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Exhibit 10.01
STATE OF NORTH CAROLINA
COUNTY OF DAVIE
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement")
is entered into as of the 23rd day of December, 2008 (the
"Effective Date"), by and between BANK OF THE CAROLINAS (the
"Bank") and ROBERT E. MARZIANO ("Employee").
W I T N E S S E T H:
WHEREAS , Employee currently is employed by the Bank as Chief
Executive Officer pursuant to an Employment Agreement dated
July 12, 2004 (the "Original Agreement"); and
WHEREAS , the Bank desires to continue to employ Employee
as its Chief Executive Officer, and Employee desires to continue in
the employment of the Bank; and
WHEREAS , Employee and the Bank have agreed to certain
modifications of and to restate the Original Agreement as described
herein; and
WHEREAS , the Bank and Employee desire to set forth the
terms and conditions of Employee’s continued employment with
the Bank in a written agreement and, for that purpose, the Bank and
Employee have agreed to enter into this Agreement; and
WHEREAS , this Amended and Restated Employment Agreement
is intended to supersede and replace the Original Agreement dated
July 12, 2004.
NOW, THEREFORE , in consideration of the premises and
mutual promises, covenants, and conditions hereinafter set forth,
and for other good and valuable considerations, the receipt and
sufficiency of which hereby are acknowledged, the Bank and Employee
hereby agree as follows:
1. Employment . The Bank agrees to continue to
employ Employee, and Employee accepts continued employment with the
Bank, upon the terms and conditions stated in this Amended and
Restated Employment Agreement which supersedes and replaces in its
entirety the Bank’s and Employee’s Original Agreement
dated July 12, 2004. As an employee of the Bank, Employee will
continue to (a) serve as Chief Executive Officer of
the Bank and/or in such other or additional executive position or
positions as shall be specified from time to time by the
Bank’s Board of Directors, (b) promote the Bank
and its business and engage in business development activities on
the Bank’s behalf, and (c) have such functional
managerial duties and responsibilities as shall be assigned to him
by the Bank from time to time.
2. Term . Unless sooner terminated as provided in
this Agreement, and subject to the right of either Employee or the
Bank to terminate Employee’s employment at any time as
provided herein, the term of Employee’s employment with the
Bank (the "Term of Employment") began under the Original Agreement
on May 31, 2004, for a continually renewing period of three
(3) years, and shall continue under this Agreement with the
effect that on May 31 of each year to and including
May 31, 2014, and without any further action by the Bank or
Employee, the Term of Employment automatically shall be extended by
one additional year such that the then current unexpired Term of
Employment under this Agreement will be extended to again be three
(3) years. Upon the extension that occurs on May 31,
2014, the Term of Employment shall become a fixed three
(3) years, shall not be further extended, and shall expire at
the close of the Bank’s business on May 31, 2017. If,
following the date of expiration, Employee remains employed by the
Bank, such employment shall be on an "at will" basis.
3. Cash Compensation . For all
services rendered by Employee to the Bank under this Agreement,
during the Term of Employment the Bank shall pay Employee a base
salary at an annual rate which was set at TWO HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($250,000.00) under the Original
Agreement and which subsequently has been increased to TWO
HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS ($280,000.00) ("Base
Salary").
As an executive officer of the Bank, Employee shall be eligible
to participate in the Bank’s Management Incentive Program for
any bonus opportunities. Employee’s Base Salary may be
increased from time to time during the Term of Employment at the
discretion of the Bank’s Board of Directors. Base Salary paid
under this Agreement shall be payable not less frequently than
monthly in accordance with the Bank’s payroll policies and
procedures.
4. Employee Benefit Plans; Fringe Benefits; Income
Taxes .
(a) Benefit Plans . During the Term of Employment,
Employee shall be eligible to participate in any and all employee
benefit programs maintained by or for the Bank that are generally
available to and which cover all the Bank’s officers at
Employee’s job level or classification, subject to the rules
applicable to such plans or programs prevailing from time to time.
Except as otherwise specifically provided herein, Employee’s
participation in such plans and programs shall be subject to and in
accordance with the terms and conditions (including eligibility
requirements) of such plans and programs, resolutions of the
Bank’s Board of Directors establishing such programs and
plans, and the Bank’s normal practices and established
policies regarding such plans and programs.
Employee acknowledges that the terms and provisions of the
Bank’s employee benefit plans and programs from time to time
may be determined only by reading the actual plan documents under
which the Bank or the plan administrator, as applicable, may make
certain administrative determinations with discretion, and that the
Bank reserves the right to modify or terminate each plan or program
and any benefits provided thereunder.
(b) Annual Vacation Leave . During the Term of
Employment, all matters pertaining to the entitlement to, and the
accrual and scheduling of, vacation leave shall be determined under
the Bank’s standard leave policies and procedures in effect
from time to time; provided, however, that the minimum amount of
annual vacation leave to which Employee shall be entitled shall be
three weeks or, if longer, the number of weeks provided for in
those policies and procedures for persons in Employee’s
position or job classification.
(c) Income Taxes . All cash or other compensation
payable or provided to Employee under this Agreement shall be
subject to customary withholding of taxes and such other deductions
or withholdings as are required by law or customary for the
Bank’s employees. Employee shall be solely responsible for
any income taxes owed on account of his receipt from the Bank of
any employee or fringe benefits under this Agreement and, to the
extent that the Bank reasonably believes itself obligated to do so,
the Bank may withhold any such taxes from cash compensation payable
to Employee.
5. Standards of Performance and Conduct . During
the Term of Employment, Employee faithfully and diligently shall
discharge his obligations under this Agreement, and he shall
perform the duties associated with his positions with the Bank in a
manner which is reasonably competent and satisfactory to the Bank,
and Employee shall comply with and use his best efforts to
implement the Bank’s policies and procedures currently in
effect or as are established from time to time by the Bank.
In the execution of his employment duties under this Agreement,
Employee shall, at all times and in all material respects, comply
with any code of conduct or ethics policies applicable to Employee
and/or the Bank’s employees in general, as in effect as of
the Effective Date or as may be adopted, amended or supplemented
from time to time subsequent thereto (the "Code of Conduct"), and
with all federal and state
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statutes, and all rules, regulations,
administrative orders, statements of policy, and other
pronouncements or standards promulgated thereunder, which are
applicable to the Bank and its employees, business, and
operations.
6. Termination and Termination Pay .
(a) By Employee . The Term of Employment and
Employee’s employment under this Agreement may be terminated
at any time by Employee upon 90 days’ written notice to the
Bank. Upon such termination, Employee shall be entitled to receive
compensation earned under this Agreement through the effective date
of such termination and, thereafter, the Bank shall have no further
obligations hereunder.
(b) Death or Retirement . The Term of Employment
and Employee’s employment under this Agreement automatically
shall be terminated upon his death during the Term of Employment or
upon the effective date of Employee’s "Retirement." Upon any
such termination, Employee (or, in the case of Employee’s
death, his estate) shall be entitled to receive any compensation
Employee shall have earned prior to the date of termination but
which remains unpaid. "Retirement" shall mean any termination of
Employee’s employment with the Bank which is treated as a
retirement (whether early, normal or delayed retirement) under the
terms of any qualified retirement benefit plan generally applicable
to the Bank’s salaried employees and in which Employee is a
participant, or any other termination of employment that Employee
and the Bank mutually agree in writing to treat as a
Retirement.
(c) By the Bank . The Bank may terminate the Term
of Employment and Employee’s employment under this Agreement
at any time for "Cause" (as defined below) or without Cause. Upon
any such termination by the Bank under this Paragraph 6(c)
without Cause , the Bank shall be obligated to pay
Base Salary to Employee at his then current Base Salary rate for
the then current unexpired Term of Employment hereunder (which
payments shall be made on the same schedule as Employee’s
Base Salary was paid by the Bank during the Term of Employment),
and, if Employee chooses to exercise his rights to purchase
continued health insurance coverage under the Bank’s health
insurance plan pursuant to the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"), the Bank shall reimburse Employee for
the cost of such continued insurance coverage for the maximum
period during which such coverage is available to Employee under
COBRA, but not longer than the unexpired Term of Employment
hereunder, and shall have no further obligations hereunder. The
term " without cause " shall be deemed to include
voluntary termination of this Agreement by Employee, within ninety
(90) days’ following the occurrence of an event of "Good
Reason" which will be deemed to have occurred if the Bank, without
his consent, materially reduces Employee’s Base Salary,
materially reduces his duties and responsibilities by removing him
from an executive officer position, requires him to transfer his
office more than 50 miles from his current principal work location,
or materially breaches any term of this Agreement; provided,
however , that the Bank shall have no obligation to make any
payment to Employee following any such voluntary termination
unless, (i) within thirty (30) days following the
occurrence of the event of Good Reason giving rise to his right to
terminate, Employee gives written notice to the Bank which
describes such event and states his intention to voluntarily
terminate his employment, and (ii) the Bank shall not
have corrected, cured or remedied such event of Good Reason within
thirty (30) days following its receipt of Employee’s
above written notice.
Upon any such termination with Cause , Employee
shall have no further rights, and the Bank shall have no further
obligations, under this Agreement.
For purposes of this Paragraph 6(c), the Bank shall have "Cause"
to terminate Employee’s employment if:
(i) (A) Employee has breached in any material
respect any of the terms or conditions of this Agreement or of the
Code of Conduct, or has failed in any material respect to perform
or discharge his duties or responsibilities of employment in the
manner provided herein (provided however, that such a breach or
failure, other than a breach of the Bank’s Code of Conduct,
shall not give the Bank "Cause" to
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terminate Employee’s employment if such
breach or failure is corrected or cured by Employee to the
Bank’s reasonable satisfaction (which shall not be
unreasonably withheld by the Bank) within 30 days following written
notice thereof to Employee), or (B) Employee is
engaging or has engaged in willful misconduct or conduct which is
detrimental in any material respect to the business or business
prospects of the Bank or which has had or likely will have an
adverse effect on the Bank’s business or
reputation;
(ii) The material violation by Employee of any applicable
federal or state law, or any applicable rule, regulation, order, or
statement of policy promulgated by any governmental agency or
authority having jurisdiction over the Bank, including but not
limited to the North Carolina Commissioner of Banks, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any
other regulator (a "Regulatory Authority"), that results from
Employee’s negligence, willful misconduct, or intentional
disregard of such law, rule, regulation, order, or policy statement
and results in any substantial damage, monetary or otherwise, to
the Bank or to the Bank’s reputation;
(iii) The commission in the course of Employee’s
employment with the Bank of an act of fraud, embezzlement, theft,
or proven personal dishonesty (whether or not such act or charge
results in criminal indictment, charges, prosecution, or
conviction);
(iv) The conviction of Employee of any felony or any
criminal offense involving dishonesty or breach of trust, or the
occurrence of any event described in Section 19 of the Federal
Deposit Insurance Act or any other event or circumstance which
disqualifies Employee from serving as an employee or executive
officer of, or a party affiliated with, the Bank; or, in the event
Employee becomes unacceptable to, or is removed, suspended, or
prohibited from participating in the conduct of the Bank’s
affairs (or if proceedings for that purpose are commenced), by any
Regulatory Authority; or
(v) The exclusion of Employee by the carrier or
underwriter from coverage under the Bank’s then current
"blanket bond" or other fidelity bond or insurance policy covering
its or their directors, officers, or employees, or the occurrence
of any event that the Bank believes, in good faith, will result in
Employee being excluded from such coverage, or having coverage
limited as to Employee as compared to other covered officers or
employees, pursuant to the terms and conditions of such "blanket
bond" or other fidelity bond or insurance policy.
(d) Effect of Termination . Except as otherwise
provided below, upon the earlier of the expiration date of this
Agreement or the effective date of any actual termination of
Employee’s employment with the Bank under this Agreement for
any reason, the provisions of this Agreement, with the exception of
Paragraph 7 below and the Bank’s obligations, if any,
for continued payments of Base Salary under Paragraph 6(c)
above, likewise shall terminate and be of no further force or
effect. Employee’s covenants contained in Paragraph 7
below, and the Bank’s obligations, if any, under Paragraph
6(c) above, shall survive and remain in effect in accordance with
their terms following any actual termination of Employee’s
employment.
7. Noncompetition; Confidentiality .
(a) General . Employee hereby acknowledges and
agrees that (i) the Bank will make a significant
investment in the development of its business in the geographic
area identified below as the "Relevant Market" and, as a result,
will have a valuable economic interest in its business in the
"Relevant Market" which it is entitled to protect;
(ii) in the course of his service as an employee of
the Bank, Employee will gain substantial knowledge of and
familiarity with the Bank’s customers and its dealings with
them, and other information concerning the Bank’s businesses,
all of which will constitute valuable assets and privileged
information belonging to the Bank; and (iii) in order
to protect the Bank’s interest in its business, it is
reasonable and necessary to place certain restrictions on
Employee’s ability to compete against the Bank and on his
disclosure of information about the Bank’s business and
customers. For that purpose, and in consideration of the
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Bank’s agreements contained herein and for
a one-time payment of TWO THOUSAND FIVE HUNDRED AND NO/100
DOLLARS ($2,500.00) , Employee covenants and agrees as provided
below.
(b) Covenant Not to Compete . During the
"Restriction Period" (as defined below), Employee shall not
"Compete" (as defined below), directly or indirectly, with the
Bank.
For purposes of this Paragraph 7, the following terms shall have
the meanings set forth below:
Compete . The term "Compete" means: (i)
soliciting any Person who was a Customer of the Bank on the
date of termination of Employee’s employment with the Bank to
become a depositor in or a borrower from any other Financial
Institution, to obtain any other service or product from any other
Financial Institution, or to change any depository, loan, and/or
other banking relationship of the Customer from the Bank to another
Financial Institution; (ii) acting as a consultant,
officer, director, advisory director, independent contractor, or
employee of any Financial Institution that has its main or
principal office in the Relevant Market (as defined below), or, in
acting in any such capacity with any other Financial Institution,
to maintain an office or be employed at or assigned to or to have
any direct involvement in the management, supervision, business,
marketing activities, or solicitation of business for or operation
of any office of such Financial Institution located in the Relevant
Market; (iii) communicating to any Financial
Institution the names or addresses or any financial information
concerning any Person who was a Customer of the Bank on the date of
termination of Employee’s employment with the Bank; or
(iv) soliciting any person who was an employee of the
Bank on the date of termination of Employee’s employment with
the Bank to become an employee of any other Financial
Institution.
Customer . The term "Customer of the Bank" means
any Person with whom the Bank has a depository or loan
relationship, and/or to whom the Bank provides any other service or
product.
Financial Institution . The term "Financial
Institution" means (i) any federal or state chartered
bank, savings bank, savings and loan association, or credit union
(a "Depository Institution"), (ii) any holding company
for, or corporation that owns or controls, any Depository
Institution (a "Holding Company"), (iii) any
subsidiary or service corporation of any Depository Institution
or
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