EXHIBIT
10(iv)
Employment
Agreement
This
Employment
Agreement (this “ Agreement ”)
is entered into effective as of this 10 day
of September, 2008 by and among Bruce W. Elder (the
“ Executive ”), Crescent Financial
Corporation, a North Carolina corporation (the “
Corporation ”), and Crescent State Bank, a
North Carolina-chartered bank and wholly owned subsidiary of
Crescent Financial Corporation (the “ Bank
”). The Corporation and the Bank are hereinafter
sometimes referred to together or individually as the “
Employer .”
Whereas
, the Executive is the Vice
President and Principal Accounting Officer of the Corporation and
Senior Vice President and Chief Financial Officer of the Bank,
possessing unique skills, knowledge, and experience relating to
their business, and the Executive has made and is expected to
continue to make major contributions to the profitability, growth,
and financial strength of the Corporation and
affiliates,
Whereas
, the Executive and the Employer
intend that this Agreement shall supersede and replace in its
entirety the October 24, 2007 Employment Agreement between the
Executive and the Employer, and
Whereas
, none of the conditions or events
included in the definition of the term “golden parachute
payment” that is set forth in Section 18(k)(4)(A)(ii) of the
Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in
Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR
359.1(f)(1)(ii)] exists or, to the best knowledge of the Employer,
is contemplated insofar as the Employer or any affiliates are
concerned.
Now Therefore
, in consideration of these
premises, the mutual covenants contained herein, and other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows.
Article
1
Employment
1.1
Employment . The Employer hereby employs the
Executive to serve as Vice President and Principal Accounting
Officer of the Corporation and Senior Vice President and Chief
Financial Officer of the Bank according to the terms and conditions
of this Agreement and for the period stated in section
1.3. The Executive hereby accepts employment according
to the terms and conditions of this Agreement and for the period
stated in section 1.3.
1.2
Duties . The Executive shall serve under the
direction of the Employer’s President and Chief Executive
Officer and in accordance with the Employer’s Articles of
Incorporation and Bylaws, as the Articles of Incorporation and
Bylaws may be amended or restated from time to time. The
Executive shall report directly to the President and Chief
Executive Officer. The Executive shall serve the
Employer faithfully, diligently, competently, and to the best of
the Executive’s ability. The Executive shall
exclusively devote full time, energy, and attention to the business
of the Employer and to the promotion of the Employer’s
interests throughout the term of this Agreement. Without
the written consent of the board of directors of each of the
Corporation and the Bank, the Executive shall not render services
to or for any person, firm, corporation, or other entity or
organization in exchange for compensation, regardless of the form
in which such compensation is paid and regardless of whether it is
paid directly or indirectly to the Executive. Nothing in
this Article 2 shall prevent the Executive from managing personal
investments and affairs, provided that doing so does not interfere
with the proper performance of the Executive’s duties and
responsibilities under this Agreement.
1.3
Term of Employment . The initial term of this
Agreement shall be for a period of three years commencing on the
effective date of this Agreement. On the first
anniversary of the effective date of this Agreement and on each
anniversary thereafter, this Agreement shall be extended
automatically for one additional year unless the Employer’s
board of directors determines that the term shall not be
extended. If the board of directors determines not to
extend the term, it shall promptly notify the Executive in writing,
and this Agreement shall nevertheless remain in force until its
term expires. The board’s decision not to extend
the term of this Agreement shall not – by itself – give
the Executive any rights under this Agreement to claim an adverse
change in position, compensation, or circumstances or otherwise to
claim entitlement to severance benefits under Articles 4 or
5. References herein to the term of this Agreement mean
the initial term, as the same may be extended. Unless
sooner terminated, the Executive’s employment and the term of
this Agreement shall terminate when the Executive attains age
65.
Article
2
Compensation and
Benefits
2.1
Base Salary . In consideration of the
Executive’s performance of the obligations under this
Agreement, the Employer shall pay or cause to be paid to the
Executive a salary at the annual rate of not less than $180,000,
payable in semi-monthly installments. No less frequently
than annually, the Executive’s salary shall be reviewed by
the Compensation Committee of the Employer’s board of
directors or by the board committee with jurisdiction over
executive compensation. The Executive’s salary
shall be increased no more frequently than annually to account for
cost of living increases. The Executive’s salary
also may be increased beyond the amount necessary to account for
cost of living increases at the discretion of the committee having
jurisdiction over executive compensation. However, the
Executive’s salary shall not be reduced. The
Executive’s salary, as the same may be increased from time to
time, is referred to in this Agreement as the “ Base
Salary .”
2.2
Benefit Plans and Perquisites . The Executive
shall be entitled throughout the term of this Agreement to
participate in any and all officer or employee compensation, bonus,
incentive, and benefit plans in effect from time to time, including
without limitation stock option and other stock-based compensation,
incentive, bonus, or purchase plans existing on the date of this
Agreement or adopted during the term of this Agreement and plans
providing pension, medical, dental, disability, and group life
benefits, including the Employer’s 401(k) plan, and to
receive any and all other fringe benefits provided from time to
time, provided that the Executive satisfies the eligibility
requirements for any such plans or benefits. Without
limiting the generality of the foregoing, the Executive shall be
entitled to reimbursement for all reasonable business expenses
incurred performing the Executive’s obligations under this
Agreement, including but not limited to all reasonable business
travel and entertainment expenses incurred while acting at the
request of or in the service of the Employer and reasonable
expenses for attendance at annual and other periodic meetings of
trade associations.
2.3
Vacation . The Executive shall be entitled to
paid annual vacation and sick leave in accordance with the policies
established from time to time by the Employer, but in no event
fewer than four weeks of vacation per year. The
Executive shall schedule at least five consecutive days of vacation
per year. The timing of vacations shall be scheduled in
a reasonable manner by the Executive. The Executive
shall not be entitled to any additional compensation for failure to
use allotted vacation or sick leave nor shall the Executive be
entitled to accumulate unused sick leave from one year to the next,
unless authorized by the Employer’s board of directors to do
so.
2.4
Indemnification and Insurance . (a)
Indemnification . The Employer shall indemnify
the Executive or cause the Executive to be indemnified for the
Executive’s activities as a director, officer, employee, or
agent of the Employer or as a person who is serving or has served
at the request of the Employer (a “
representative ”) as a director, officer,
employee, agent, or trustee of an affiliated corporation, joint
venture, trust or other enterprise, domestic or foreign, in which
the Employer has a direct or indirect ownership interest against
expenses (including without limitation attorneys’ fees,
judgments, fines, and amounts paid in settlement) actually and
reasonably incurred (“ Expenses ”) in
connection with any claim against the Executive that is the subject
of any threatened, pending, or completed action, suit, or other
type of proceeding, whether civil, criminal, administrative,
investigative, or otherwise and whether formal or informal (a
“ Proceeding ”), to which the Executive
was, is, or is threatened to be made a party by reason of the
Executive being or having been such a director, officer, employee,
agent, or representative.
The
indemnification provided herein shall not be exclusive of any other
indemnification or right to which the Executive may be entitled and
shall continue after the Executive has ceased to occupy a position
as an officer, director, employee, agent, or representative with
respect to Proceedings relating to or arising out of the
Executive’s acts or omissions during the Executive’s
service in such position. The indemnification provided
to the Executive under this Agreement for the Executive’s
service as a representative shall be payable if and only if and
only to the extent that reimbursement to the Executive by the
affiliated entity with which the Executive has served as a
representative, whether pursuant to agreement, applicable law,
articles of incorporation or association, by-laws or regulations of
the entity, or insurance maintained by such affiliated entity, is
insufficient to compensate the Executive for Expenses actually
incurred and otherwise payable by the Employer under this
Agreement. Any payments in fact made to or on behalf of
the Executive directly or indirectly by the affiliated entity with
which the Executive served as a representative shall reduce the
obligation of the Employer hereunder.
(b)
Exclusions . Despite anything herein to the
contrary, however, nothing in this section 2.4 requires
indemnification, reimbursement, or payment by the Employer, and the
Executive shall not be entitled to demand indemnification,
reimbursement, or payment –
1) if
and to the extent indemnification, reimbursement, or payment
constitutes a “prohibited indemnification payment”
within the meaning of Federal Deposit Insurance Corporation Rule
359.1(l)(1) [12 CFR 359.1(l)(1)], or
2) for
any claim or any part thereof for which the Executive shall have
been determined by a court of competent jurisdiction, from which no
appeal is or can be taken, by clear and convincing evidence, to
have acted with deliberate intent to cause injury to the Employer
or with reckless disregard for the Employer’s best interests,
or
3) for
any claim or any part thereof arising under section 16(b) of the
Securities Exchange Act of 1934 as a result of which the Executive
is required to pay any penalty, fine, settlement, or judgment,
or
4) for
any obligation of the Executive based upon or attributable to the
Executive gaining in fact any personal gain, profit, or advantage
to which the Executive was not entitled, or
5) any
proceeding initiated by the Executive without the consent or
authorization of the Employer’s board of directors, but this
exclusion shall not apply to any claims brought by the Executive (
x ) to enforce the Executive’s rights under this
Agreement, or ( y ) in any Proceeding initiated by another
person or entity whether or not such claims were brought by the
Executive against a person or entity who was otherwise a party to
such proceeding.
(c)
Insurance . The Employer shall maintain or cause
to be maintained liability insurance covering the Executive
throughout the term of this Agreement.
Article
3
Termination
3.1
Termination Because of Death or Disability
. (a) Death . The
Executive’s employment shall terminate automatically on the
date of the Executive’s death. If the
Executive’s employment terminates because of the
Executive’s death, the Executive’s estate shall receive
any sums due the Executive as Base Salary and reimbursement of
expenses through the end of the month in which death occurred, plus
any bonus earned or accrued through the date of death, including
any unvested amounts awarded for previous years. If the
Executive dies in active service to the Employer, for 12 months
after the Executive’s death the Employer shall assist the
Executive’s family with continuing health care coverage under
COBRA substantially identical to that provided for the Executive
before death.
(b)
Disability . By delivery of written notice 30
days in advance to the Executive, the Employer may terminate the
Executive’s employment if the Executive is
disabled. For purposes of this Agreement the Executive
shall be deemed to be “ disabled ” if an
independent physician selected by the Employer and reasonably
acceptable to the Executive or the Executive’s legal
representative determines that, because of illness or accident, the
Executive is unable to perform the Executive’s duties and
will be unable to perform the Executive’s duties for a period
of 90 consecutive days. The Executive shall not be
deemed to be disabled, however, if the Executive returns to work on
a full-time basis within 30 days after the Employer gives notice of
termination because of disability. If the Executive is
terminated by either of the Corporation or the Bank because of
disability, the Executive’s employment with the other shall
also terminate at the same time. During the period of
incapacity leading up to termination of the Executive’s
employment under this provision, the Employer shall continue to pay
the full Base Salary at the rate then in effect and all perquisites
and other benefits (other than bonus) until the Executive becomes
eligible for benefits under any disability plan or
insura
