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Exhibit 10.5
EMPLOYEE CONSULTATION, POST-RETIREMENT,
NON-COMPETITION AND
DEATH BENEFIT AGREEMENT
THIS EMPLOYEE CONSULTATION, POST-RETIREMENT NON-COMPETITION AND
DEATH BENEFIT AGREEMENT ("Agreement") is made and entered into
effective as of the 14th day of September, 2005 ("Effective Date"),
by and between FIRST-CITIZENS BANK & TRUST COMPANY
, a North Carolina banking corporation with its principal office in
Raleigh, North Carolina ("Employer") and CAROL B. YOCHEM
("Employee");
W I T N E S S E T H
WHEREAS , Employee is an employee of
Employer who has provided guidance, leadership and direction in the
growth, management and development of Employer and has learned
trade secrets, confidential procedures and information, and
technical and sensitive plans of Employer; and,
WHEREAS , Employer desires to limit Employee’s
availability to other employers or entities which are in
competition with Employer following Employee’s retirement
from employment with Employer; and,
WHEREAS , Employer has offered to Employee a
non-competition arrangement and a consultation arrangement together
with a death benefit arrangement for Employee’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, Employee and Employer
hereby agree as follows:
1. Consultation Payments . Following
Employee’s "Retirement" (as defined below) from
Employee’s employment with Employer on the Retirement Date
(as defined below), Employer shall pay to Employee the sum of TWO
THOUSAND EIGHT HUNDRED SEVENTY-FIVE and 00/100 Dollars ($2,875.00)
per month, beginning six months and one week after
Employee’s Retirement for a period of ten (10) years
following Employee’s Retirement or until Employee’s
death, whichever first occurs ("Consultation Payments"). Such
monthly payments shall be paid for and in
consideration of Employee’s support, sponsorship, advisory
and other services provided to Employer ("Consultation Services");
such sum to be payable to Employee whether or not Employee’s
Consultation Services are utilized in said month by Employer.
Except as set forth below, Consultation Payments hereunder shall be
payable each month without deductions and Employee 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 Employee, Employee will provide Consultation Services as an
independent contractor to Employer, as and when Employer may
request, which services may be provided with respect to all phases
of Employer’s business and particularly those phases in which
Employee has particular expertise and knowledge. Employee’s
services shall be limited to those of an independent consultant,
shall not be on a day-to-day regularly scheduled operational basis
and shall be provided only when Employee is reasonably available
and willing, which willingness will not be unreasonably withheld.
Employer shall make available to Employee such office space and
equipment as are reasonably necessary for Employee to carry out the
obligations under this Agreement and shall reimburse Employee for
any extraordinary expenses incurred in carrying out the obligations
hereunder.
Effective as of Employee’s Retirement date, Employee and
Employer agree that Employee shall be, under the terms of this
Agreement, an independent contractor, and Employee agrees that
Employee’s rights and privileges and obligations are only as
provided in this Agreement as to matters covered herein.
Notwithstanding the foregoing, if Employer 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.
If Employee should die during the ten-year period during which
Consultation Payments are being made under this Paragraph 1,
then those payments shall terminate and future payments, if any,
shall be made to Employee’s designated beneficiary(ies) or
Employee’s estate in accordance with the provisions of
Paragraph 3 of this Agreement.
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As used in this Agreement, the term "Retirement"
shall mean a termination of Employee’s employment with
Employer which is treated as a "retirement" under the terms of
Employer’s defined benefit pension plan, and which occurs no
later than the last day of the calendar month in which Employee
attains the age of sixty-five (65) (the "Retirement Date"), or
such other termination of Employee’s employment as Employer
and Employee shall agree in writing to treat as "Retirement" for
purposes of this Agreement. Employer and Employee hereby
acknowledge that compulsory retirement is not enforceable except as
provided by law. Employer and Employee further agree that no
provision herein shall be construed as requiring Employee’s
retirement except as may now or hereafter be permitted by
law.
2. Non-competition Payments . Following
Employee’s Retirement from his employment with Employer on
the Retirement Date, Employer shall pay to Employee the sum of
EIGHT THOUSAND SIX HUNDRED TWENTY-FIVE and 00/100 Dollars
($8,625.00) per month, beginning six months and one week after
Employee’s Retirement for a period of ten (10) years
following Employee’s Retirement or until Employee’s
death, whichever first occurs. Such monthly payments shall be paid
for and in consideration of Employee’s agreement in this
Paragraph 2 (Employee’s "Covenant Not To Compete"). Payments
hereunder ("Non-competition Payments") shall be payable each month
without deductions and Employee agrees to be solely responsible for
the payment of all income or other taxes or assessments, if any,
applicable on those payments.
For and in consideration of monthly Non-competition Payments to
Employee, Employee 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 Employer is performing at the time of
Employee’s Retirement, nor will Employee 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 Employer, whether done directly or
indirectly, in ownership, consultation, employment or otherwise.
Employee agrees not to reveal to outside sources, without the
consent of Employer, any matters, the revealing of which could, in
any manner, adversely affect or disclose Employer’s business
or any part thereof, unless required by law to do so. This Covenant
Not To Compete by Employee is limited to the geographic area
consisting of each county or like jurisdictional entity in which
either Employer or any banking or investment entity owned directly
or indirectly by the
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parent of Employer shall maintain a banking or
other business office at the time of Employee’s Retirement,
shall exist for and during the term of all payments to be made
under this Paragraph 2, whether made directly by Employer or as
otherwise provided herein, and shall not prevent Employee 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 Employer.
Employee acknowledges that the remedy at law for breach of
Employee’s Covenant Not To Compete will be inadequate and
that Employer shall be entitled to injunctive relief as to any
violation thereof; however, nothing herein shall be construed as
prohibiting Employer from pursuing any other remedies available to
it, in addition to injunctive relief, whether at law or in equity,
including the recovery of damages. In the event Employee shall
breach any condition of Employee’s Covenant Not To Compete,
then Employee’s right to any of the payments becoming due
under Paragraphs 1 and 2 of this Agreement after the date of
such breach shall be forever forfeited and the right of
Employee’s designated beneficiary(ies) or Employee’s
estate to any payments under this Agreement shall likewise be
forever forfeited. This forfeiture is in addition to and not in
lieu of any of the above-described remedies of Employer and shall
be in addition to any injunctive or other relief as described
herein. Employee further acknowledges that any breach of
Employee’s Covenant Not To Compete shall be deemed a material
breach of this Agreement.
Notwithstanding the foregoing, if Employer determines that the
Non-Competition Payments are compensation for other than payments
for Non-competition, and 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,
the said payments shall be subject to the required
withholdings.
If Employee should die during the ten-year period during which
Non-competition Payments are being made under this Paragraph 2,
then those payments shall terminate and future payments, if any,
shall be made to Employee’s designated beneficiary(ies) or
Employee’s estate in accordance with the provisions of
Paragraph 3 of this Agreement.
3. Continuation of Payments . Following
Employee’s death during the original ten-year period of
payments under Paragraphs 1 and 2 above, the sum of ELEVEN THOUSAND
FIVE HUNDRED and 00/100 Dollars ($11,500.00) per month shall be
paid to such individual or individuals as Employee shall have
designated in writing as his
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beneficiary(ies) as provided in Paragraph 11
below or, in the absence of such designation, to Employee’s
estate, as applicable, beginning the first calendar month following
the date of Employee’s death and continuing thereafter until
the expiration of said original ten-year period. Once the
Consultation Payments and Non-competition Payments have begun,
whether paid by Employer or as otherwise provided herein, the
maximum payment period under this Agreement shall be ten
(10) years. Payments hereunder shall be payable each month
without deductions and the recipient shall be solely responsible
for the payment of all income and other taxes and assessments, if
any, applicable on those payments.
Notwithstanding the foregoing, if Employer determines that the
Consultation Payments and/or Non-competition Payments are
compensation such that the payments are subject to any and all
applicable withholding, Social Security, employment, income and
other taxes or assessments, if any, under the applicable tax law,
said payment shall be subject to the required withholdings.
4. Death Benefits . In the event Employee
dies while employed by Employer prior to Employee’s
Retirement Date or dies within six months and one week after
Employee’s Retirement Date, Employer will pay the sum of
ELEVEN THOUSAND FIVE HUNDRED and 00/100 Dollars ($11,500.00)
per month for a period of ten (10) years, to such individual
or individuals as Employee shall have designated in writing as his
beneficiary(ies) as provided in Paragraph 11 below or, in the
absence of such designation, to Employee’s estate, as
applicable. The first payment shall be made not later than
two months following Employee’s death. Payments under
this Paragraph 4 shall be payable each month without deductions and
the recipient shall be solely responsible for the payment of all
income and other taxes and assessments, if any, applicable on those
payments.
Notwithstanding the foregoing, if Employer determines that the
Consultation Payments and/or Non-competition Payments are
compensation such that the payments are subject to any and all
applicable withholding, Social Security, employment, income and
other taxes or assessments, if any, under the applicable law, said
payments shall be subject to the required withholdings.
5. Forfeiture of Benefits . This Agreement is
subject to termination by Employer at any time and without stated
cause. In the event Employer shall terminate this Agreement,
Employee shall forfeit all rights to receive any payment provided
for herein.
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Likewise, in the event Employee’s
employment is terminated, either voluntarily or involuntarily, for
reasons other than his death or Retirement
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