This NonCompetition Agreement involves
Title: NONCOMPETE AGREEMENT
Governing Law: South Carolina Date: 6/1/2016
Industry: Regional Banks Law Firm: Nelson Mullins Sector: Financial
THIS NONCOMPETE AGREEMENT (this “Agreement”) dated as of May 26, 2016, is made by and among HCSB Financial Corporation , a South Carolina corporation (the “Company”), Horry County State Bank , a South Carolina state-chartered commercial bank, which is a wholly owned subsidiary of the Company (the “Bank” and collectively with the Company, the “Employer”), and Janet H. Hollar , an individual resident of South Carolina (the “Executive”).
WHEREAS, Executive is presently employed as the Chief Executive Officer of the Company and the Bank, having been hired to such positions on April 11, 2016 pursuant to the terms of that certain employment agreement between the Executive, the Bank, and the Company (the “Employment Agreement”) entered into on or about the date hereof.
WHEREAS, during the course of her employment, Executive will develop relationships with employees and customers of the Employer, which the Employer desires to protect following the termination of the Executive’s employment with the Employer.
WHEREAS, the Executive acknowledges that (i) the Employer invests significant time, effort, and resources in obtaining customers of the Bank, (ii) the Employer’s success depends upon obtaining, developing, and maintaining its customer base, (iii) the Executive’s contact with customers in performing services under the Employment Agreement constitutes a position of trust which may result in the establishment of a relationship whereby the Executive could influence the future actions of customers relative to continued support and investment and as a customer of the Bank, and (iv) that if a business relationship between the Employer and a customer at which or for whom the Executive performed services under the Employment Agreement is terminated because the Executive solicited or agreed to perform similar services as provided for under the Employment Agreement, then the Employer would be damaged and the solicitation by the Executive would constitute a breach of trust and duty of loyalty by the Executive and an interference with the relationship between the customer and the Employer.
WHEREAS, the Executive is willing to forego her rights to compete with the Employer for a period of one year following the termination of the Executive’s employment with the Employer for that certain consideration stated below.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements set forth in this Agreement, and other good and valuable consideration the receipt, mutuality and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Restrictive Covenants .
(a) No Solicitation of Customers . During the Executive’s employment with the Employer and for a period of 12 months thereafter, the Executive shall not (except on behalf of or with the prior written consent of the Employer), either directly or indirectly, on the Executive’s own behalf or in the service or on behalf of others, (i) solicit, divert, or appropriate to or for a Competing Business, or (ii) attempt to solicit, divert, or appropriate to or for a Competing Business any person or entity that is or was a customer of the Company or any of its Affiliates on the date of termination and with whom the Executive has had material contact.
(b) No Recruitment of Personnel . During the Executive’s employment with the Employer and for a period of 12 months thereafter, the Executive shall not, either directly or indirectly, on the Executive’s own behalf or in the service or on behalf of others, (i) solicit, divert or hire away; or (ii) attempt to solicit, divert, or hire away to any Competing Business, any employee of or consultant to the Company or any of its Affiliates engaged or experienced in the Business, regardless of whether the employee or consultant is full-time or temporary, the employment or engagement is pursuant to written agreement, or the employment is for a determined period or is at will.
(c) Non-Competition Agreement . During the Executive’s employment with the Employer and for a period of 12 months thereafter, the Executive shall not (without the prior written consent of the Employer) compete with the Company or any of its Affiliates by, directly or indirectly, forming, serving as an organizer, director or officer of, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company therefor if such depository institution or holding company has one or more offices or branches located in the Territory. Notwithstanding the foregoing, the Executive may serve as an officer of or consultant to a depository institution or holding company therefor even though such institution operates one or more offices or branches in the Territory, if the Executive’s employment does not directly involve, in whole or in part, the depository financial institution’s or holding company’s operations in the Territory.
(d) Geographic Scope . The restrictions on competition set forth in Section 1 shall apply to the Executive’s activities within the Territory. However, the restrictions are intended to apply only with respect to personal activities of Executive within the Territory and shall not deemed to apply if Executive is employed by an entity that has branch offices within the Territory but Executive does not personally work in or have any business contacts with persons in the Territory.
(e) Enforceability of Covenants. Executive acknowledges that the term, geographic area, and scope of the covenants set forth in this Agreement are reasonable, and agrees that she will not, in any action, suit or other proceeding, deny the reasonableness of, or assert the unreasonableness of, the premises, consideration or scope of the covenants set forth herein. Executive agrees that her position as employee of the Employer, involves duties and authority relating to all aspects of the Business and all of the Territory. Executive further acknowledges that complying with the provisions contained in this Agreement will not preclude her from engaging in a lawful profession, trade or business, or from becoming gainfully employed. Executive and Employer agree that Executive’s obligations under the above covenants are separate and distinct under this Agreement, and the failure or alleged failure of the Employer to perform its obligations under any other provisions of this Agreement shall not constitute a defense to the enforceability of this covenant. It is the intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void, or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced. Executive acknowledges and agrees that any breach or threatened breach of this covenant will result in irreparable damage and injury to the Employer and that Employer will be entitled to exercise all rights including, without limitation, obtaining one or more temporary restraining orders, injunctive relief and other equitable relief, including specific performance in the event of any breach or threatened breach of this Agreement, in any federal or state court of competent jurisdiction in South Carolina without the necessity of posting any bond or security (all of which are waived by the Executive), and to exercise all other rights or remedies, at law or in equity, including, without limitation, the rights to damages. The Executive and the Employer hereby agree that they will negotiate in good faith to amend this Agreement from time to time to modify the terms of Sections 1(a), 1(b) and 1(c) and the definition of the term “Business,” to reflect changes in the Employer’s business affairs so that the scope of the limitations placed on the Executive’s activities by Section 1 accomplishes the parties’ intent in relation to the then current facts and circumstances. Any such amendment shall be effective only when completed in writing and signed by the Executive and the Employer.
2. Extension of Term of Restrictions . If the Executive violates any of the restrictions set forth in Section 1 of this Agreement, the duration of such restriction shall be extended by a number of days equal to the number of days in which the Executive shall have been determined to be or shall have admitted to being in violation