shall mean the Present Value of a Payment net
of all taxes imposed on Executive with respect thereto under Sections 1 and 4999
of the Code and under applicable state and local laws, determined by applying
the highest marginal rate under Section 1 of the Code and under state and local
laws which applied to Executive's taxable income for the immediately preceding
taxable year, or such other rate(s) as Executive shall certify, in Executive's
sole discretion, as likely to apply to Executive in the relevant tax year(s).
"Noncompete Period" shall have the meaning set forth in Section 9.
"Other Benefits" means (i) any unpaid base salary through the date of
termination and (ii) amounts that are vested benefits or that Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any other contract or agreement with the Company or its affiliates (other than
this Agreement) at or subsequent to the date of termination in accordance with
the terms of such plan, policy, practice or program or contract or agreement,
except as explicitly modified by this Agreement. Notwithstanding the foregoing,
"Other Benefits" shall not include any severance pay or benefits under any
severance plan, program or policy of the Company and its affiliates.
"Payment" shall mean any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of a Participant, whether paid or payable pursuant to this Agreement
or otherwise
"Present Value" shall mean such value determined in accordance with
Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code.
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"Reduced Amount" shall mean an amount expressed in Present Value that
maximizes the aggregate Present Value of the Agreement Payments without causing
any Payment to be nondeductible by the Company or an affiliate because of
Section 280G of the Code.
"Term" shall have the meaning set forth in Section 4.
"Vesting Benefits" shall mean the following: (A) all rights of
Executive pursuant to awards of share grants or options granted by the Company
shall vest and shall be released from all conditions and restrictions, except
for restrictions on transfer pursuant to the Securities Act of 1933, as amended;
(B) subject to applicable legal limits to the contrary, including limits
applicable to incentive stock options under the Code, Executive shall have the
lesser of (i) two years from the date of such termination or (ii) until the end
of the scheduled term of any such stock option to exercise any outstanding stock
options; (C) Executive shall be credited with service with the Company for such
remaining Term for the purposes of the benefit plans of the Company and its
subsidiaries; (D) Executive shall be entitled to any benefits to which Executive
is entitled under the Supplemental Executive Retirement Agreement in accordance
with the terms thereof; (E) for two years after Executive's date of termination,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue health and welfare
benefits to Executive and/or Executive's family at least equal to those that
would have been provided to them in accordance with the plans, programs,
practices and policies applicable to Executive if Executive's employment had not
been terminated or, if more favorable to Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliates and their families; provided, however, that, if Executive becomes
reemployed with another employer and is eligible to receive such benefits under
another employer provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility; and (E) if any provision of this definition
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 Executive has ceased to be an actual employee of the Company,
because Executive has insufficient or reduced credited service based upon
Executive's actual employment by the Company, because the plan or arrangement
has been terminated or amended after the effective date of this Agreement, or
because of any other reason, the Company itself shall pay to Executive an amount
equal to the average cost per employee for similarly situated employees of such
unavailable compensation, benefit, or other plan or arrangement of the Company
(including without limitation, healthcare benefits).
3. Duties. During the Term hereof, Executive shall have such duties and
authority as are commensurate with Executive's position as set forth in Section
1, including, without limitation, any such duties and authority as may be
specified in the Company's Bylaws. Executive agrees that during the Term hereof,
he will devote Executive's full time, attention and energies to the diligent
performance of Executive's duties. 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 may in good faith consider to interfere with
Executive's performance of Executive's duties hereunder.
4. Term. Unless earlier terminated as provided herein, the Executive's
employment hereunder shall be for a rolling term of three years (the "Term")
commencing on the date hereof. This Agreement shall be deemed to extend each
month for an additional month automatically without any action on behalf of
either party hereto; provided, however, that either party may, by written 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 following the
date of such notice, and this Agreement shall terminate upon the expiration of
such Term.
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5. Termination. This Agreement may be terminated as follows:
5.1 The Company. The Company may terminate Executive's
employment hereunder at any time during the Term hereof, whether prior
to or after a Change in Control (i) for Cause, (ii) if Executive
becomes Disabled, (iii) upon Executive's death, or (iv) without Cause.
5.1.1 If the Company terminates Executive's employment under
this Agreement pursuant to clause (i) of Section 5.1, the Company's
obligations hereunder shall cease as of the date of termination.
5.1.2 If the Company terminates Executive's employment under
this Agreement pursuant to clauses (ii) or (iii) of Section 5.1, the
Company's obligations hereunder shall cease as of the date of
termination except that Executive or Executive's estate will be
entitled to (1) the Other Benefits and (2) an amount equal to the
product of (x) Executive's target annual cash bonus for the year in
which the date of termination or death occurs and (y) a fraction, the
numerator of which is the number of days in the current fiscal year
through the date of termination or death and the denominator of which
is 365.
5.1.3 (a) If the Company terminates Executive's employment
pursuant to clause (iv) of Section 5.1 prior to a Change in Control,
Executive shall be entitled to receive (1) the Other Benefits and (2)
immediately in a lump sum in cash as severance upon such termination, a
multiple of Executive's Compensation equal to the number of years
(including any partial years) remaining under the Term of this
Agreement.
(b) If the Company terminates Executive's employment
pursuant to clause (iv) of Section 5.1 after a Change in Control,
Executive shall be entitled to receive (1) the Other Benefits, (2) the
Vesting Benefits and (3) immediately in a lump sum in cash as severance
upon such termination, the greater of two times Executive's
Compensation or a multiple of Executive's Compensation equal to the
number of years (including any partial years) remaining under the Term
of this Agreement.
5.2 By Executive. Executive shall have the right to terminate
Executive's employment during the Term (i) if 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 Company, (ii) if there is an
Involuntary Termination or (iii) for any other reason.
5.2.1 (a) If Executive terminates Executive's employment
pursuant to clause (iii) of Section 5.2 prior to a Change in Control,
the Company's obligations under this Agreement shall cease as of the
date of such termination.
(b) If Executive terminates Executive's employment
pursuant to clause (iii) of Section 5.2, after a Change in Control, the
Executive shall be entitled to receive (1) the Other Benefits and (2)
immediately in a lump sum in cash as severance upon such termination,
one times Executive's Compensation.
5.2.2 (a) If Executive terminates Executive's employment
hereunder pursuant to clause (i) of Section 5.2 during the two (2) year
period following a Change in Control, or pursuant to clause (ii) of
Section 5.2, Executive shall be entitled to receive (1) the Other
Benefits, (2) the Vesting Benefits and (3) immediately in a lump sum in
cash as severance upon such termination, the greater of two times
Executive's Compensation or a multiple of Executive's Compensation
equal to the number of years (including any partial years) remaining
under the Term of this Agreement.
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(b) If Executive terminates Executive's employment
pursuant to clause (i) of Section 5.2 other than under the
circumstances described in the immediately preceding clause (a),
Executive shall be entitled to receive (1) the Other Benefits, (2) the
Vesting Benefits, and (3) immediately in a lump sum as severance upon
such termination, a multiple of Executive's Compensation equal to the
number of years (including any partial years) remaining under the Term
of this Agreement.
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, provided that Executive's 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 base salary established by the Company which for the
first year of the Term shall be two hundred twenty-five thousand
dollars ($225,000.00) (the "Annual Base Salary"). Executive's salary
will be reviewed at the beginning of each of its fiscal years and, in
the sole discretion of the Company, may be increased for such year (but
not decreased). All references herein to Annual Base Salary shall refer
to Executive's base salary as so increased.
6.2 Annual Incentive Bonus. During Executive's employment, the
Executive shall participate in the Management Incentive Compensation
Plan or any successor thereto on terms equal to similarly situated
officers. Fifty percent (50%) of Executive's Annual Salary shall be a
target amount for such annual incentive cash bonus, but shall not serve
as a mandate and the actual amount, if any, shall remain the sole
discretion of the Board or Committee thereof or designated thereby.
Notwithstanding the discretionary Annual Incentive Bonus, Executive
shall be entitled to a guaranteed bonus for the years 2005 and 2006 in
the amount of ninety thousand dollars ($90,000.00) for each of those
two years, unless the discretionary Annual Incentive Bonus equals or
exceeds said amount and under such circumstances Executive shall be
entitled to only the discretionary Annual Incentive Bonus amount.
6.3 Long Term Incentive Compensation Plan. During Executive's
employment, the Executive shall participate in the Long Term Incentive
Plan or any successor thereto on terms equal to similarly situated
officers.
6.4 Supplemental Executive Benefit Plan. During Executive's
employment, Executive shall be entitled to participate in a
Supplemental Executive Retirement Agreement.
6.5 Equity Compensation Awards. During Executive's employment,
the Company may grant Executive equity compensation awards based on the
Company's common stock as determined by the Company. Notwithstanding
the equity compensation awards otherwise noted in this Section 6.5,
Executive shall be entitled to twenty-five thousand (25,000) options to
purchase Company Common Stock, to be issued at the first Board meeting
following October 1, 2004. The twenty-five thousand options referred to
above shall immediately vest in the event of a Change in Control.
6.6 Sign-on Bonus. Executive shall be entitled to a lump-sum
sign-on bonus in the amount of thirty thousand dollars ($30,000.00) on
February 15, 2005 so long as Executive is actively employed by the
Company under the terms of this agreement on such date.
6.7 Relocation Benefit. In the event Executive is forced to
relocate as a result of a Change in Control, Executive shall be
entitled to a relocation payment in the amount of sixty thousand
dollars ($60,000.00).
6.8 Miscellaneous Benefits. During Executive's employment,
Executive shall be entitled to participate in any other employee
benefit plan, programs, policies or other arrangements generally
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provided by the Company to its comparable ranking executives for so
long as the Company provides such benefits. The Company also agrees to
provide Executive, during the Term hereof, with a $1,000,000 term life
insurance policy. During the Term, Executive shall also be entitled to
participate in all other benefits accorded general Company employees.
7. Excess Parachute Payments. It is the intention of the parties hereto
that the severance payments and other compensation provided for herein are
reasonable compensation for Executive's services to the Company and shall not
constitute "excess parachute payments" within the meaning of Section 280G of the
Code and any regulations thereunder. In the event that the Company's independent
accountants acting as auditors on the date of a Change in Control for the
Company determine that receipt by Executive of all Payments would subject
Executive to tax under Section 4999 of the Code, then, notwithstanding any
provision of this Agreement to the contrary, the Agreement Payments shall be
reduced (but not below zero) to meet the definition of Reduced Amount.
8. Confidentiality. Executive shall hold in a fiduciary capacity for
the benefit of the Company all Confidential Information relating to the Company
or any of its affiliates, and their respective businesses, which shall have been
obtained by Executive during Executive's employment by the Company or any of its
affiliates. After termination of Executive's employment with the Company for any
reason, Executive shall not, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it. Upon the termination or expiration of Executive's employment
hereunder, 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
Executive in connection with Executive's employment hereunder (including all
copies of the foregoing) in Executive's possession or control and all of the
Company's equipment and other materials in Executive's possession or control.
9. Noncompetition and Nonsolicitation Agreement. During the term hereof
and for the three year period following the date of termination of employment
for any reason (the "Noncompete Period"), Executive shall not directly or
indirectly enter into an employment relationship or a consulting arrangement (or
other economically beneficial arrangement) with any other bank, thrift, lending
or financial institution of any type (a "Competitor") which would involve
Executive working in, consulting with respect to, overseeing or otherwise
servicing any market area or customers over which Executive had responsibility
at the time of his termination or during the two years immediately prior to such
termination. The obligations contained in this Section 9 shall not prohibit
Executive from being an owner of not more than 5% of the outstanding stock of
any class of a corporation which is publicly traded, so long as Executive has no
active participation in the business of such corporation.
9.1 During the Noncompete Period, Executive shall not directly
or indirectly, either as an independent contractor, employee,
consultant, agent, partner, joint venturer or otherwise through another
person or entity, including but not limited to a Competitor, (i)
solicit, induce or attempt to induce (or aid any person or entity in
doing so) any employee of Company to leave the employ of Company or in
any way interfere with the relationship between Company and any
employee thereof, (ii) hire or engage any person who was an employee of
Company or any subsidiary at any time during the six month period
preceding Executive's hiring or engagement of such employee, or (iii)
solicit or induce or attempt to induce (or aid any person or entity in
doing so) any customer, supplier, or other person or entity in a
business relation with Company to cease doing business with Company, or
in any way interfere with the relationship between any such customer,
supplier, or person or entity in a business relation with the Company.
For purposes of this Section 9.1, the phrase "customer, supplier or
other person or entity in a business relation with Company" shall mean
those persons or entities with whom the Company did business, had work
in progress or delivered an offer to perform services during the
18-month period prior to the termination of the Executive.
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9.2 If, at the time of enforcement of this Section 9, a court
shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted
by law and that such revised restrictions may be enforced against
Executive. Executive agrees that the restrictions contained in this
Section 9 are reasonable and appropriate when considered in light of
the nature and extent of the business of the Company.
9.3 In the event of the breach or a threatened breach by
Executive of any of the provisions of this Section 9, Company, in
addition and supplementary to other rights and remedies existing in its
favor, may apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief
in order to enforce or prevent any violations of the provisions hereof
(without posting a bond or other security). In addition, in the event
of an alleged breach or violation by Executive of this Section 9, the
Noncompete Period shall be tolled until such breach or violation has
been duly cured.
9.4 The existence of any claim or cause of action of Executive
against the Company, whether predicated in this Agreement or otherwise,
shall not constitute a defense to the enforcement of Sections 8 or 9 by
the Company.
9.5 The Noncompete Period shall be extended commensurately for
any period of time during which the covenants set forth in this Section
9 are contested.
10. Assignment.
10.1 This Agreement is personal to Executive, and, without the
prior written consent of the Company, shall not be assignable by
Executive other than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by
Executive's legal representatives.
10.2 This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. Except as
provided in Section 10.3, without the prior written consent of
Executive this Agreement shall not be assignable by the Company.
10.3 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it
if no such succession had taken place. "Company" means the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid that assumes and agrees to perform this Agreement by
operation of law or otherwise.
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 Company: The South Financial Group, Inc.
Poinsett Plaza
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
To Executive: At the most recent address for
Executive on file at the Company.
9
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/Savings Clause. 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. With respect
to any provision or covenant of Section 8 or 9 finally determined by a court of
competent jurisdiction to be unenforceable, Executive, the Company and its
affiliates hereby agree that such court shall have jurisdiction to reform such
provision or covenant so that it is enforceable to the maximum extent permitted
by law, and the parties agree to abide by such court's determination. If any of
the provisions or covenants of Section 8 or 9 are determined to be wholly or
partially unenforceable in any jurisdiction, such determination shall not be a
bar to or in any way diminish the rights of the Company or its affiliates, as
applicable, to enforce any such provision or covenant in any other jurisdiction.
13. Remedies.
13.1 Executive acknowledges that if he breaches or threatens
to breach Executive's 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.
13.2 All claims, disputes and other matters in question
between 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 arbitration in accordance
with the 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.
14. No Mitigation. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement, and such
amounts shall not be reduced whether or not Executive obtains other employment.
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 without regard to principles of conflicts of laws.
18. Withholding. The Company may withhold from any amounts payable
under this Agreement such United States federal, state or local or foreign taxes
as shall be required to be withheld pursuant to any applicable law or
regulation.
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
EXECUTIVE
/s/ Xxxxxxx X. Schools
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THE SOUTH FINANCIAL GROUP, INC.
By:
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Title:
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