STATE OF NORTH CAROLINA
COUNTY OF CATAWBA
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made as of the 1st day of
December, 1999, by and between PEOPLES BANK, Newton, North Carolina, a North
Carolina banking institution (the "Bank"), and XXXXXX X. XXXXXX, XX. (the
"Employee")and is joined in by PEOPLES BANCORP OF NORTH CAROLINA, INC., a North
Carolina corporation (the "Holding Company");
W I T N E S S E T H :
WHEREAS the Employee has heretofore been employed and currently is
rendering services to the Bank as Executive Vice President, Chief Financial
Officer, and Corporate Secretary and,
WHEREAS the Bank is a North Carolina banking corporation and the Holding
Company is a North Carolina bank holding company and the sole shareholder of the
Bank; and,
WHEREAS the Bank considers the continued availability of the Employee's
services to be important to the management and conduct of the Bank's and Holding
Company's business, and desires to secure for the Bank and Holding Company the
continued availability of the Employee's services; and,
WHEREAS the Employee is willing to make his services available to the Bank
and Holding Company on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Employment. The Employee is employed as Executive Vice President,
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Chief Financial Officer, and Corporate Secretary. The Employee shall render
administrative and management services to the Bank, such as are customarily
performed by persons situated in a similar executive capacity. He shall promote
the business of the Bank and Holding Company
and perform such other duties as shall from time to time be reasonably described
by the President of the Bank.
2. Compensation.
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A. Base Salary. The Bank shall pay the Employee during the term of
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this Agreement a base salary at the rate of $127,752 per annum, payable in
monthly installments or more frequently as the Bank elects; provided, that
the rate of such salary shall be reviewed annually by the Bank. Such rate
of salary may be increased (but not decreased) from time to time in such
amounts as the Bank, in its discretion, may decide.
B. Management Incentive Plan. The Employee shall be entitled to
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participate in an equitable manner with other key management personnel of
the Bank in the Bank's management incentive plan adopted in 1998.
C. Other Compensation. The Bank shall further pay to the Employee an
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automobile allowance in the amount of $250.00 for use by the employee for
his personal automobile during his employment with the Bank on a monthly
basis. The Employee shall assume and be responsible for all tax
consequences with respect to such additional compensation.
3. Discretionary Bonuses. The Employee shall be entitled to participate
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in an equitable manner with all other key management personnel of the Bank in
discretionary bonuses authorized and declared by the Directors of the Bank. No
other compensation provided for in this Agreement shall be deemed a substitute
for the Employee's right to participate in such discretionary bonuses when and
as are declared by the Board of Directors.
4. Additional Benefits.
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A. Participation in Retirement and Medical Plan. The Employee
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shall be entitled to participate in any plan of the Bank relating to
pension, profit sharing or other retirement benefits and health, medical
and disability coverage, or reimbursement plans that the Bank may adopt for
the benefit of its
employees subject to the eligibility rules of such plan.
B. Officer Benefits/Expenses. The Employee shall be eligible to
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participate in any fringe benefits which may be or become applicable to the
Bank's executive employees, commensurate with the responsibilities and
functions to be performed by the Employee under this Agreement.
Additionally, the Employee shall be entitled to four (4) weeks of paid
vacation, as an exception to uniform employee policies promulgated by the
Directors, and such sick leave as is established by such policies. The Bank
shall reimburse the Employee for all out-of-pocket reasonable and necessary
business expenses which the Employee shall incur in connection with his
services on behalf of the Bank. Additionally, the Employee shall be
entitled to life insurance in the amount of two times his annual salary;
the same amount in accidental death and dismemberment insurance; dependent
life insurance upon his spouse in the amount of Two Thousand Dollars
($2,000.00); and disability insurance as which will compensate the Employee
66-2/3% of his salary after he is out of work pursuant to company policy
for thirty (30) calendar days. The Employer shall pay all premiums for the
insurance noted above.
5. Term. The initial term of employment under this Agreement shall be for
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the period commencing December 1, 1999 and ending three (3) calendar years after
such date. At the end of each one-year period following such commencing date,
this Agreement shall automatically be extended for an additional one (1) year
period beyond the then-effective expiration date, unless written notice from the
Bank or the Employee is received sixty (60) days prior to an anniversary date
advising the other party that this Agreement shall not be further extended, or
in the event the Employee and Employer agree to a further extension before the
expiration of this Agreement. The parties intend that this Agreement shall be a
continuing employment agreement, unless written notice is given as provided in
this Paragraph, or unless this Agreement is otherwise terminated as provided in
this Agreement.
6. Loyalty/Non-Competition.
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A. The Employee shall devote his full efforts and entire business
time to the performance of his duties under this Agreement.
B. During the term of this Agreement, or any renewals or extensions
thereof, and for a period of one (1) year after termination, the Employee
shall not, within Catawba, Alexander, Iredell or Lincoln Counties, North
Carolina, directly or indirectly, own, manage, operate, join, control or
participate in the management, operation or control of or be employed by or
connected in any manner with any depository institution or financial
services business which competes with the Bank or the Holding Company
without the prior written consent of the Bank. Notwithstanding the
foregoing, the Employee shall be free without such consent to purchase or
hold as an investment or otherwise up to 5% of the outstanding stock or
other securities of any corporation which has its securities publicly
traded on any recognized securities exchange or in any over-the-counter
market.
The Employee shall hold in confidence all knowledge or
information of a confidential nature with respect to the business of the
Bank or the Holding Company, received by him during the term of this
Agreement, and will not disclose or make use of such information without
the prior written consent of the Bank.
The Employee acknowledges that it would not be possible to
ascertain the amount of monetary damages in the event of a breach by the
Employee under the provisions of this Paragraph 6. The Employee agrees that
in the event of the breach of this Paragraph, injunctive relief enforcing
the terms of this Paragraph is an appropriate remedy.
The Bank and Employee further agree that in the event the Bank
shall terminate the employment of the Employee for cause or should the
Employee resign his employment during any period of the term of his
employment contract, then and in that event, the non-competition provisions
of this Agreement shall be applicable. If, however, the Bank should
terminate
the employment of the Employee without cause during the last year of said
Agreement, the non-competition provisions of this Agreement shall not be
applicable, and the Bank shall not proceed with respect to the remedies as
set forth above.
7. Standards. The Employee shall perform his duties under this Agreement
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in accordance with such reasonable standards expected of employees with
comparable positions in comparable organizations and as may be established from
time-to-time by the Board of Directors. The Bank shall provide the Employee with
the working facilities and staff customary at the Bank for similar executives
and necessary for him to perform his duties.
8. Termination and Termination Pay.
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A. The Employee's employment under this Agreement shall be
terminated upon the following occurrences:
(1) The death of the Employee during the term of this Agreement,
in which event the Employee's estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar
month in which his death shall have occurred and for a period of three
(3) months thereafter.
(2) The Employee's employment under this Agreement may be
terminated by the Bank at any time or by the Employee upon sixty (60)
days written notice to the Employee or the Bank, as the case may be.
Upon such termination by the Employee or by the Bank "for cause," the
Employee shall be entitled to receive compensation under this
Agreement through the effective date of such termination and such
other benefits, if any, as may be provided by the terms of other plans
and programs of the Bank in the event of termination.
Any such termination by the Bank other than termination "for cause"
shall not prejudice the Employee's right to compensation or benefits
under this Agreement. The Employee shall have no right to receive
compensation
or benefits for any period after termination "for cause." Termination
"for cause" shall include termination because of Employee's personal
dishonesty, in-competence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses), or final cease and desist
order, or any material breach of any provision of this Agreement.
(3) If the Employee is removed or permanently prohibited from
participating in the conduct of the Bank's affairs by any order issued
by any regulatory agency, all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order. The
rights of the Employee vested prior to the date of such order shall not
be affected.
(4) All obligations under this Agreement may be terminated:
(a) by the Federal Deposit Insurance Corporation at the
time it enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in its Rules and
Regulations; and,
(b) by any regulatory or supervisory agency which enters
any orders to resolve problems related to the operation of the
Bank, or when the Bank is determined to be in an unsafe or
unsound condition. Any rights of the Employee vested prior to
such time shall not be affected by any such determination or
order.
9. Suspension of Employment.
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A. The suspension of the Employee from office or temporary
prohibition from participation by the Employee in the conduct of the
affairs of the Bank pursuant to notice served by any supervisory or
regulatory agency, unless stayed by appropriate proceedings, shall suspend,
as of the date of such service, all obligations of the Bank under the terms
of this Agreement.
B. In the event the charges specified in a notice served as provided
in Subparagraph A of this Section shall be dismissed, the Bank shall:
(1) pay the Employee the compensation withheld from such
Employee pursuant to the suspension of the Bank's obligation as
required in Subparagraph A of this Section; and,
(2) reinstate the obligations suspended as required in
Subparagraph A of this section.
10. Change in Control.
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A. In the event of a "Change in Control" (as defined in Subparagraph
(C) below), the term of employment under this Agreement automatically shall
be extended to a period of three (3) years beginning on the date of the
Change in Control, and the Bank or its successor shall be bound by the
terms of this Agreement and shall be prohibited, during the remainder of
such term, from:
(1) Assigning Employee any duties and/or responsibilities that
are inconsistent with his position, duties, responsibilities or status
at the time of the Change in Control or with his reporting
responsibilities or equivalent titles in effect at such time; or
(2) Adjusting Employee's annual base salary rate other than in
accordance with the provisions of Subparagraph (B) below; or
(3) Reducing in level, scope or coverage or eliminating
Employee's life insurance, medical or hospitalization insurance,
disability insurance, profit sharing plans, stock option plans, stock
purchase plans, deferred compensation plans, management retention
plans, retirement plans, stock ownership plans or similar plans or
benefits being provided by the Bank or the Holding Company to the
Employee other than those arising from the Bank's management incentive
plan as of the effective date of the Change in Control; or
(4) Transferring Employee to a location which is an unreasonable
distance from his current principal work location, without the
Employee's express written consent.
B. In the event of a Change in Control, the Employee's base salary
shall be adjusted to include an amount equal to the average of the two
previous years' bonuses arising from the Bank's management incentive plan,
and/or discretionary bonuses, if any, and such adjusted base salary shall
be increased by not less than six percent (6%) annually beginning at the
date of the Change in Control and continuing each year for the three-year
term thereafter.
C. For the purposes of this Agreement, the term "Change in Control"
shall mean any of the following events:
(1) a change in control of a nature that would be required to be
reported in response to Item 1 of the Current Report on Form 8-K, as
in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); or
(2) such time as any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than a person who beneficially
owned as of January 1, 1998, more than 5% of the Bank's securities, is
or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Holding
Company or Bank representing 20 percent or more of the combined voting
power of the outstanding Common Stock of the Holding Company or Common
Stock of the Bank, as applicable; or
(3) individuals who constitute the Board or board of directors
of the Holding Company on the date hereof (the "Incumbent Board" and
"Incumbent Holding Company Board," respectively) cease for any reason
to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board or Incumbent Holding Company Board, as
applicable, or whose nomination for election by the Bank's or Holding
Company's shareholders was approved by the Bank's or Holding Company's
Board of Directors or Nominating Committee, as applicable, shall be
considered as though he or she were a member of the Incumbent Board or
Incumbent Holding Company Board, as applicable; or
(4) either the Holding Company or the Bank consolidates or
merges with or into another corporation, association or entity or is
otherwise reorganized, where neither the Holding Company nor the Bank,
respectively, is the surviving corporation in such transaction; or
(5) all or substantially all of the assets of either the Holding
Company or the Bank are sold or otherwise transferred to or are
acquired by any other entity or group.
Notwithstanding the other provisions of this Paragraph 10, a
transaction or event shall not be considered a Change in Control if, prior
to the consummation or occurrence of such transaction or
event, Employee, Bank and Holding Company agree in writing that the same
shall not be treated as a Change in Control for purposes of this Agreement.
D. In the event any dispute shall arise between the Employee and the
Bank or Holding Company (or any successor) as to the terms or
interpretation of this Agreement, including this Paragraph 10, whether
instituted by formal legal proceedings or otherwise, including any action
taken by the Employee to enforce the terms of this Paragraph 10 or in
defending against any action taken by the Holding Company or the Bank, the
Bank shall reimburse the Employee for all costs and expenses incurred in
such proceedings or actions, including attorney's fees, in the event the
Employee prevails in any such action.
11. Disability. If, by reason of physical or mental disability during
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the term hereof, Employee is unable to carry out the normal and usual duties of
his employment hereunder, the Employee shall receive his full salary from the
Bank for up to twenty (20) working days for which he is unable to work. Medical
disability shall require a doctor's statement indicating the date the Employee
became disabled as well as a statement that he is medically able to return to
work before he can resume his duties. If, after thirty (30) consecutive days, he
is still unable to return to work, he will be covered by the disability
insurance policy of the Bank, if that policy applies under its terms. While
disabled, the Employee will keep his original date of employment and all
seniority benefits for up to twelve (12) weeks. Group insurance will be kept in
force (Employee will continue to pay for dependent insurance); however, if the
Employee does not return to work from medical leave after twelve (12) weeks, the
Bank may recover the premiums paid to maintain the coverage. A "return to work"
occurs when an Employee returns to work for at least thirty (30) days. Upon
returning to work from such disability, the Employee shall be restored to his
previous position or to an equivalent position with equivalent benefits, pay,
and other conditions of employment.
12. Successors and Assigns.
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A. This Employment Agreement shall enure to the benefit of and be
binding upon any corporate or other successor of the Bank which shall
acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the Bank.
B. Since the Bank is contracting for the unique and personal skills
of the Employee, the Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the
written consent of the Bank.
13. Amendments. No amendments or additions to this Agreement shall be
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binding unless in writing by both parties, except as herein otherwise provided.
14. Applicable Law. This Agreement shall be governed in all respects,
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whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of North Carolina, except to the extent that federal law shall
be deemed to apply.
15. Severability. The provisions of this Agreement shall be deemed
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severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Entire Agreement; Counterparts
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A. This Agreement constitutes the entire agreement between the Employee
and the Bank with respect to the subject matter hereof and supersedes all
prior agreements with respect thereto. This Agreement may be executed in
one or more counterparts, all of which taken together shall constitute one
and the same instrument.
B. This Agreement replaces the Agreement between the parties dated
February 22, 1994 and the Addendum to the original Agreement and all other
agreements between the parties prior to the date hereof respecting the
subject matter hereof. Any and all prior agreements shall be cancelled and
have no
further force or effect when this Agreement becomes effective.
17. Notices. Any notice or other communication required or permitted under
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this Agreement shall be effective only if it is writing, delivered in person or
by reliable overnight courier service or deposited in the mail, postage prepaid,
return receipt requested and addressed as follows:
Address of the Bank: Peoples Bank, Xxxx Xxxxxx Xxx 000, Xxxxxx, Xxxxx
Xxxxxxxx, 00000.
Address of the Holding Company: Peoples Bancorp of North Carolina, Inc.,
Xxxx Xxxxxx Xxx 000, Xxxxxx, Xxxxx Xxxxxxxx, 00000.
Address of the Employee: Xxxxxx X. Xxxxxx, Xx., 0000 Xxxxxxxxx Xxxxx, Xxxxxx,
Xxxxx Xxxxxxxx 00000.
Notices given in person or by overnight courier service shall be deemed
given when delivered to the address required by this section, and notices given
by mail shall be deemed given three (3) days after deposit in the mail. Any
party hereto may designate, by written notice to the other party in accordance
herewith, any other address to which notices addressed to him shall be sent.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first written.
PEOPLES BANK, a North Carolina banking
Corporation
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, President/
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.
The Foregoing Agreement is joined in and agreed to by Peoples Bancorp of North
Carolina, Inc.
PEOPLES BANCORP OF NORTH CAROLINA, INC., a
North Carolina Corporation
by: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
President/Chief Executive Officer
