Separation and Release
Agreement
This Separation and Release
Agreement (“Agreement”) is entered into as of December
10, 2008 by and between Kendall L. Spencer
(“Executive”), Carolina First Bank (the
“Company”) and The South Financial Group, Inc.
(“TSFG”). The Company is a wholly-owned subsidiary of
TSFG. Where the context permits, (i) “TSFG” includes
TSFG and its affiliated subsidiary entities, including the Company,
and (ii) “Company” includes the Company and its
affiliated corporate entities, including TSFG.
Recitals
On February 25, 2008, Executive and
the Company entered into a Noncompetition, Severance and Employment
Agreement (the “Employment Agreement”). The parties are
mutually agreeing to terminate Executive’s employment
relationship, all upon the terms set forth herein.
Agreement
In consideration of the mutual
covenants contained herein, and other good and valuable
consideration, the parties agree as follows:
1.
Termination of
Employment . The parties
agree that Executive’s last day of employment will be
February 15, 2009 (the “Severance Date”). From the date
hereof through the Severance Date, Executive will perform such
duties as are assigned to him by the Chief Executive Officer of
TSFG, which duties shall be reasonably consistent with those of an
executive vice president of the Company.
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2.
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Severance Payments and Other
Compensatory Matters .
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(a)
As soon as practicable following the
date that is six months after the Severance Date, Executive shall
be paid $437,792, payable in a lump sum, less applicable statutory
deductions.
(b)
Any unvested stock options shall
cease to vest as of the Severance Date. Executive shall have until
the earlier of one year from the Severance Date or the expiration
of a stock option’s ten year term to exercise any vested
options. All unvested shares of service-based restricted stock or
restricted stock units issued by the Company to Executive
(including those issued in connection with the 2008 – 2010
program of the Company’s Long Term Incentive Plan), a total
of 12,604 shares, will be vested as of the Severance Date. All
other equity grants which are unvested as of the Severance Date
shall be forfeited.
(c)
No bonuses will be paid to Executive
under the Company’s long term or short term compensation
plans for service in 2008 or 2009.
(d)
The Supplemental Executive
Retirement Plan between Executive and the Company (the
“SERP”) will be deemed to be amended to provide that
Executive’s “Early Termination Benefit” on the
Severance Date will be 33% of his “Benefit Basis” (as
both terms are defined in the SERP).
(e)
The Company will make available to
Executive transition relief under Section 409A with respect to the
SERP, Executive’s deferred compensation account in the
Company’s Deferred Compensation Plan and other compensation
payable hereunder (with the idea that Executive may elect to have
certain amounts paid at an earlier date than currently
elected).
(f)
All matters not specifically
addressed herein which are governed by Company or TSFG
compensation, healthcare, welfare benefit, or other plans shall be
governed by the terms of such plans. Coverage under all such plans,
unless specifically provided herein or therein, shall otherwise
terminate as of the Severance Date.
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3.
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Employment and the Employment
Agreement .
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(a)
As of the Severance Date,
Executive’s service as an officer, employee or otherwise to
the Company shall terminate. The parties agree that the Employment
Agreement shall be of no further force and effect, except that (a)
Sections 8, 9, 12 and 13 (and any other provisions necessary to
construe such Sections of the Employment Agreement) shall continue
in full force and effect in accordance with their terms, except as
expressly amended herein.
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(b)
Section 8 of the Employment
Agreement shall survive the termination of Executive’s
employment with the Company for the applicable statute of
limitations.
(c)
Section 9 of the Employment
Agreement is amended and restated to read as follows (and shall
survive the termination of employment):
9.1
During the term hereof and for the
period from Executive’s of termination of employment through
May 15, 2010 (the “Non-Piracy Period”), Executive shall
not directly or indirectly, either as an independent contractor,
employee, consultant, agent, partner, joint venturer or otherwise
through another person or entity, including but not limited to a
competitor, (i) solicit, attempt to solicit, service, or attempt to
service any Customer with respect to banking, financial services or
similar matters, or (ii) solicit, induce or employ (or aid any
person or entity in doing so) any employee of Company or in any way
interfere with the relationship between Company and any employee
thereof. A “Customer” shall mean any person or entity
to whom the Company was rendering services at the time of
termination of Employee’s employment with the Company or the
six month period prior thereto.
9.2
If, at the time of enforcement of
this Section 9, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances
then existing, the parties agree that the maximum duration, scope
or area reasonable under such circumstances shall be substituted
for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law and that such
revised restrictions may be enforced against Executive.
9.3
In the event of the breach or a
threatened breach by Executive of any of the provisions of Section
9.1, the Company, in addition and supplementary to other rights and
remedies existing in its favor, may apply to any court of law or
equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or
other security).
9.4
The Non-Piracy Period shall be
extended commensurately for any period of time during which the
covenants set forth in this Section 9 are contested. Executive
agrees that the restrictions contained in this Section 9 are
reasonable.
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4.
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Non-disparagement;
Cooperation .
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(a)
Executive will refrain from taking
any action or making any statements, written or oral, which are
intended to or which disparage the business, goodwill, or
reputation of the Company or any its affiliated corporations or
their respective directors, officers, executives, or other
employees (except to the extent required by applicable law,
including under applicable securities laws). The Company shall use
its reasonable best efforts to ensure that no member of the Board
and none of the Company’s senior executive officers (so long
as such officer serves as such) take any action or make any
statements, written or oral, which are intended to or which
disparage the business, goodwill, or reputation of Executive
(except to the extent required by applicable law, including under
applicable securities laws).
(b)
Executive shall provide
Executive’s reasonable cooperation in connection with any
action or proceeding (or any appeal from any action or proceeding)
or other legal matter which relates to events occurring during
Executive’s employment with the Company or TSFG. The Company
agrees to pay reasonable expenses incurred by Executive in
fulfilling is obligations under this Section 3(b) of the Agreement,
including, but not limited to, reasonable travel and accommodation
expenses.
5.
General
Release. In
exchange for the payments and covenants set forth herein, Executive
agrees as follows (this “General Release”):
(a)
On behalf of Executive, his agents,
assignees, attorneys, heirs, executors, and administrators,
Executive hereby releases TSFG and its predecessors, successors and
assigns, its and their current and former parents, affiliates,
subsidiaries, divisions, and joint ventures (individually and
collectively, for purposes of this paragraph, “TSFG”);
and all of their current and former officers, directors, employees,
and agents, in their capacity as TSFG representatives (individually
and collectively, “Releasees”) from any and all
controversies, claims, demands, promises, actions, suits,
grievances, proceedings, complaints, charges, liabilities, damages,
debts, taxes, allowances, and remedies of any type, including, but
not limited to, those arising out of his employment with the
Company (individually and collectively, “Claims”) that
Executive may have by reason of
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any matter, cause, act, or
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