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Exhibit
10.6
STATE OF NORTH
CAROLINA
COUNTY OF WAKE
EXECUTIVE
CONSULTATION,
SEPARATION FROM SERVICE
AND
DEATH BENEFIT
AGREEMENT
THIS EXECUTIVE
CONSULTATION, SEPARATION FROM SERVICE AND DEATH BENEFIT AGREEMENT
(“Agreement”) is made and entered into this 17th
day of September, 2007, to be effective as of the 1st day of
January, 2005, by and between FIRST-CITIZENS BANK &
TRUST COMPANY , a North Carolina banking corporation with its
principal office in Raleigh, Wake County, North Carolina
(“Company”) and HOPE H. CONNELL
(“Executive”);
W I T N E S S E T
H
WHEREAS , Executive is
an employee of Company who has provided guidance, leadership and
direction in the growth, management and development of Company and
has learned trade secrets, confidential procedures and information,
and technical and sensitive plans of Company; and
WHEREAS , Company
desires to limit Executive’s availability to other employers
or entities which are in competition with Company following
Executive’s separation from service with Company;
and
WHEREAS , Company has
offered to Executive a non-competition arrangement and a
consultation arrangement together with a death benefit arrangement
for Executive’s designated beneficiary or estate, as
applicable, and the parties hereto have reached an agreement
concerning those arrangements and other matters contained herein
and desire to set forth the terms and conditions
thereof.
NOW, THEREFORE , for
and in consideration of the mutual promises and undertakings herein
set forth, Executive and Company hereby agree as
follows:
1. Administration of
the Agreement . The Agreement shall be administered by the
Board of Directors of the Company or its delegate (the
“Administrator”). Subject to the provisions of the
Agreement, the Administrator shall have full and final authority in
its discretion
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to take any action with respect to the
Agreement including, without limitation, the authority to
(i) determine all matters relating to the payments;
(ii) establish, amend and rescind rules and regulations for
the administration of the Agreement; and (iii) construe and
interpret the Agreement, to interpret rules and regulations for
administering the Agreement and to make all other determinations
deemed necessary or advisable for administering the Agreement.
Except to the extent otherwise required under Section 409A of
the Internal Revenue Code of 1986, as amended (“Code”),
the Administrator shall have the authority, in its sole discretion,
to accelerate the date that any Consultation Payments or Separation
Payments which were not otherwise vested or earned shall become
vested or earned in whole or in part without any obligation to
accelerate such date with respect to any other employee. The
Administrator also may in its sole discretion determine that
Executive’s rights or payments under the Agreement shall be
subject to reduction, cancellation, forfeiture or recoupment due to
conduct by Executive that is determined by the Administrator to be
detrimental to the business or reputation of the Company,
including, without limitation, upon termination of employment for
cause; violation of policies of the Company; or breach of
non-solicitation, noncompetition, confidentiality or other
restrictive covenants that apply to the Executive. In addition to
action by meeting in accordance with applicable laws, any action of
the Administrator with respect to the Agreement may be taken by a
written instrument signed by the Administrator (including, where
the Board or a committee serves as the Administrator, by written
consent signed by all of the members of the Board, or all of the
members of a committee, and any such action so taken by written
consent shall be as fully effective as if it had been taken by a
majority of the members at a meeting duly held and called). No
individual shall be liable while acting as Administrator for any
action or determination made in good faith with respect to the
Agreement, and any such individual shall be entitled to
indemnification and reimbursement in the manner provided in the
Company’s certificate of incorporation and bylaws and/or
under applicable law.
2. Consultation
Payments . Following Executive’s separation from
service with Company on or after his Vesting Date (as defined in
Section 7), Company shall pay to Executive the sum of ONE
THOUSAND SIX HUNDRED SEVENTEEN and 19/100 Dollars ($1,617.19) per
month, beginning six months and one week after Executive’s
date of separation for a period of ten (10) years, or until
Executive’s death, whichever first occurs
(“Consultation Payments”). If Executive should die
during the ten-year period during which Consultation Payments are
being made under this Paragraph 2, then those payments shall
terminate.
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The monthly Consultation
Payments shall be paid for and in consideration of
Executive’s support, sponsorship, advisory and other services
provided to Company (“Consultation Services”), such sum
to be payable to Executive whether or not Executive’s
Consultation Services are utilized in said month by Company. Except
as set forth below, Consultation Payments hereunder shall be
payable each month without deductions and Executive agrees to be
solely responsible for the payment of all income and other taxes
out of said funds and all Social Security, self-employment and any
other taxes or assessments, if any, applicable on said
compensation.
For and in consideration of
said monthly Consultation Payments to Executive, Executive will
provide Consultation Services as an independent contractor to
Company, as and when Company may request, which services may be
provided with respect to all phases of Company’s business and
particularly those phases in which Executive has particular
expertise and knowledge. Executive’s services shall be
limited to those of an independent contractor, shall not be on a
day-to-day regularly scheduled operational basis and shall be
provided only when Executive is reasonably available and willing,
which willingness will not be unreasonably withheld.
Effective as of
Executive’s date of separation, Executive and Company agree
that Executive shall be, under the terms of this Agreement, an
independent contractor, and Executive agrees that Executive’s
rights and privileges and obligations are only as provided in this
Agreement as to matters covered herein. Notwithstanding the
foregoing, if Company determines that the Consultation Payments are
compensation for other than payments for Consultation Services, and
such payments shall be subject to any and all applicable
withholding, Social Security, employment, income and other taxes or
assessments, if any, under applicable tax law, the said payments
shall be subject to the required withholdings.
3. Separation
Payments . Following Executive’s separation from
service with Company on or after his Vesting Date (as defined in
Section 7), Company shall pay to Executive the sum of FOUR
THOUSAND EIGHT HUNDRED FIFTY-ONE and 56/100 Dollars ($4,851.56) per
month, beginning six months and one week after Executive’s
date of separation for a period of ten (10) years, or until
Executive’s death, whichever first occurs (the
“Separation
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Payments”). Such payments shall be
subject to any and all applicable withholding, Social Security,
employment, income and other taxes or assessments, if any, under
the applicable tax law. If Executive should die during the ten-year
period during which payments are being made under this Paragraph 3,
then those payments shall terminate and future payments, if any,
shall be made to Executive’s designated beneficiary(ies) or
Executive’s estate in accordance with the provisions of
Paragraph 4 of this Agreement.
4. Continuation of
Payments . Following Executive’s death during the
original ten-year period of payments under Paragraph 3 above, the
sum of SIX THOUSAND FOUR HUNDRED SIXTY-EIGHT and 75/100 Dollars
($6,468.75) per month shall be paid to such individual or
individuals as Executive shall have designated in writing as his
beneficiary(ies) as provided in Paragraph 13 below or, in the
absence of such designation, to Executive’s estate, as
applicable, beginning the first calendar month following the date
of Executive’s death and continuing thereafter until the
expiration of said original ten-year period. Once the monthly
payments have begun to Executive, whether paid by Company or as
otherwise provided herein, the maximum payment period under this
Agreement shall be ten (10) years.
5. Covenant Not To
Compete . For and in consideration of the monthly payments
described in Paragraphs 2 and 3, Executive agrees not to become an
officer or employee of, provide any consultation to, nor
participate in any manner with, any other entity of any type or
description involved in any major element of business which Company
is performing at the time of Executive’s separation from
service with the Company, nor will Executive perform or seek to
perform any consultation or other type of work or service with any
other firm, person or entity, directly or indirectly, in any such
business which competes with Company, whether done directly or
indirectly, in ownership, consultation, employment or otherwise.
Executive agrees not to reveal to outside sources, without the
consent of Company, any matters, the revealing of which could, in
any manner, adversely affect or disclose Company’s business
or any part thereof, unless required by law to do so. This Covenant
Not To Compete by Executive is limited to the geographic area
consisting of each county or like jurisdictional entity in which
either Company or any banking or investment entity owned directly
or indirectly by the parent of Company shall maintain a banking or
other business office at the time of Executive’s separation
from service, shall exist for and during the term of all payments
to be made under Paragraphs 2 and 3, whether made directly by
Company or as otherwise provided herein, and shall not prevent
Executive from purchasing or acquiring, as an investor only, a
financial interest of less than 5% in a business or other
entity which is in competition with Company.
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Executive acknowledges that
the remedy at law for breach of Executive’s Covenant Not To
Compete will be inadequate and that Company shall be entitled to
injunctive relief as to any violation thereof; however, nothing
herein shall be construed as prohibiting Company from pursuing any
other remedies available to it, in addition to injunctive relief,
whether at law or i
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