EMPLOYMENT AGREEMENT (DAVID ZABRISKIE)
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THIS
EMPLOYMENT AGREEMENT (this “Agreement”), dated as of December 31, 2008, by and
between First National Bank of the South (d.b.a First National Bank of
Spartanburg) (“Employer”), having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
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(“Employee”).
Employer
presently employs Employee as its Executive Vice-President and Senior Lending
Officer. Employer recognizes that Employee's contributions to the
growth and success of Employer is substantial. Employer has
previously entered into an Employment Agreement with Employee as of January 31,
2005, which Employer and Employee now desire to restate principally to reflect
changes in tax laws. Employee is willing to continue to serve
Employer on the terms and conditions herein provided. Certain terms
used in this Agreement are defined in Section 28 hereof.
In
consideration of the foregoing, the mutual covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Employment. Employer
hereby continues to employ Employee and Employee continues to accept employment
on the terms and conditions hereafter set forth.
2. Term. Unless
earlier terminated as hereinafter provided in Section 16, Employee's employment
under this Agreement shall commence on the date hereof and be for a term (the
“Term”) of two years. At the end of each year of the Term, the Term
shall be extended for an additional year so that the remaining term shall
continue to be two years; provided that the
Employee or the Employer
may at any time, by written notice, fix the Term to a finite term of two
years commencing with the year of the notice.
3. Duties. Employee
shall continue to serve as an Executive Vice-President and Senior Lending
Officer of Employer and in such capacity shall perform such duties as are
consistent with that position, and as Employer from time to time may
direct. Such duties shall be performed at Employer’s principal
corporate offices or subsidiary office as agreed upon by Employer and
Employee. Employer reserves the right from time to time to extend,
curtail or change the title and duties of Employee.
4. Extent of
Services. Employee shall, during normal working hours, devote
his best efforts as well as his full time, attention and energies to the
business of Employer and shall diligently perform to the best of his ability
such duties as may be reasonable assigned to Employee.
Employee
shall not, during the term of this Agreement, be engaged in any other business
activity whether or not such business activity is pursued for gain, profit or
pecuniary advantage and whether or not such activity is carried on outside
normal working hours, but this prohibition shall not be construed as preventing
Employee from investing his assets in such form or manner as will not require
any services on the part of Employee in the operation of the affairs of the
companies in which investments are made. Employee hereby confirms
that he is under no contractual commitments inconsistent with his obligations
set forth in this Agreement, and that, during the term of this Agreement, he
will not render or perform services, or enter into any contract to do so, for
any of the corporation, firm, entity or person which are inconsistent with the
provisions of this Agreement.
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5. Base
Salary. For all services rendered by Employee under this
Agreement, Employer shall pay Employee a base salary of $180,000.00 per year,
payable in accordance with the salary payment practices of Employer, which for
purposes of this Agreement shall mean no less frequently than
monthly. Employer shall have the right to increase the compensation
provided by this Agreement, but any such increase shall not affect any of the
other terms and conditions of this Agreement. Employee’s base salary
and performance will be reviewed annually. The base salary may be
increased, but will not decrease, in the Employer’s sole discretion as a result
of the review.
6. Benefits.
(a) Employee
shall be entitled, to the extent that Employee’s position, title, tenure,
salary, age, health, performance, and other qualifications make him eligible, to
participate in all employee benefit plans or programs of Employer currently in
existence on the date hereof including but not limited to any executive
management incentive plans. Employee’s participation in any such plan
or program shall be subject to the provisions, rules and regulations applicable
thereto.
(b) At
Employer’s election, Employer shall provide Employee with an automobile owned or
leased by Employer of a make and model appropriate to the Employee’s status, or
a monthly automobile allowance, which shall be paid no less frequently than
monthly. If Employer provides the Employee with an automobile,
Employer shall provide for reasonable expenses associated with the automobile,
including, but not limited to insurance, taxes, mileage, maintenance,
etc. Employer shall reimburse Employee for such expenses no later
than the last day of the calendar year following the calendar year in which the
expense was incurred.
(c) Employer
shall pay the annual dues for Employee’s membership at the Piedmont Club for so
long as Employee remains an Executive Vice President of Employer and this
Agreement remains in force.
7. Working
Facilities. Employee shall be furnished with an office and
such other facilities and services as may be necessary or suitable to his
position and adequate for the performance of his duties.
8. Expenses. Employee
is authorized to incur reasonable expenses for promoting the business of
Employer, including expenses for entertainment, travel and similar items, but
only to the extent that such expenses are allowable deductions to Employer on
its Federal income tax return. Employer shall promptly reimburse
Employee for all such expenses upon the presentation by Employee, from time to
time, of an itemized account of such expenditures. In no event
shall any reimbursement be paid after the last day of the calendar year
following the calendar year in which the expense was incurred, nor shall the
amount of reimbursable expenses incurred in one taxable year affect the expenses
eligible for reimbursement in any other taxable year. Employee shall
repay to Employer the amounts of any expenses claimed which, for lack of proper
documentation or otherwise, are not allowed to Employer as deductions for
Federal income tax purposes.
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9. Vacations. Employee
shall be entitled each fiscal year to 20 paid days off, which number of days is
granted by Employer to employees of similar tenure and compensation rank,
pursuant to Employer’s paid days off policy. Employer reserves the
right to modify this and any other personnel policy from time to
time. Any payments made by Employer to Employee as compensation for
paid vacation leave shall be paid in accordance with Employer's salary payment
practices.
10. Stock
Options. Employee shall have the opportunity to participate in
Employer’s long-term equity incentive program and be eligible for the grant of
stock options, restricted stock, and other awards thereunder or under any
similar plan adopted by Employer. Any options or similar awards shall
be issued to Employee (i) at an exercise price of not less than the stock's
current fair market value as of the date of grant and (ii) the number of shares
subject to such grant shall be fixed on the date of grant. Awards
under this plan are in the discretion of the board of directors and shall be
made pursuant to a separate agreement.
11. Ownership of Work
Product.
(a) Employee
shall diligently disclose to Employer as soon as it is created or conceived by
Employee, and Employer shall own, all Work Product (as defined
below). To the extent permitted by law, all Work Product shall be
considered work made for hire by Employee and owned by Employer.
(b) If
any of the work Product may not, by operation of law, be considered work made
for hire by Employee for Employer (or if ownership of all right, title and
interest of the intellectual property rights therein shall not otherwise vest
exclusively in Employer), Employee agrees to assign, and upon creation thereof
automatically assigns, without further consideration, the ownership of all Work
Product to Employer, its successors and assigns.
(c) Employer,
and its successors and assigns, shall have the right to obtain and hold in its
or their own name copyrights, registrations, and any other protection available
in the foregoing.
(d) Employee
agrees to perform upon the reasonable request of Employer, during or after
Employee’s employment, such further acts as may be necessary or desirable to
transfer, perfect and defend Employer’s ownership of the Work
Product. When requested, Employee will
(i) Execute,
acknowledge and deliver any requested affidavits and documents of assignment and
conveyance;
(ii) Obtain
and aid in the enforcement of copyrights (and, if applicable, patents) with
respect to the Work Product in any countries.
(iii) Provide
testimony in connection with any proceeding affecting the right, title or
interest of Employer in any Work Product; and
(iv) Perform
any other acts deemed necessary or desirable to carry out the purposes of this
Agreement.
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Employer
shall reimburse all reasonable out-of-pocket expenses incurred by Employee at
Employer’s request in connection with the foregoing. Any
reimbursements made pursuant to this Section 11(d) shall be paid as soon as
administratively practicable, but in no event shall any reimbursement be paid
after the last day of the calendar year following the calendar year in which the
expense was incurred.
(e) For
purposes hereof, “Work Product” shall mean all intellectual property rights,
including all Trade Secrets, U.S. and international copyrights, patentable
inventions, discoveries and improvements, and other intellectual property
rights, in any programming, documentation, technology or other work product that
relates to the business and interest of Employer and that Employee conceives,
develops, or delivers to Employer at any time during the term of Employee’s
employment. “Work Product” shall also include all intellectual
property rights in any programming, documentation, technology or other work
product that is now contained in any of the products or systems (including
development and support systems) of Employer prior to the date of this Agreement
while Employee was engaged as an independent contractor or employee of
Employer. Employee hereby irrevocably relinquishes for the benefit of
Employer and its assigns any moral rights in the Work Product recognized by
applicable law.
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12.
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Protection of Trade
Secrets and Confidential
Information.
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(a) Through
exercise of his rights and performance of his obligations under this Agreement,
Employee will be exposed to “Trade Secrets” and “Confidential Information” (as
those terms are defined below). “Trade Secrets” shall mean
information or data of or about Employer or any affiliated entity, including,
but not limited to, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product plans, or lists of actual or potential
customers, clients, distributors, or licensees, that: (i) derive economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (ii) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy. To the
extent that the foregoing definition is inconsistent with the definition of
“trade secret” mandated under applicable law, the latter definition shall govern
for purposes of interpreting Employee’s obligations under this
Agreement. Except as required to perform his obligations under this
Agreement, or except with Employer’s prior written permission, Employee shall
not use, redistribute, market, publish, disclose or divulge to any other person
or entity any Trade Secrets of Employer. Employee’s obligations under
this provision shall remain in force (during and after the term) for so long as
such information or data shall continue to constitute a Trade Secret under
applicable law. Employee agrees to cooperate with any and all
confidentiality requirements of Employer, and Employee shall immediately notify
Employer of any unauthorized disclosure or use of any Trade Secrets which
Employee becomes aware.
(b) Employee
will abide by Employer’s policies and regulations, as established from time to
time, for the protection of its Confidential Information. Employee
acknowledges that all records, files, data, documents, and the like relating to
suppliers, customers, costs, prices, systems, methods, personnel, technology and
other materials relating to Employer or its affiliated entities shall be and
remain the sole property of Employer and/or such affiliated
entity. Employee agrees, upon the request of Employer, and in any
event upon termination of his employment, to turn over all copies of all media,
records, documentation, etc., pertaining to Employer (together with a written
statement certifying as to his compliance with the foregoing.)
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13. Non-Solicitation of
Customers. During the term of his employment with Employer,
and for a period of one year thereafter, Employee shall not directly or
indirectly solicit any individual or entity which was a customer or client of
Employer for the purpose of providing a service or product to such customer or
client which is the same type of service or product offered or provided by
Employer, provided, however, that this restriction shall apply only to those
customers or clients with whom Employee had contact in connection with services
or products provided by Employer within two years prior to the date of
termination of such employment.
14. Non-Solicitation of
Employees. During the term of Employee’s employment with
Employer, and for a period of one year thereafter, Employee shall not, directly
or indirectly, induce or solicit for employment any employee of Employer for the
purpose of providing services that are the same or similar to the types of
services offered or engaged in by Employer at the time of termination of
Employee’s employment with Employer.
15. Non-Competition
Agreement. During Employee’s employment with Employer and for
a period of one year thereafter, Employee shall not (without the prior written
consent of Employer) compete with Employer of any of its subsidiaries, directly
or indirectly, engage in forming, serving as an organizer, director, officer of,
employee or agent, or consultant to, or acquiring or maintaining more than a 1%
passive investment in, a depository financial institution or holding company
therefor if such depository institution or holding company has one or more
offices or branches located within 30 miles of any office or branch of Employee
in existence at the time Employee’s employment with Employer is terminated (the
"Territory"). Notwithstanding the foregoing, Employee may serve as an
officer of or consultant to a depository institution or holding company therefor
even though such institution operates one or more offices or branches in the
Territory, if Employee’s employment does not directly involve, in whole or in
part, the depository financial institution’s or holding company’s operations in
the Territory.
16. Termination.
(a) Death or
Disability. Employee’s employment hereunder shall terminate
upon Employee’s death. Employer may, in accordance with applicable
state and federal laws and regulations, terminate Employee’s employment
hereunder in the event of Employee’s disability for a continuous period of 180
days for which no reasonable accommodation is available. For purposes
of this subsection 16(a), “disability” means as defined by Treasury Regulation §
1.409A-3(i)(4), and “reasonable accommodation” means an accommodation that does
not cause an undue hardship on the Employer.
(b) Termination Without
Cause. Either party may terminate this Agreement without Cause
upon 30 days’ written notice to the other party. If Employer
terminates this Agreement without Cause, Employer shall pay Employee in cash a
lump sum severance payment in the amount of twelve month’s salary within fifteen
days after the date of termination, subject to the provisions of Section
31.
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(c) Termination With
Cause. Employer may terminate this Agreement for Cause upon
delivery of a Notice of Termination to the Employee. The Termination
of Employee’s employment shall be for "Cause" if it is:
(i) the
result of the commission or omission of an act by Employee of a willful or
negligent nature which causes harm to Employer;
(ii) the
conviction of Employee for the commission or perpetration by Employee of any
felony or any act of fraud;
(iii) the
failure of Employee to devote his full time and attention to the business, as
provided in Section 4;
(iv) or
the failure of Employee to perform his duties hereunder.
With
respect to (iii) and (iv) above, Employer shall provide written notice to
Employee of Employee’s failure to devote his full time and attention to the
business or to perform his duties hereunder, and provide Employee 30 days to
cure such failure (if it can be cured) prior to terminating with
Cause.
(d) The
Employee may terminate this Agreement for Good Reason upon delivery of a Notice
of Termination to the Employer within a 90-day period beginning on the 30th day
after the occurrence of a Change in Control. If the Employee's
employment is terminated by the Employee pursuant to this provision, in addition
to other rights and remedies available in law or equity, the Employee shall be
entitled to the following:
(i) the
Employer shall pay the Employee in cash within fifteen days (subject to the
provisions of Section 31) of the date of termination severance compensation in
an amount equal to his then current monthly base salary multiplied by 12, plus
any bonus earned or accrued through the date of termination (including any
amounts awarded for previous years but which were not yet vested);
(ii) for
a period of 12 months, the Employer shall at its expense continue on behalf of
the Employee and his dependents and beneficiaries the life insurance,
disability, medical, dental, and hospitalization benefits provided (x) to
the Employee at any time during the 90-day period prior to the Change in Control
or at any time thereafter or (y) to other similarly situated Employees who
continue in the employ of the Employer. Such coverage and benefits
(including deductibles and costs) shall be no less favorable to the Employee and
his dependents and beneficiaries than the most favorable of such coverages and
benefits referred to above. The Employer's obligation hereunder with
respect to the foregoing benefits shall be limited to the extent that the
Employee obtains any such benefits pursuant to a subsequent employer's benefit
plans, in which case the Employer may reduce the coverage of any benefits it is
required to provide the Employee hereunder as long as the aggregate coverages
and benefits of the combined benefit plans is no less favorable to the Employee
than the coverages and benefits required to be provided
hereunder. This subsection (ii) shall not be interpreted so as to
limit any benefits to which the Employee or his dependents or beneficiaries may
be entitled under any of the Employer's employee benefit plans, programs, or
practices following the Employee's termination of employment, including, without
limitation, retiree medical and life insurance benefits; and
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(iii) the
restrictions on any outstanding incentive awards (including restricted stock)
granted to the Employee under the Company's or the Bank’s long-term equity
incentive program or any other incentive plan or arrangement shall lapse and
such awards shall become 100% vested, all stock options and stock appreciation
rights granted to the Employee shall become immediately exercisable and shall
become 100% vested, all performance units granted to the Employee shall become
100% vested, and the restrictive covenants contained in Sections 13-15 shall not
apply to the Employee.
17. Governing
Law. This Agreement has been entered into in the State of
South Carolina and shall be governed by the laws of such State.
18. Remedies for
Breach. Employee recognizes and agrees that a breach by
Employee of any covenant contained in this Agreement would cause immeasurable
and irreparable harm to Employer. In the event of a beach or
threatened breach of any covenant contained herein, Employer shall be entitled
to temporary and permanent injunctive relief, restraining Employee from
violating or threatening to violate any covenant contained herein, as well as
all costs and fees incurred by Employer, including attorneys’ fees, as a result
of Employee’s breach or threatened breach of the covenant. Employer
and Employee agree that the relief described herein is in addition to such other
and further relief as may be available to Employer at equity or by
law. Nothing herein shall be construed as prohibiting Employer from
pursuing any other remedies available to it for such breach of threatened
breach, including the recovery of damages from Employee.
19. Consideration. Employee
acknowledges and agrees that valid consideration has been given to Employee by
Employer in return for the promises of Employee set forth herein.
20. Covenants are
Independent. The covenants on the part of Employee contained
herein shall each be construed as agreements independent of each other and of
any other provisions in this Agreement and the unenforceability of one shall not
affect the remaining covenants.
21. Severability and
Substitution of Valid Provisions. To the extent that any
provision or language of this Agreement is deemed unenforceable, by virtue of
the scope of the business activity prohibited or the length of time the activity
is prohibited, Employer and Employee agree that this Agreement shall be enforced
to the fullest extent permissible under the laws and public policies of the
State of South Carolina.
22. Extension of
Periods. Each of the time periods described in this Agreement
shall be automatically extended by any length of time during which Employee is
in breach of the corresponding covenant contained herein. The
provisions of this Agreement shall continue in full force and effect throughout
the duration of the extended periods.
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23. Reasonable
Restraint. It is agreed by the parties that the foregoing
covenants in this agreement are necessary for the legitimate business interests
of Employer and impose a reasonable restraining on Employee in light of the
activities and business of Employer on the date of the execution of this
Agreement.
24. Withholding of
Taxes. Employer may withhold from any amounts payable to
Employee under this Agreement all federal, state, city or other taxes and
withholdings as shall be required pursuant to any applicable law, rule or
regulation.
25. Notices. Any
notice required or permitted to be given under this Agreement shall be
sufficient if given in writing and sent by registered or certified mail to his
residence in the case of Employee or to is principal office in the case of
Employer.
26. Assignment. The
rights and obligations of the parties to this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of
Employer. This Agreement shall not be terminated by any merger or
consolidation whether or not Employer is the consolidated or surviving
corporation or by transfer of all or substantially all of the assets of Employer
to another corporation if there is a surviving or resulting corporation in such
transfer.
27. Severability. It
is not the intent of any party hereto to violate any public policy of any
jurisdiction in which this Agreement may be enforced. If any
provision of this Agreement or the application of any provision hereof to any
person or circumstances is held invalid, unenforceable or otherwise unlawful,
the remainder of this Agreement and the application of such provision shall be
reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal.
28. Certain
Definitions. For the purpose of this Agreement, the following
terms and phrases have the particular meaning given below:
(a) “Change in Control”
shall mean as defined by Treasury Regulation § 1.409A-3(i)(5).
(b) “Good Reason” shall
mean as defined by Treasury Regulation § 1.409A-1(n)(2).
(c) “Notice of
Termination” shall mean a written notice of termination from Employer or
Employee which specifies an effective date of termination, indicates the
specific termination provision in this Agreement relied upon, and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee's employment under the provision so
indicated.
(d) "Terminate," "terminated," "termination," or
"termination of
employment" shall mean separation from service as defined by Regulation
1.409A-1(h).
29. Entire Agreement;
Amendment. This Agreement supersedes any other agreements,
oral or written, between the parties with respect to the subject matter hereof,
and contains all of the agreements and understandings between the parties with
respect to the employment of Employee by Employer. Any waiver or
modification of any term of this Agreement shall be effective only if it is set
forth in writing signed by all parties hereto; provided, however, that
Employee’s compensation may be increased at any time by Employer without in any
way affecting any of the other terms and conditions of this Agreement, which in
all other respects shall remain in full force and effect.
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30. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the
same Agreement.
31. Compliance with Internal
Revenue Code Section 409A. Employer and Employee intend that
their exercise of authority or discretion under this Agreement shall comply with
section 409A of the Internal Revenue Code of 1986. If any provision
of this Agreement does not satisfy the requirements of section 409A, such
provision shall nevertheless be applied in a manner consistent with those
requirements. If any provision of this Agreement would subject Employee to
additional tax or interest under section 409A, Employer shall reform the
provision. However, Employer shall maintain to the maximum extent
practicable the original intent of the applicable provision without subjecting
Employee to additional tax or interest, and Employer shall not be required to
incur any additional compensation expense as a result of the reformed
provision. Notwithstanding any other provision in this Agreement, if
Employee is determined by the Employer, as of the date of termination of
employment with the Employer, to be a "specified employee," as such term is
defined in Treasury Regulation §1.409A-1(i), and if any benefits paid to
Employee hereunder would be considered deferred compensation under Section 409A,
and finally if an exemption from the six month delay requirement of Section
409A(a)(2)(B)(i) is not available, then all severance payments and other
payment, except for other payments of base salary at the normal payroll
schedule, reimbursement of expenses, and other than as a result of death, that
would normally be paid within six months and one day from the date of
termination of employment shall be paid on the first day of the seventh month
following termination of employment.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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EMPLOYER:
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FIRST
NATIONAL BANK OF THE SOUTH
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[CORPORATE
SEAL]
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By:
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Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Attest:
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Title: President/CEO
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EMPLOYEE:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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