EXHIBIT 7
EMPLOYMENT AGREEMENT
THIS AGREEMENT is executed on December ___, 1999, by and among
Hillsborough Savings Bank, Inc., SSB, a state savings bank with its principal
offices in Hillsborough, North Carolina its corporate successor, NBC Bank FSB, a
federal savings bank, collectively referred to hereinafter as "NBC", "the
Company" or "Employer" and D. ▇▇▇▇▇ ▇▇▇▇▇▇▇ (hereinafter "Employee").
Employer and Employee (collectively the "Parties") recite and
declare:
A. Employee is currently employed as the President and Chief
Executive Officer of Employer pursuant to an Employment Agreement dated December
7, 1995, as amended (the"Prior Contract").
B. The Parties desire to terminate the Prior Contract and to
commit to the following terms and conditions for Employee's future employment.
For the reasons set forth above, and in consideration of the
mutual promises and agreements set forth in this Agreement, the Parties agree as
follows:
SECTION I
EMPLOYMENT
Prior to the Effective Date, Employer shall continue to employ
Employee as President and Chief Executive Officer of Employer, subject to the
terms of this Agreement. After the Effective Date, Employer hereby agrees to
employ Employee as President of NBC Bank, FSB (Hillsborough) and Employee hereby
accepts and agrees to such employment, subject to the terms of this Agreement.
During the term hereof, the Employee's physical office location shall be in the
same space at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as prior to
the Effective Date. As used herein, "Effective Date" means the calendar day on
which Piedmont Bancorp, Inc. ("PBI") merges with and into National Commerce
Bancorporation ("NCBC"). Employee shall not be required to travel frequently
outside the Restricted Area without his consent.
SECTION II
RESPONSIBILITIES
During the term of Employee's employment and subject to the
terms of this Agreement, after the Effective Date Employee shall have the
responsibility of functioning as President of NBC Bank (Hillsborough). In
carrying out such functions, Employee shall report to the President of the North
Carolina region of NBC Bank FSB (North Carolina).
SECTION III
TERM OF AGREEMENT
The term of this Agreement shall commence on the Effective
Date and continue for three (3) consecutive years. Upon the expiration of the
initial three (3) year term of this Agreement, this Agreement shall be
automatically renewed for periods of one (1) year at the end of each current
term unless terminated as provided in Section VI of this Agreement.
SECTION IV
COMPENSATION OF EMPLOYEE
Employer will compensate Employee for his services rendered
pursuant to this Agreement as follows:
(a) Base Salary. Employer shall pay Employee an annual base
salary of $107,000, payable bi-weekly, subject to normal withholding and payroll
taxes. Employer at its sole discretion may increase the base salary from time to
time. Any such increase shall be added to the then-current base salary and such
amount shall thereafter constitute the base salary as referred to in this
Agreement.
(b) Employee Benefits. Employee shall fully participate in the
Employer's employee benefit plans (including those provided by NCBC), which
benefits shall include the following:
(1) Medical, Dental and Group Term Life Insurance. Employee
shall participate fully in medical, dental and group term life insurance
provided by Employer to other employees, with benefits commensurate with the
Employee's title and compensation. Medical, life and disability insurance will
be provided without disruption as a result of any pre-existing medical
conditions.
(2) Qualified Retirement Plan. Employee shall participate
fully in all tax- qualified retirement plans provided by Employer to other
employees, with benefits commensurate with the Employee's title and
compensation.
(3) Incentive Compensation. Employee shall be entitled to
additional annual cash compensation of 30% of his then-current base salary upon
the attainment of commercially reasonable or mutually agreed prearranged plan
performance goals established by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, with the
input and consultation of Employee.
(4) Vacation, Holidays and Sick Pay. Employee shall be
entitled to paid vacation, holidays, and to sick pay as defined in Employer's
written personnel policy available to all employees as updated from time to
time. The Employee shall be deemed to be vested in all benefits available to his
title or position immediately at the Effective Date, without any waiting or
elimination period. The Employee shall be entitled, with pay, to additional
vacation and sick days due to him at the day next preceding the Effective Date,
which unused vacation days must be used within two years after the Effective
Date.
(5) Expense Reimbursement. In addition to the Base Salary and
any Incentive Compensation, the Employer shall reimburse Employee for all
actual, normal out-of-pocket expenses that he reasonably incurs in connection
with his duties hereunder during the term hereof.
(6) Professional Matters, Etc. The Employer agrees to assist
and support Employee in maintaining and extending his professional education and
activities. In this regard, the Employer shall reimburse Employee for all
reasonable travel, accommodations, and out-of-pocket expenses incurred by
Employee and his spouse in attending a reasonable number (not less than two) of
banking conventions and educational programs provided by the North Carolina
Bankers Association and the American Bankers Association in each year during the
term hereof.
For purposes of this Article IV, the term "NCBC" means NCBC or
the corporate affiliate(s) thereof through which benefits to NCBC's employees
are principally provided. With respect to eligibility for, and vesting of, all
employee benefits, Employee will be given credit for all prior service to
Piedmont Bancorp, Inc. and its subsidiaries.
SECTION V
CONFIDENTIALITY AND NONCOMPETITION
Except as required by law, Employee agrees that he will not at
any time communicate or divulge to, or use for his benefit, or for the benefit
of any other person, firm, association, or corporation, any information
concerning Employer's business activities, including, without limitation,
financial projections and models, costs and sales data, marketing plans and
programs, customer lists, loan and deposit information, and methods of
operations, or other confidential matters possessed, owned or used by Employer
that have been or may be communicated to, acquired by, or learned of by him in
the course of or as a result of his employment with Employer. All records,
files, memoranda, reports, loan lists, customer and depositor information,
drawings, plans, sketches, documents, equipment and other similar information
relating to the business of Employer, which Employee shall develop, create, use,
prepare or come into contact with shall remain the sole property of Employer,
and shall be returned to Employer not later than the termination of Employee's
employment. Publicly available information, or information learned outside the
Employee's employment, as well as skills acquired by the Employee during the
term of his employment shall not be deemed confidential.
Employee agrees that Employee will not, during the Restricted
Period directly or by assisting others, conduct Company Activities in the
Restricted Area, or otherwise engage in, have an equity or profit interest in,
or render services in the Restricted Area, to any business that conducts any of
the Company Activities in the Restricted Area. The term "Restricted Period"
means the first two calendar years after the Effective Date or one year after
the termination (other than a Non-Cause Termination (as defined herein)) of
Employee's employment, whichever period is longer. The term "Restricted Area"
shall mean the State of North Carolina. Notwithstanding anything in this
Agreement to the contrary, Employee may acquire, collectively (directly or
indirectly, through trusts or otherwise), up to five percent (5%) of any company
whose common stock is publicly traded on a national securities exchange or in
the over-the-counter market. Employee acknowledges Employer conducts Company
Activities with customers throughout the United States, and that to adequately
protect the interests of Employer it is essential that any noncompetition
covenant with respect thereto cover all Company Activities in the Restricted
Area. The term "Company Activities"shall mean commercial banking, retail
banking, and mortgage banking.
The parties further agree that if a judicial or arbitral
determination is made that any of the provisions of this paragraph or of the
preceding paragraph constitutes an unreasonable or otherwise unenforceable
restriction against Employee, the provisions of this paragraph or such preceding
paragraph shall be rendered void only to the extent that such judicial or
arbitral determination finds such provisions to be unreasonable or otherwise
unenforceable with respect to Employee. In this regard, the parties hereby agree
that any judicial or arbitral authority construing this Agreement shall be
empowered to sever any portion of the Restricted Area, any prohibited business
activity or any time period from the coverage of this paragraph and such
preceding paragraph and to apply the provisions of this paragraph or such
preceding paragraph to the remaining portion of the Restricted Area, the
remaining business activities and the remaining time period not so severed by
such judicial or arbitral authority. Moreover, notwithstanding the fact that any
provision of this paragraph or the preceding paragraph is determined not to be
specifically enforceable, Employer shall nevertheless be entitled to recover
monetary damages as a result of the breach of such provision by Employee.
SECTION VI
TERMINATION
(a) Termination by Employer For Cause. Employer may terminate
this Agreement for cause pursuant to notice in writing to Employee, specifying
such cause with reasonable particularity. Employee shall have ten (10) days from
receipt thereof in which to cure the act or omission complained of, unless the
act or omission of its very nature cannot be cured within such period, in which
event if the Employee shall have begun diligently working to cure such act or
omission during such period, then the Employee shall have a reasonable period of
time to effect such cure so long as the Employee continues to work diligently to
accomplish such cure. If no cure has been or can be effected within the time
allowed, this Agreement shall thereupon terminate.
For purposes hereof, "cause" shall be limited to:
(i) Any material act of self-dealing between Employer and
Employee which is not disclosed in full to, and
approved by, the Employer;
(ii) Deliberate falsification by Employee of any records or
reports;
(iii) Fraud on the part of Employee against the Employer or
any subsidiary or affiliate;
(iv) Theft, embezzlement or misappropriation by Employee of
any funds of Employer, or conviction of any felony; or
(v) Personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than
traffic violations or similar offenses) or final
cease-and-desist order or material breach of any
provisions of this Employment Agreement.
In the event of Employee's termination for cause, all
compensation and benefits due under this Agreement shall terminate thirty (30)
days from the effective date of termination.
It is agreed, however, that except for an occasion in which
the Employer, in the exercise of its reasonable discretion, believes that
Employee's removal upon the aforesaid ten (10) days' notice is necessary for the
protection of the Employer, the Employer shall give Employee written notice of
the violation or reason that it desires to terminate him and at least sixty (60)
calendar days (exclusive of Federal and State holidays) to reasonably cure any
violation or to address any other ground stated by the Employer in its written
notice. The Employer's written notice shall describe the facts and circumstances
of the alleged breach or violation in reasonable detail.
Any notice from the Employer to Employee concerning a "cause"
for removal shall be deemed a demand for cure of the asserted breach or
violation. The Employer may terminate Employee for the reasons specified in
Subparagraph (a)(ii) through (a)(iv) immediately upon sending Employee written
notice describing the facts and circumstances of the breach or violation in
reasonable detail, but without giving Employee the opportunity to cure such
violation(s) or breach(es). If Employee is acquitted, not convicted, or
otherwise prevails in respect of the charges described in such Subparagraphs, he
shall be entitled to either (x) back pay and reinstatement or (y) back pay plus
the Termination Payment (as herein defined), at his election, and the provisions
of Section V shall not apply unless the Employee chooses reinstatement under (x)
above.
Employee shall be entitled to the Termination Payment,
together with interest thereon at the judgment rate of interest, if the Employer
terminates Employee's employment for any reason other than those set forth in
this Paragraph VI(a).
Except as noted above, if Employer terminates Employee
pursuant to this Section for the reasons specified in either Subparagraph (a)(i)
or (a)(v), the provisions of Section V shall terminate. If Employer terminates
Employee pursuant to this Section for the reasons specified in either
Subparagraph (a)(ii); (a)(iii); or (a)(iv) the provisions of Section V shall
apply.
(b) Termination by Employee For Cause. The Employee shall be
authorized to terminate this Agreement for the following reasons:
(i) The Employer commits a material breach or violation of
this Agreement, including any attempt to reassign the
Employee to a different office or geographic area,
which is not cured before the expiration of thirty (30)
calendar days after written notice from Employee
describing the facts and circumstances of the breach or
violation in reasonable detail. Such notice shall be
deemed a demand for cure of the breach or violation;
and/or
(ii) The Employer persists, for a period of thirty (30)
calendar days after written notice from Employee
describing in reasonable detail the matter as to which
he is complaining, in any attempt to require Employee
to perform (or omit to perform) any act or engage (or
omit to engage) in any conduct that would constitute
illegal conduct or omission. Such notice shall be
deemed a demand for the Employer to cease any such
attempt.
If Employee terminates his employment pursuant to this section
(b), the non-competition provisions of Section V shall terminate.
If Employee terminates his employment pursuant to Section
(b)(i) or (b)(ii), the Employee shall be entitled to Termination Payment
pursuant to Section (c)(iii) herein.
(c) Termination by Either Party for Non-Cause or Other
Reasons. Either party may terminate this Agreement upon ninety (90) days written
notice to the other party for any reason. Termination pursuant to this section
shall be referred to as a "Non-Cause Termination." Specifically, a "Non-Cause
Termination" shall be any termination of the Employee's employment other than
for cause, as defined in subparagraph VI(a) or IV(b) above.
(i) Non-Cause Termination by Employee. In the event of
termination pursuant to this section (c) by the
Employee, all compensation and benefits due under this
Agreement shall terminate on the effective date of
termination. If Employee terminates his employment
pursuant to this section (c), the non-competition
provisions of Section V shall apply.
(ii) Non-Cause Termination by Employer. In the event of
termination pursuant to this section (c) by Employer,
liquidated damages shall be paid to Employee as
specified in subsection (iii) herein and referred to
herein as "Termination Payment."
(iii) Termination Payment. In the event of a Non-Cause
Termination by Employer pursuant to Section (c)(ii)
above, the Employer shall pay the Employee a lump sum
severance amount, as liquidated damages, equal to the
remaining salary (the"Termination Payment") due and
payable for the remainder of the original term of this
Agreement; all of Employee's benefits (such as
retirement benefits, stock options, restricted stock
grants and other employee benefits) shall immediately
be vested and all health, life and disability insurance
coverage shall continue through the end of the term of
this Agreement as if there had been no termination and
with health insurance continuing as set forth in
Section IV(b)(1); and the non-competition provisions of
Section V shall immediately terminate.
(d) Termination by Death. This Agreement shall automatically
terminate upon the death of Employee. In such event, all compensation and
benefits due under this Agreement shall terminate on Employee's death, except
for benefits (such as life insurance or stock options) specified in separate
written agreements or plans.
(e) Termination by Retirement. This Agreement shall
automatically terminate three months after Employee's sixty-fifth (65th)
birthday. In such event, all compensation and benefits due under this Agreement
shall terminate on Employee's retirement. No non-competition agreement shall
survive termination of the Employee's employment for the reason specified in
this provision.
(f) Termination for Disability. Employer may terminate this
Agreement in the event that Employee shall, during the term of this Agreement,
become permanently disabled as defined in this section. Such option shall be
exercised by Employer giving notice in writing to Employee of Employer's
intention to terminate this Agreement on the last day of the month in which the
notice is so mailed, with the same force and effect as if such last day of the
month were the date originally set forth in this Agreement as the termination
date of this Agreement. In such event, all compensation and benefits due under
this Agreement shall terminate on the date of termination. No non-competition
agreement shall survive termination of the Employee's employment for the reason
specified in this provision.
For the purposes of this Agreement, Employee shall be deemed
to have become permanently disabled, if, during any year of the term of this
Agreement, because of ill health, physical or mental incapacity he is completely
prevented from performing the minimum requirements of his position for a period
of six (6) consecutive calendar months.
(g) Termination by Employer After Expiration of Initial Terms.
Upon the expiration of the initial three (3) year term of this Agreement set
forth in Section III, Employer may terminate this Agreement by delivering to
Employee written notice of Employer's intent to terminate; provided, however,
that such written notice must be delivered at least one hundred eighty (180)
days prior to the end of the then current term of this Agreement, including the
initial three (3) year term of this Agreement. No non-competition agreement
shall survive termination of the Employee's employment for the reason specified
in this provision.
(h) Effect of Termination on Vested Benefits. Notwithstanding
anything contained in this Agreement, Employee's termination of employment shall
not affect the Employer's liability for the payment of vested benefits pursuant
to individual contracts or state or federal law requiring the
payment of such benefits.
SECTION VII
AGREEMENTS OUTSIDE OF CONTRACT
This Agreement contains the complete agreement concerning the
employment arrangement between the Parties and shall, as of the effective date
hereof, supersede all other agreements between the Parties. The Parties
stipulate that neither of them has made any representation with respect to the
subject matter of this Agreement or any representations including the execution
and delivery of this Agreement except such representations as are specifically
set forth in this Agreement and each of the parties acknowledges that he or it
has relied on its own judgment in entering into this Agreement. The Parties
further acknowledge that any payments or representations that may have been made
by either of them to the other prior to the date of executing this Agreement are
of no effect and that neither of them has relied thereon in connection with his
or its dealings with the other. However, any stock option agreement between the
Parties is not merged into or affected by this Agreement except as expressly
stated herein.
SECTION VIII
MODIFICATION OF AGREEMENT
Any modification of this Agreement or additional obligation
assumed by either Employer and Employee in connection with this Agreement shall
be binding only if evidenced in writing signed by each of them or an authorized
representative of each of them.
SECTION IX
EFFECT OF PARTIAL INVALIDITY
The invalidity of any portion of this Agreement will not and
shall not be deemed to affect the validity of any other provision. In the event
that any provision of this Agreement is held to be invalid, the Parties agree
that the remaining provisions shall be deemed to be in full force and effect as
if they had been executed by both parties subsequent to elimination of the
invalid provision.
SECTION X
CHOICE OF LAW AND FORUM
It is the intention of the Parties that this Agreement and the
performance under this Agreement, and all suits and special proceedings under
this Agreement, be construed in accordance with and under and pursuant to the
laws of the State of North Carolina and that, in any action, special proceeding
or other proceeding that may be brought arising out of, in connection with, or
by any reason of this Agreement, the laws of the State of North Carolina shall
be applicable and shall govern to the exclusion of the law of the forum, without
regard to the jurisdiction in which any action or special proceeding may be
instituted. Disputes under this Agreement shall be resolved in the state and
federal courts in North Carolina.
SECTION XI
NO WAIVER
The failure of either Employer or Employee to insist upon the
performance of any of the terms and conditions of this Agreement, or the waiver
of any breach of any of the terms and conditions of this Agreement, shall not be
construed as thereafter waiving any such terms and conditions, but the same
shall continue and remain in full force and effect as if no such forbearance or
waiver had occurred.
SECTION XII
ATTORNEYS' FEES
In the event that any action is filed in relation to this
Agreement, the unsuccessful party in the section shall pay to the successful
party, in addition to all the sums that either party may be called on to pay, a
reasonable sum for the successful party's attorneys' fees.
SECTION XIII
GENERAL PROVISIONS
13.1 The title to the paragraphs of this Agreement are solely
for the convenience of the Parties and shall not be used to explain, modify,
simplify or aid in the interpretation of the provisions of this Agreement.
13.2 In the event of a conflict between this Agreement and
Section 10 of the Stock Option Grant received by the Employee on the Effective
Date, this Agreement shall govern; except that the terms of this Agreement shall
govern the vesting of present or future stock option agreements in the event of
a Non-Cause Termination.
13.3 This Agreement shall be null and void unless NCBC and PBI
merge pursuant to the terms of that certain Agreement and Plan of Reorganization
dated December 27, 1999.
IN WITNESS WHEREOF, the Parties now duly execute this
Agreement to be effective the Effective Date.
HILLSBOROUGH SAVINGS BANK, INC., SSB
By: ______________________
Title: ______________________
Date: ______________________
NBC BANK, FSB
By: ______________________
Title: ______________________
Date: ______________________
EMPLOYEE: ______________________
Date: ______________________