AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is made and
entered into by NB Acquisition Corp., a North Carolina corporation (hereinafter
the "Corporation") and ▇▇▇▇▇ ▇. ▇▇▇▇ (hereinafter the "Employee").
WHEREAS, the shareholders and directors of the Corporation intend to
organize a North Carolina chartered commercial bank, which will have its
principal offices in Raleigh, North Carolina (the "Bank"); and
WHEREAS, the Corporation and Employee desire that, and intend for, this
Agreement to be assigned to the Bank immediately upon the Bank's becoming fully
chartered and authorized under applicable law to accept such assignment; and
WHEREAS, once the Bank is fully chartered and has received all necessary
authorizations to commence business as a commercial bank, the Corporation shall
be dissolved; and
WHEREAS, the Corporation desires to employ Employee and Employee desires
to accept such employment on the terms set forth below.
In consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Corporation and Employee agree as follows:
1. Employment. The Corporation employs Employee and Employee accepts
employment on the terms and conditions set forth in this Agreement.
2. Nature Of Employment.
(a) For Corporation. Employee shall serve as the President and Chief
Executive Officer of the Corporation and shall perform all duties consistent
with such position assigned to him by the Corporation in respect to the
formation, organization, and capitalization of the Bank. Employee shall devote
his full time and attention and best efforts to perform successfully his duties
and advance the Corporation's interests. Employee shall abide by Corporation
policies, procedures, and practices as they may exist from time to time.
(b) For Bank. Once the Bank becomes fully chartered, Employee shall
serve as its President and Chief Executive Officer and have such
responsibilities and authority consistent with such positions as may from time
to time be reasonably assigned by the Bank. Employee shall also be a member of
the Board of Directors of the Bank. The Bank shall provide liability insurance
for its officers and directors. Employee shall devote his full time and
attention and best efforts to perform successfully his duties and advance the
Bank's interests. Employee shall abide by Bank policies, procedures, and
practices as they may exist and be in force from time to time.
Employee shall be based in Raleigh, North Carolina, and it is anticipated
that his duties and responsibilities shall not require relocation except for
reasonably required travel on Corporation or Bank business.
During this employment, Employee shall have no other employment of any
nature whatsoever without the prior consent of Corporation or Bank; provided,
however, this Agreement shall not prohibit Employee from personally owning and
dealing in stocks, bonds, securities, real estate, commodities or other
investment properties for his own benefit and Employee may participate in civic,
association, and social matters which do not interfere with Employee's duties
hereunder, including the matters identified in Exhibit A.
3. Compensation.
(a) Signing Bonus. Employee shall receive a signing bonus of Fifty
Thousand Dollars ($50,000) which shall be paid by the later of February 1, 1997
or within five days of execution of this Agreement.
(b) Salary. Compensation for Employee's services under this
Agreement initially shall be One Hundred and Thirty Thousand Dollars ($130,000)
per year, payable in accordance with the Corporation and Bank's reasonable
policies, procedures, and practices as they may exist from time to time. The
Employee's salary shall be reviewed annually by the Bank's Board of Directors by
January 31 of each year and may be increased in the Board's discretion based on
Employee's performance and market factors, provided that such salary shall not
be reduced below One Hundred and Thirty Thousand Dollars ($130,000).
(c) Benefits. Employee may participate in any medical, dental,
disability, life insurance, 401(k) plan, and other employee benefit plans and
programs which may be made available from time to time to other Corporation or
Bank employees at Employee's level; provided, however, that Employee's
participation in such benefit plans and programs is subject to the applicable
terms, conditions, and eligibility requirements of those plans and programs,
some of which are within the plan administrator's discretion, as they may exist
from time to time. Benefits to be initially provided by the Corporation and
subsequently the Bank include health insurance, long-term disability insurance,
term life insurance and participation in a 401(k) plan, general terms of such
benefits are set forth on Exhibit B. The Corporation or the Bank shall pay
Employee's COBRA payments for continuation of health insurance coverage under
any plan he may have with his prior employer until such time as the Corporation
or the Bank may institute a health insurance plan or program in which Employee
may participate as set forth above.
(d) Automobile. The Corporation or the Bank shall provide Employee
with the use of an automobile in a price category equivalent to a Buick LeSabre.
The Corporation or Bank shall pay fuel and reasonable maintenance expenses for
such automobile. Employee shall reimburse the Corporation or the Bank for
personal use of such automobile.
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(e) Mobile Telephone. The Corporation or the Bank shall provide
Employee with the use of a mobile telephone and shall pay all reasonable
business expenses related to the use of such telephone.
(f) Vacation. Employee shall be entitled to three (3) weeks of paid
vacation annually.
(g) Country Club Dues. The Corporation or the Bank shall pay the
monthly or annual dues for Employee's membership in one local country club and
for the Capital City Club.
(h) Performance Bonus. Employee shall be entitled to an annual
performance bonus which shall be based on budgets and goals set by Bank
management, approved by the Bank's Board of Directors, and communicated to
Employee by January 31 of each year. Such bonus shall be in an amount up to 100%
of Employee's base salary in any year. For the year 1997, Employee shall receive
a bonus in an amount of not less than $20,000 and up to $50,000, with the
precise amount to be set by the Bank's Board of Directors in its sole discretion
based on an evaluation of performance and goals and to be paid by January 31,
1998.
(i) Stock Purchase and Stock Options. Employee agrees to purchase a
minimum of One Thousand (1,000) shares of stock in the Bank upon the initial
issuance of such shares at the issue price of such shares.
Subject to, and to the extent permitted by, applicable federal and state
law, the Board of Directors of the Bank shall adopt an incentive stock option
plan within thirty (30) days of receiving its charter and will grant Employee
the option to purchase twenty-five thousand (25,000) shares of stock of the Bank
under such plan with an option price to be equal to the fair market purchase
price at which the Bank's stock is initially offered to investors and an option
term of ten years. Subject to, and to the extent permitted by, applicable
federal and state law, the option to purchase five thousand (5,000) shares
subject to such option shall be vested at the time of the grant and the
remainder shall vest on a schedule of four thousand (4,000) per year commencing
on the anniversary date hereof. If Employee's employment is terminated for
"cause" as defined in Section 5(c) or because Employee terminates by giving
written notice pursuant to the first sentence of Section 5(b), then all unvested
options shall be canceled.
The Bank will also make available options to purchase ten thousand
(10,000) shares under the incentive stock option plan to be granted in
Employee's discretion, subject to approval by the Board, to key employees of the
Bank.
4. Term Of Employment. Subject to Section 5 (Termination) below, the
original term of employment under this Agreement shall be for three (3) years,
commencing upon the date of the termination of Employee's employment
relationship with his prior employer, but, in any event, no later than February
4, 1997. On the first annual anniversary of the date employment commences
hereunder, and on each annual anniversary thereafter, the term of employment
shall be extended by an additional one year period, unless the Bank gives at
least sixty (60) days written
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notice prior to such first annual anniversary or any subsequent annual
anniversary that the employment will end at the expiration of the then existing
term.
In the event that the Bank gives such notice of non-extension, then
Employee shall be entitled, within sixty (60) days of such notice, to terminate
his employment hereunder and the Bank shall nevertheless remain obligated to pay
Employee's then current salary and bonus (based on the average of the preceding
two (2) years) and to continue his then current benefits and perquisites for the
then remaining term of this Agreement, provided that Employee complies with the
non-competition provisions to the extent applicable under Section 7.
5. Termination of Employment.
(a) Upon Failure to Obtain Bank's Charter. If the Bank has not
received authorization to commence business from the Commissioner of Banks of
North Carolina pursuant to North Carolina General Statute ss. 53-8 by December
31, 1997, then the Corporation may terminate this Agreement on December 31, 1997
or at any time thereafter, and neither the Corporation nor the Bank shall have
any further obligation to Employee except for payment of any compensation due as
of the date of termination, and Employee shall have no further obligation to the
Corporation or the Bank.
(b) With Notice. Either the Bank or Employee may terminate this
Agreement during the original or any extension term of employment by giving one
hundred and twenty (120) days notice to the other party. If the Bank terminates
this Agreement with such notice, then the Bank shall nevertheless remain
obligated to pay Employee's then current salary and bonus (based on the average
of the preceding two (2) years) and to continue his then current benefits and
perquisites for the then remaining term of this Agreement, provided that
Employee complies with the non-competition provisions to the extent applicable
under Section 7. If the Bank materially breaches this Agreement, then, after
giving the Bank notice and a sixty (60) day opportunity to cure such breach,
Employee may elect to terminate this Agreement and the Bank shall nevertheless
remain obligated to pay Employee's then current salary and bonus (based on the
average of the preceding two (2) years) and to continue his then current
benefits and perquisites for the then remaining term of this Agreement, provided
that Employee complies with the non-competition provisions to the extent
applicable under Section 7 unless such breach results from the requirement of
compliance by the Bank with any applicable laws, including, specifically,
banking regulations. If the Bank terminates with notice or the Employee
terminates because of the Bank's material breach or non-extension as set forth
above, then all unvested options shall immediately vest and must be exercised
within three (3) months.
(c) Cause, Disability, or Death. The Corporation or the Bank may
terminate Employee's employment immediately for "Disability," "Cause," or in the
event of Employee's death. For purposes of this Agreement, Disability shall mean
a mental or physical condition, or both, that substantially interferes with
Employee's ability to perform satisfactorily his usual duties for the
Corporation or the Bank for a period of more than six (6) consecutive months
upon the certificate of a qualified physician approved by the Corporation or the
Bank. For purposes of this Agreement, Cause shall mean: (i) any act of
Employee's in connection with his employment and relating to the
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Corporation's or the Bank's business including, but not limited to, misconduct,
negligence, unlawfulness or dishonesty, which is materially detrimental to the
Corporation's or the Bank's interests; (ii) Employee's unsatisfactory job
performance which is materially detrimental to the Corporation's or the Bank's
business or failure to comply with the Corporation's or the Bank's Board of
Directors' reasonable directions; or (iii) Employee's material breach of this
Agreement. Employee shall be given notice and a sixty (60) day opportunity to
cure any deficiencies arising under Sections 5(i), (ii) and (iii) above. In the
event of termination for Cause or for Disability, the Corporation or Bank's
obligation to compensate Employee ceases on the termination date except as to
the amounts due at that time.
6. Change in Control. For purposes of this Agreement, "Change in Control"
shall mean:
(a) The acquisition by any entity or person, which theretofore
beneficially owned less than 50% of the Bank's common stock in a transaction or
series of transactions which results in such entity or person beneficially
owning 50% or more of the Bank's common stock or voting power, where beneficial
ownership and the percentages of shares outstanding are determined pursuant to
Sections 13(d) and (g) of the Securities Act of 1934 and the rules and
regulations promulgated thereunder; or
(b) The merger or consolidation of the Bank with one or more
corporations in a transaction or series of transactions where the common stock
of the Bank is exchanged for less than 50% of the voting stock of the resulting
or surviving corporation, including, without limitation, an exchange of the
common stock of the Bank for cash; or
(c) The sale, assignment, transfer, pledge, hypothecation or other
disposition of assets (except a pledge, hypothecation or other similar
disposition made at the time the Bank enters into a bona fide financing
transaction with a party which at the time of such transaction is not an
affiliate of the Bank) of the Bank having a value in excess of 50% of the
consolidated total assets of the Bank.
A Change in Control shall not include a transaction, or series of
transactions, whereby the Bank becomes a subsidiary of a holding company if the
shareholders of the holding company are substantially the same as the
shareholders of the Bank prior to such transaction or series of series of
transactions.
Within sixty (60) days following the event constituting a Change in
Control, Employee may elect to terminate his employment hereunder. If Employee
so elects, then, subject to all applicable legal and regulatory requirements or
restrictions, he shall be entitled to receive an amount equal to two and
nine/tenths (2.9) years of his then current salary and bonuses (calculated as
the average bonus for the prior five (5) years), such payments to be made in
equal monthly payments over the course of a two and nine/tenths (2.9)-year
period (the "Severance Period"); in addition, Employee shall be entitled to a
continuation of all benefits and perquisites he is then receiving under this
Agreement and all unvested options to purchase shares of stock in the Bank shall
immediately vest and must be exercised within three (3) months. If Employee's
continued participation in any benefit
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plan or program is barred, the Bank shall arrange, upon comparable terms, and at
no greater cost to Employee than the cost he bore for such plan or program prior
to termination, to provide Employee with benefits substantially similar to, or
greater than, those which he is entitled to receive under any such plan or
program during the Severance Period.
7. Covenant Not to Compete. Employee acknowledges that by virtue of his
employment relationship, he shall have access to and control of confidential and
proprietary information concerning the Corporation's and the Bank's business and
that the Corporation and the Bank's business depends, to a considerable extent,
on the individual skills, efforts, and leadership of Employee. Accordingly and
in consideration of the Corporation's and the Bank's commitments to Employee
under this Agreement, Employee expressly covenants and agrees that during the
term of employment and for the longer of two (2) years following the termination
of his employment with the Bank or any period during which Employee is receiving
post-termination payments from the Bank, Employee will not, without the prior
consent of Bank:
(a) on Employee's own or another's behalf, whether as an officer,
director, stockholder, partner, associate, owner, employee, consultant or
otherwise, directly or indirectly:
(i) within the geographical areas set forth below, solicit or
do business which is the same, similar to, or otherwise in competition
with the business engaged in by the Bank and for which Employee was
primarily responsible, from or with persons or entities who are customers
of the Bank, who were customers of the Bank at any time during the last
year of Employee's employment with the Bank, or to whom the Bank had made
proposals for business at any time during the last year of Employee's
employment with the Bank; or
(ii) offer employment to, or otherwise solicit for employment,
any employee or other person who had been employed by the Bank during the
last year of Employee's employment with the Bank.
(b) within the geographical areas set forth below be employed (or
otherwise engaged) in a management capacity, other capacity which, in respect to
each of the foregoing, is providing the same or similar services which Employee
provided to the Bank, or any capacity connected with the then primary banking
activities of the Bank, by any person or entity that engages in the then primary
banking activities of the Bank provided that, he may engage in such activities
or be employed by any such person or entity after the expiration of the period
of two (2) years from the termination of employment, and in such event he shall
waive all bonuses, benefits and perquisites to which he may otherwise be
entitled hereunder and the Bank shall be relieved of the obligation to continue
to pay any salary he may be entitled to hereunder to the extent that Employee's
annual salary and bonus compensation received from such activity or employment
exceeds the salary to which he would otherwise be entitled to receive from the
Bank hereunder and, in any event, the amount payable by the Bank as continuation
of salary shall be reduced by 50%;
(c) directly or indirectly take action which is primarily intended
to be materially detrimental to the Bank's goodwill, name, business relations,
prospects and operations.
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The restrictions set forth in this Section 7 apply to the following
geographical areas:
(i) ▇▇▇ County, North Carolina and Wake County, North Carolina; or
(ii) any city, metropolitan area, or county in which the Bank
maintains an office at the date employment hereunder terminates or did maintain
an office during Employee's employment with the Bank.
The restrictions in this Section 7 shall not apply if the termination of
employment is by the Corporation or the Bank without cause or by the Employee
following a material breach by the Bank as described in Section 5(b) and the
Employee elects to waive all post-termination payments, benefits, and
perquisites and so notifies the Bank at any time during such post-termination
period.
Employee further acknowledges that the covenants contained in this Section
7 are reasonably necessary to protect the legitimate business interests of the
Bank and are reasonable with respect to scope, time, and territory and are
described with sufficient accuracy and definiteness to enable him to understand
the scope of the restrictions imposed on him. The terms and conditions of this
Section 7 shall survive expiration or termination of this Agreement or
Employee's employment and shall not be affected by any change or modification of
this Agreement unless specific reference is made to this Section 7.
8. Proprietary Information And Property. Employee shall not, at any time
during or following employment with the Corporation or the Bank, disclose or
use, except in the course of his employment with the Corporation or the Bank as
may be required by law, any confidential or proprietary information of the
Corporation or the Bank received by Employee while employed hereunder, whether
such information is in Employee's memory or embodied in writing or other
physical form.
Confidential or proprietary information is information which is not
generally available to the general public, or Bank's competitors, or
ascertainable through common sense or general business knowledge; including, but
not limited to data, compilations, methods, financial data, financial plans,
business plans, products plans, lists of actual or potential customers,
marketing information regarding executives and employees.
All records, files or other objects maintained by or under the control,
custody or possession of the Bank or its agents in their capacity as agents
shall be and remain the Bank's property. Upon termination of his employment,
Employee shall return to the Bank all property (including, but not limited to,
equipment, records, files, documents, credit cards, and keys) which he received
in connection with his employment. At the Bank's request, Employee shall bring
current all such records, files or documents before returning them.
Upon notice of cessation of his employment with the Bank, Employee shall
fully cooperate with the Bank in winding up his pending work and transferring
his work to those individuals designated by the Bank.
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The terms and conditions of this Section 8 shall survive expiration or
termination of this Agreement or Employee's employment and shall not be affected
by any change or modification of this Agreement unless specific reference is
made to this Section 8.
9. Remedies. Employee agrees that his breach or violation of Sections 7
and 8, will result in immediate and irreparable harm to the Bank for which legal
remedies would be inadequate. Therefore, in addition to any legal or other
relief to which the Bank may be entitled, the Bank may seek legal and equitable
relief, including but not limited to, preliminary and permanent injunctive
relief.
10. Employee Representation. Employee represents and warrants that his
employment and obligations under this Agreement will not breach any duty or
obligation he owes to another person or entity.
11. Waiver Of Breach. The Bank's or Employee's waiver of any breach of a
provision of this Agreement shall not waive any subsequent breach by the other
party.
12. Entire Agreement. This Agreement including any exhibit or attachment
hereto: (i) supersedes all other understandings and agreements, oral or written,
between the parties with respect to the subject matter of this Agreement
including any exhibit or attachment hereto; and (ii) constitutes the sole
agreement between the parties with respect to this subject matter. Each party
acknowledges that: (i) no representations, inducements, promises or agreements,
oral or written, have been made by any party or by anyone acting on behalf of
any party, which are not embodied in this Agreement including any exhibit or
attachment hereto; and (ii) no agreement, statement or promise not contained in
this Agreement shall be valid. No change or modification of this Agreement shall
be valid or binding upon the parties unless such change or modification is in
writing and is signed by the parties.
13. Severability. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally, if any of the provisions,
clauses or phrases in the Non-Competition (Section 7) and Proprietary
Information and Property (Section 8) provisions set forth in this Agreement are
held unenforceable by a court of competent jurisdiction, then the parties desire
that they be "blue-penciled" or rewritten by the court to the extent necessary
to render them enforceable.
14. Parties Bound. The terms, provisions, covenants and agreements
contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Corporation's or the Bank's successors and assigns. Employee may
not assign this Agreement without the Corporation's or the Bank's prior written
consent. This Agreement shall automatically and without further action or notice
be assigned from the Corporation to the Bank upon the Bank's becoming fully
chartered and authorized under applicable law to accept such assignment.
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15. Governing Law. This Agreement and the employment relationship created
by it shall be governed by North Carolina law.
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IN WITNESS WHEREOF, the parties have amended and restated this Agreement
on the day and year written below.
_______/s/_________________________ _5/22/97____
Employee Date
NB ACQUISITION CORP.
By:______/s/_____________________ __5-22-97__
Date