Exhibit 10.5
SECOND AMENDED AND RESTATED
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS SECOND AMENDED AND RESTATED
EMPLOYMENT AND NONCOMPETITION AGREEMENT (this “Agreement”), dated as of
December 31, 2008, by and between ROBERT R. HILL, JR. ,
an individual resident of Richland County, South Carolina
(“Employee”), and SCBT FINANCIAL CORPORATION , a
bank holding corporation organized under the laws of South Carolina
(the “Company”).
Background
Statement
The board of directors of the
Company (the “Board”) believes it is in the best
interest of the Company and its subsidiaries to restrict
competition with the Company and its subsidiaries by key management
personnel upon termination of their employment. For the
purpose of establishing certain terms of Employee’s
employment with the Company, the Company and the Employee entered
into an Employment Agreement on September 30, 1999. On
May 6, 2006, the Company and Employee entered into an Amended
and Restated Employment Agreement in order to, among other things,
extend the term of the original Employment Agreement and provide
additional benefits to Employee. The purpose of this second
amendment and restatement is to further revise the employment
arrangement so that amounts of compensation potentially due to
Employee hereunder either comply with, or are exempt from, Internal
Revenue Code Section 409A.
Statement of
Agreement
In consideration of the mutual
covenants herein, Employee and the Company agree as
follows:
1.
Employment . The Company agrees to
employ Employee, and Employee agrees to serve the Company, upon the
terms and conditions set forth in this Agreement.
2.
Term of Employment . The term of
Employee’s employment hereunder shall commence immediately
upon the date hereof and shall continue until the third anniversary
of the date hereof, unless terminated earlier as provided in
Section 6 or 7 hereof (the “Term”); provided,
however, that on each anniversary date of this Agreement, the Term
shall be extended for one year (so that on each anniversary date
the Term will be three years) unless at least sixty (60) days prior
to any such anniversary date either party gives to the other notice
in writing of non-renewal.
3.
Position and Responsibilities . During the period of
employment hereunder, Employee shall serve as, and with the title,
office, and authority of, President and Chief Executive Officer of
the Company and Chief Executive Officer of SCBT, N.A. (the
“Bank”), and shall report to the Board and the board of
directors of the Bank (the “Bank Board”).
Employee
NOTICE
THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE UNIFORM ARBITRATION ACT AS ADOPTED IN SOUTH CAROLINA AT
SECTION 15-48-10 THROUGH SECTION 15-48-240, SOUTH CAROLINA CODE OF
LAWS (1976, AS AMENDED).
shall have the duties,
responsibilities, rights, power and authority as President and
Chief Executive Officer of the Company and Chief Executive Officer
of the Bank that may from time to time be delegated or assigned to
him by the Board and the Bank Board.
4.
Duties . During the period of
employment hereunder, Employee shall devote substantially all of
his business time, attention, skills and efforts to the business of
the Company and the Bank and the faithful performance of his duties
and responsibilities hereunder. Employee shall be loyal to
the Company and the Bank and shall refrain from rendering any
business services to any person or entity other than the Company
and its affiliates without the prior written consent of the
Company. Employee may, and is encouraged to, participate in
such civic, charitable, and community activities that do not
substantially interfere with the performance of his duties under
this Agreement. Employee shall be permitted to make private
investments so long as these investments do not materially and
adversely affect his employment hereunder.
5.
Compensation and Benefits . For all services
rendered by Employee to the Company hereunder, the Company shall
compensate Employee as follows:
(a)
Base Salary . During the
period of employment hereunder, the Company shall pay Employee an
annual salary (as increased by the Company from time to time in its
sole discretion, the “Base Salary”), which currently is
$408,000 per year, subject to applicable federal and state income
and social security tax withholding requirements. The Base
Salary shall be payable in accordance with the Company’s
customary payroll practices.
(b)
Reimbursement of Expenses .
The Company shall pay or reimburse Employee for all reasonable
travel and other business related expenses incurred by him in
performing his duties under this Agreement. Such expenses
shall be appropriately documented and submitted to the Company in
accordance with the Company’s policies and procedures as
established from time to time. The Company shall make all
reimbursements to Employee under this paragraph no later than
March 15 of the year following the year in which Employee
incurred the related expense.
(c)
Vacation and Sick Leave .
Employee shall be provided with vacation and sick leave in
accordance with the Company’s policies and procedures for
senior executives as established from time to time.
(d)
Employee Benefit Plans .
During the period of employment hereunder, Employee shall be
entitled to participate in the employee benefit plans of the
Company or its successors or assigns, as presently in effect or as
they may be modified or added to from time to time, to the extent
such benefit plans are provided to other senior
executives.
(e)
Incentive Bonus Plans .
During the period of employment hereunder, Employee shall be
entitled to participate in the Company’s incentive-based
bonus plans, applicable to his employment position, in accordance
with both the terms and conditions of such plans and the
Company’s policies and procedures as established from time to
time.
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(f)
Other Fringe Benefits .
During the period of employment hereunder, the Company shall
(i) provide Employee with the use of an automobile,
(ii) reimburse Employee for the expense of his attendance at
such meetings and conventions as may be approved by the Board, and
(iii) reimburse Employee for Country Club and such other dues
and fees as may be approved by the Board. The Company shall
make all reimbursements to Employee under this paragraph no later
than March 15 of the year following the year in which Employee
incurred the related expense.
(g)
Total Compensation.
Employee’s Base Salary, the greater of Employee’s
annual bonus for the fiscal year preceding the fiscal year in which
Employee’s employment terminates or the average bonus for the
five years preceding the year of termination, Employee’s
health, medical and dental insurance, and the fringe benefits
provided in Subsection (f) of this Section 5 (or a lump
sum payment equal to the value of such benefits without commutation
to present value) are together hereinafter referred to as
Employee’s “Total Compensation.” Total
Compensation does not include any payments under the
Company’s long term incentive program paid in Company common
stock.
6.
Termination of Employment .
(a)
Termination Upon Death, Disability, or For Cause . The Company shall have the right to
terminate Employee’s employment hereunder upon the death or
Disability (as defined below) of Employee or for Cause (as defined
below). If Employee’s employment is terminated upon
Employee’s death or Disability, the Company will pay to or
for the benefit of Employee or his estate an amount equal to
Employee’s Total Compensation for the twelve month period
preceding death or Disability in a lump sum, and in the case of
Disability the Company will continue Employee’s health,
medical, and dental insurance coverages for such twelve month
period on the same basis as in effect on the date of
Disability. If Employee’s employment is terminated for
Cause, the Company shall have no further obligation to Employee
under this Agreement. Termination for Disability or for Cause
shall be effective immediately or upon notice to Employee of such
termination as may be determined by the Board. For purposes
of this Agreement:
(i)
“Termination” means a termination that qualifies as a
“separation from service” under Treasury Regulation
Section 1.409A-1(h) and occurs when the level of bona
fide services that Employee is performing for the Company has
decreased to a level equal to 20% or less of the average level of
services performed by Employee during the immediately preceding
36-month period (or the full period of service with the Company, if
less than 36 months).
(ii)
“Disability” means “disability” (as defined
under the Company’s disability insurance policy maintained
for Bank executives from time to time) suffered by Employee for a
continuous period of at least six months or any impairment of mind
or body that is likely to result in a “disability” of
Employee for more than three months during any twelve-month
period.
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(iii)
“Cause” means: (A) the repeated failure of
Employee to perform his responsibilities and duties hereunder after
Employee has been given written notice by the Chairman of the Board
specifying in general the reasons Employee is failing to perform
his duties and responsibilities hereunder, (B) the commission
of an act by Employee constituting dishonesty or fraud against the
Company or any of its affiliates; (C) the conviction for or
the entering of a guilty or no contest plea with respect to a
felony; (D) habitual absenteeism, reporting to work under the
influence of alcohol or unlawful use of controlled substances; or
(E) the commission of an act by Employee involving gross
negligence or moral turpitude that brings the Company or any of its
affiliates into public disrepute or disgrace or causes material
harm to the customer relations, operations or business prospects of
the Company or any of its affiliates.
In the event of the termination of
Employee’s employment for Cause under this
Section 6(a) , Employee shall be entitled only to the
Base Salary earned through the date of termination.
(b)
Termination Without Cause .
The Company shall have the right to terminate Employee’s
employment at any time and for any reason subject to the provisions
of this Section 6(b). In the event that the Company
shall terminate Employee’s employment for any reason other
than as provided in Section 6(a), the Company shall as its
sole obligation hereunder continue to pay to Employee his
Total Compensation, subject to applicable federal and state income
and social security tax withholding requirements and in accordance
with the Company’s customary payroll practices, and shall
continue Employee’s health, medical and dental insurance and
other benefits on the same basis as in effect at the time of
termination, in each case during the twelve month period following
termination. In addition, Employee shall receive compensation
for two years for Employee’s covenant not to compete with the
Company as provided in Section 9(f) below.
(c)
Termination by Employee for Good Reason . Employee shall have the right to
terminate his employment hereunder for Good Reason. For
purposes of this Agreement, “Good Reason” shall mean,
without Employee’s express written consent, the occurrence of
any of the following circumstances unless such circumstances are
fully corrected within thirty days after Employee notifies the
Company in writing of the existence of such circumstances as
hereinafter provided:
(i)
the assignment to Employee of any duties, functions or
responsibilities other than those contemplated by Section 3
hereof or materially inconsistent with the position with the
Company that Employee held immediately prior to the assignment of
such duties or responsibilities or any adverse alteration in the
nature or status of Employee’s responsibilities or the
condition of Employee’s employment from those contemplated in
Section 3 hereof;
(ii)
a material reduction by the Company in Employee’s total
compensation as in effect on the date hereof or as it may be
increased from time to time, except for across-the-board salary
reductions similarly affecting all management personnel of the
Company;
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(iii)
the relocation of the Company’s headquarters to a location
more than fifty miles from its current location in Columbia, South
Carolina, or the Company’s requiring Employee to be based
anywhere other than the Company’s offices at such location,
except for required travel on Company business;
(iv)
the failure by the Company to pay Employee any portion of
Employee’s compensation within the time guidelines
established pursuant to standard Company policies, or any other
material breach by the Company of any other material provision of
this Agreement; or
(v)
the giving of notice by the Company of non-renewal of this
Agreement pursuant to Section 2 hereof, it being acknowledged
by the parties that such non-renewal would materially reduce the
compensation payable to Employee under certain
circumstances.
Employee shall notify the Company in
writing that he believes that one or more of the circumstances
described above exists, and of his intention to terminate this
Agreement for Good Reason as a result thereof, within sixty days of
the time that he gains knowledge of such circumstances.
Employee shall not deliver a notice of termination of this
Agreement until thirty days after he delivers the notice described
in the preceding sentence, and Employee may do so only if the
circumstances described in such notice have not been corrected in
all material respects by the Company.
In the event Employee terminates his
employment pursuant to this Section 6(c) for Good Reason,
and subject to Section 7(a) below in the event of
termination within two years after a Change of Control, the Company
shall continue to pay to Employee his Total Compensation, subject
to applicable federal and state income and social security tax
withholding and in accordance with the Company’s customary
payroll practices, and shall continue Employee’s health,
medical and dental insurance and other benefits on the same basis
as in effect at the time of such termination, in each case during
the twelve month period following termination of employment.
In addition, Employee shall receive compensation for two years for
Employee’s covenant not to compete with the Company as
provided in Section 9(f) below.
(d)
If the amount otherwise payable to
Employee under Section 6(b) or
Section 6(c) during the first six months following the
date of his termination exceeds the Threshold Amount (defined
below), the Company shall pay during the first six months following
the date of termination a portion of the amount otherwise payable
under Section 6(b) or Section 6(c) in such
six-month period not exceeding the Threshold Amount, and pay in a
single lump sum on the first day after such six-month period any
previously unpaid portion otherwise payable during such six-month
period. The “Threshold Amount” is an amount equal
to two times the maximum amount that may be taken into account
under a qualified plan pursuant to Internal Revenue Code
Section 401(a)(17) for the year in which the termination
occurred.
(e)
Termination by Employee without Good Reason . Employee shall have the right at any
time voluntarily to terminate his employment and this Agreement, in
which case (except as otherwise provided in
Section 6(c) above) Employee shall be entitled only
to
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Employee’s Base Salary through the date
of termination, plus Employee’s Total Compensation for two
years for Employee’s covenant not to compete with the Company
as provided in Section 9(f) below.
(f)
Resignation from Boards .
Upon termination of Employee’s employment for any reason,
Employee by execution of this Agreement resigns as a member of the
Board and the Bank Board, such resignation to be effective
immediately at the time Employee’s employment
terminates.
7.
Change of Control .
(a)
If
(i)
a Change of Control (as defined below) occurs during the Term of
this Agreement or any extension thereof, and
(ii)
(A) Employee’s employment is terminated in anticipation
of a Change of Control, or (B) Employee is employed by the
Company or an affiliate thereof at the time such Change of Control
occurs, and at any time during the two-year period following
such Change of Control,
(1)
Employee is given notice of non-renewal of this Agreement pursuant
to Section 2 hereof, or his employment is terminated by the
Company or an affiliate or successor thereof for any reason other
than for death, Disability or Cause, or
(2)
Employee terminates his employment during the Window Period, as
hereinafter defined, for any reason other than death or Disability,
or Employee terminates his employment for Good Reason,
the Co
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