UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 1, 1997
CCB Financial Corporation
(Exact name of registrant as specified in its charter)
North Carolina 0-12358 56-1347849
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
111 Corcoran Street, Post Office Box 931, Durham, NC 27702
(Address of principal executive offices)
Registrant's telephone number, including area code (919) 683-7777
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On August 1, 1997, the Registrant's merger with American Federal
Bank, FSB ("American Federal"), of Greenville, South Carolina, was
completed. American Federal had assets totaling $1.3 billion as of
June 30, 1997. The transaction, which has an indicated value of
approximately $410.3 million, was consummated through a tax-free
exchange of stock accounted for as a pooling-of-interests. In
accordance with the terms of the merger agreement, .445 shares of the
Registrant's common stock was issued for each share of American
Federal outstanding or approximately 4.9 million shares. American
Federal will continue to operate as a separate subsidiary of the
Registrant.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired
The following financial statements are incorporated by
reference:
(i) Audited consolidated financial statements of American
Federal Bank, FSB as of December 31, 1996 and 1995 and
for the three years ended December 31, 1996 are
incorporated by reference from Exhibit 99.1 of the
Registrant's Current Report on Form 8-K dated April 21,
1997.
(ii) Unaudited interim balance sheets of American Federal
Bank, FSB as of March 31, 1997, December 31, 1996 and
March 31, 1996 and the related unaudited interim
statements of income and cash flows for the three-month
periods ended March 31, 1997 and 1996 are incorporated
by reference from Exhibit 99.1 of the Registrant's
Current Report on Form 8-K dated May 13, 1997.
(b) Pro forma financial information
The following unaudited pro forma financial statements are
incorporated by reference from pages 52 through 58 of the
Registrant's Pre-Effective Amendment No. 1 to Registration
Statement No. 333-25705 on Form S-4:
(i) Pro forma combined condensed balance sheet of CCB
Financial Corporation and subsidiaries as of March 31,
1997.
(ii) Pro forma combined condensed statement of income of CCB
Financial Corporation and subsidiaries for the three-
month period ended March 31, 1997.
(iii) Pro forma combined condensed statement of income of CCB
Financial Corporation and subsidiaries for the three-
month period ended March 31, 1996.
(iv) Pro forma combined condensed statement of income of CCB
Financial Corporation and subsidiaries for the year
ended December 31, 1996.
(v) Pro forma combined condensed statement of income of CCB
Financial Corporation and subsidiaries for the year
ended December 31, 1995.
(vi) Pro forma combined condensed statement of income of CCB
Financial Corporation and subsidiaries for the year
ended December 31, 1994.
(c) Exhibits
2 Agreement and Plan of Reorganization between CCB
Financial Corporation and American Federal Bank, FSB is
incorporated by reference from Appendix A of the
Registrant's Pre-Effective Amendment No. 1 to
Registration Statement No. 333-25705 on Form S-4.
10.1 Employment agreement between William L. Abercrombie, Jr.
and CCB Financial Corporation.
10.2 Employment agreement between William L. Abercrombie, Jr.
and American Federal Bank, FSB.
10.3 Employment agreement between Michael A. Trimble and CCB
Financial Corporation.
10.4 Employment agreement between Michael A. Trimble and
American Federal Bank, FSB.
99.1 Press release by CCB Financial Corporation dated August
1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CCB FINANCIAL CORPORATION
Date: August 7, 1997 By: /s/ W. HAROLD PARKER, JR.
W. Harold Parker, Jr.
Senior Vice President and
Controller
EXHIBIT INDEX
Exhibit No.
2 Agreement and Plan of Reorganization between CCB Financial
Corporation and American Federal Bank, FSB is incorporated
by reference from Appendix A of the Registrant's Pre-
Effective Amendment No. 1 to Registration Statement No.
333-25705 on Form S-4.
10.1 Employment agreement between William L. Abercrombie, Jr.
and CCB Financial Corporation.
10.2 Employment agreement between William L. Abercrombie, Jr.
and American Federal Bank, FSB.
10.3 Employment agreement between Michael A. Trimble and CCB
Financial Corporation.
10.4 Employment agreement between Michael A. Trimble and
American Federal Bank, FSB.
99.1 Press release by CCB Financial Corporation dated August 1, 1997.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into this 31st day of July, 1997 by and between CCB
Financial Corporation, a North Carolina corporation (hereinafter,
"CCB"), and William L. Abercrombie, Jr. (hereinafter, "Executive").
BACKGROUND
Executive is the Chief Executive Officer of American Federal
Bank, FSB, a federal stock savings bank ("American Federal"), which
was acquired by CCB on the date hereof pursuant to an Agreement and
Plan of Reorganization, dated as of February 17, 1997 (the "Merger
Agreement") (the "Merger").
CCB desires to employ Executive in accordance with the terms
of this Agreement. Executive is willing to serve as an employee of
CCB in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the
"Effective Date") is the date on which the effective time of the
Merger occurred.
2. Employment.
(a) Officer Positions. Executive will be employed as a
Vice Chairman of the Board of Directors of CCB and as the President
and Chief Executive Officer of CCB's principal banking subsidiary
located in South Carolina (the "Bank"). Executive's
responsibilities under this Agreement shall be in accordance with
the policies and objectives established by the Board of Directors
of CCB, and shall be consistent with the responsibilities of
similarly situated executives of comparable banks and bank holding
companies. In any such capacity, Executive will report directly to
the Chief Executive Officer of CCB.
(b) Director Position. Subject to all legal limitations
and conditions applicable to service as a director of CCB, (i) the
Board of Directors of CCB shall nominate and use its best efforts
to secure the election of Executive as a director of CCB during the
term of this Agreement, and (ii) if so elected, Executive shall
serve as member of Executive Committee of the Board of Directors of
CCB.
3. Employment Period. Unless earlier terminated in accordance
with Section 6 hereof, Executive's employment shall be for a five-
year term (the "Employment Period"), beginning on the Effective
Date. The Employment Period shall, without further action by
Executive or CCB, be extended for an additional one-year period on
each anniversary of the Effective Date; provided, however, that
either party may, by notice to the other, cause the Employment
Period to cease to extend automatically. Upon such notice, the
Employment Period shall terminate upon the expiration of the then-
current term, including any prior extensions.
4. Extent of Service. During the Employment Period, and
excluding any periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote his business time,
attention, skill and efforts to the faithful performance of his
duties hereunder; provided, however, that with the approval of the
Board of Directors of CCB, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or
positions in, such companies or organizations, which, in such
Board's judgment, will not present any material conflict of
interest with CCB or any of its subsidiaries or affiliates or
divisions, or unfavorably affect the performance of Executive's
duties pursuant to this Agreement, or will not violate any
applicable statute or regulation. During the Employment Period it
shall not be a violation of this Agreement for Executive to (i)
devote reasonable periods of time to charitable and community
activities, and/or (ii) manage personal business interests and
investments, so long as such activities do not interfere with the
performance of Executive's responsibilities under this Agreement.
It is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to the date
of this Agreement (as to which activities Executive shall have
given written notice to CCB on or before June 1, 1997), the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of Executive's responsibilities hereunder.
5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, CCB will
pay to Executive a base salary in the amount of $300,000 per year
("Base Salary"), less normal withholdings, payable in equal monthly
or more frequent installments as are customary under CCB's payroll
practices from time to time. The Compensation Committee of the
Board of Directors of CCB shall review Executive's Base Salary
annually and in its sole discretion, subject to approval of the
Board of Directors of CCB, may adjust Executive's Base Salary from
year to year, but during the Employment Period the Board may not
decrease Executive's Base Salary below $300,000, and periodic
increases, once granted, shall not be subject to revocation. The
annual review of Executive's salary by the Board will consider,
among other things, Executive's own performance and CCB's
performance.
(b) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies
and programs applicable generally to senior executive officers of
CCB and its affiliated companies, and on the same basis as such
other senior executive officers, with full credit given for
Executive's total accumulated years of service at American Federal
for purposes of determining vesting and eligibility. Without
limiting the foregoing, the following shall apply:
(i) Executive's incentive bonus under CCB's regular
incentive plan for 1997 shall be on the basis of a full year
of service (i.e., not prorated as of the Effective Date).
(ii) In addition to any bonus earned by Executive
pursuant to CCB's regular incentive plans, CCB shall pay to
Executive a monthly bonus for each of the 24 months
immediately following the Effective Date in the amount of
$24,300 (the "Signing Bonus"). If Executive's employment is
terminated for Cause under Section 6(b)(ii) or (iii) of this
Agreement, then CCB's obligation to pay the Signing Bonus
shall cease as of the date of termination; otherwise such
obligation shall continue for the full 24 month period,
regardless of Executive's employment status.
(iii) Each year during the term of this Agreement
CCB will make stock options grants to Executive at the same
level as made to Executive Vice Presidents of CCB, which grant
in 1997 shall be the same percentage of the base salary of the
other Executive Vice Presidents of CCB for 1997, less the
value of any options granted in 1997 to Executive by American
Federal prior to the Effective Date.
(iv) CCB shall, if so requested by Executive,
assume and maintain on behalf of Executive that certain
Supplemental Retirement Benefit Agreement, dated as of
December 19, 1994, between Executive and American Federal.
(c) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
CCB and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group
life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to senior executive
officers of CCB and its affiliated companies, with full credit
given for Executive's total accumulated years of service at
American Federal for purposes of determining vesting and
eligibility (other than under CCB's retiree medical plan). Without
limiting the foregoing, (i) CCB shall assume and maintain on behalf
of Executive that certain life insurance policy identified on
Exhibit A hereto, and (ii) for one year after Executive's death,
CCB shall pay any premium required for any "qualified beneficiary"
to continue his or her health care coverage in accordance with
Title I, Part 6 of the Employee Retirement Security Act of 1974.
(d) Expenses. During the Employment Period, Executive
shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by Executive in accordance with the
policies, practices and procedures of CCB and its affiliated
companies to the extent applicable generally to other senior
executive officers of CCB and its affiliated companies.
(e) Fringe Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance with
the plans, practices, programs and policies of CCB and its
affiliated companies in effect for senior executive officers of CCB
and its affiliated companies.
6. Termination of Employment.
(a) Death or Disability. Executive's employment shall
terminate automatically upon Executive's death during the
Employment Period. If CCB determines in good faith that the
Disability of Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may
give to Executive written notice in accordance with Section 13(g)
of this Agreement of its intention to terminate Executive's
employment. In such event, Executive's employment with CCB shall
terminate effective on the 60th day after receipt of such written
notice by Executive (the "Disability Effective Date"), provided
that, within the 60 days after such receipt, Executive shall not
have returned to full-time performance of Executive's duties for a
period of at least 30 days. For purposes of this Agreement,
"Disability" shall mean the absence of Executive from Executive's
duties with CCB on a full-time basis for 180 consecutive days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by CCB
or its insurers and acceptable to Executive or Executive's legal
representative, which acceptance shall not be unreasonably
withheld.
(b) Cause. CCB may terminate Executive's employment during
the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) the willful and continued failure of Executive to
perform Executive's duties with CCB or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for
performance is delivered to Executive by the Board or the
Chief Executive Officer of CCB which specifically identifies
the manner in which the Board or Chief Executive Officer
believes that Executive has not performed Executive's duties;
(ii) Executive's personal dishonesty, willful
misconduct, or breach of a fiduciary duty from which he
derives a personal profit;
(iii) Executive's willful violation of any law, rule
or regulation (other than traffic violations or similar
offenses) or final cease and desist order; or
(iv) Executive's willful breach of any material
term or condition of this Agreement.
For purposes of this provision, no act or failure to act, on the
part of Executive, shall be considered "willful" or a breach of
fiduciary duty unless it is done, or omitted to be done, by
Executive in bad faith or without reasonable belief that
Executive's action or omission was in the best interests of CCB.
Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer of CCB or based upon the advice of
counsel for CCB after consultation with the Chief Executive Officer
about such advice shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best
interests of CCB. The cessation of employment of Executive shall
not be deemed to be for Cause unless and until there shall have
been delivered to Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to Executive
and Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of
the Board, Executive is guilty of the conduct described in
subparagraph (i), (ii), (iii) or (iv) above, and specifying the
particulars thereof in detail. For purposes of this Section 6(b),
any such finding by three-quarters of the Board shall be
conclusive.
(c) Good Reason. Executive's employment may be terminated
by Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) the assignment to Executive of any duties
materially inconsistent with Executive's position (including
status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by
Section 2(a) of this Agreement, or any other action by CCB
which results in a material diminution in such position,
authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by CCB promptly after
receipt of notice thereof given by Executive;
(ii) any failure by CCB to comply with any of the
provisions of Section 5 of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by CCB promptly after
receipt of written notice thereof given by Executive;
(iii) any relocation, to which Executive has not
agreed, to an office of CCB or the Bank more than 35 miles (by
most direct highway route) from the location of his office as
of the Effective Date or any increase in Executive's required
business travel, to which Executive has not agreed, amounting
to a constructive relocation; provided, however, that
Executive agrees that travel reasonably required in the
ordinary course of business to CCB's headquarters in Durham,
North Carolina, or between CCB's or its subsidiaries' banking
offices in South Carolina will not constitute a constructive
relocation.
(iv) any purported termination by CCB of
Executive's employment otherwise than as expressly permitted
by this Agreement; or
(v) any failure by CCB to comply with and satisfy
Section 12(b) of this Agreement.
For purposes of this Section 6(c), any good faith determination of
"Good Reason" made by Executive shall be conclusive.
(d) Six-Month Window Period. Anything in this Agreement to
the contrary notwithstanding, either party may terminate
Executive's employment hereunder for any reason or no reason during
the six-month period immediately following the second anniversary
of the Effective Date. Such termination shall have the
consequences set forth in Section 7(a) for a termination for Good
Reason, except that the Remaining Employment Period (as defined in
Section 7(a)(i)(B)) shall be deemed to be lesser of three years or
the number of days then remaining in the Employment Period.
(e) Notice of Termination. Any termination by CCB for
Cause, or by Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance
with Section 13(g) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which
(i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision
so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 30 days
after the giving of such notice). The failure by Executive or CCB
to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not
waive any right of Executive or CCB, respectively, hereunder or
preclude Executive or CCB, respectively, from asserting such fact
or circumstance in enforcing Executive's or CCB's rights hereunder.
(f) Date of Termination. "Date of Termination" means (i)
if Executive's employment is terminated by CCB for Cause, or by
Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may
be, (ii) if Executive's employment is terminated by CCB other than
for Cause or Disability, the Date of Termination shall be the date
on which CCB notifies Executive of such termination, and (iii) if
Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be.
7. Obligations of CCB upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability.
If, during the Employment Period, CCB shall terminate Executive's
employment other than for Cause, death or Disability, or Executive
shall terminate employment for Good Reason, then in consideration
of Executive's services rendered prior to such termination and as
reasonable compensation for his compliance with the restrictive
covenants set forth in Section 11 of this Agreement:
(i) CCB shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of
the following amounts:
A. the sum of (1) Executive's Base Salary through
the Date of Termination to the extent not theretofore paid,
(2) the product of (x) Executive's cash incentive bonus for
the last completed fiscal year ("Most Recent Annual Bonus"),
and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and (3) any
compensation previously deferred by Executive (together with
any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid
(the sum of the amounts described in clauses (1), (2), and (3)
shall be hereinafter referred to as the "Accrued
Obligations"); and
B. the amount equal to the product of (1) the
number of days remaining in the Employment Period from and
after the Date of Termination (the "Remaining Employment
Period"), and (2) Executive's Base Salary divided by 365; and
C. the amount equal to the product of (1) the
number of days in the Remaining Employment Period, and (2)
Executive's Most Recent Annual Bonus divided by 365; and
D. any remaining installments of the Signing
Bonus; and
E. an amount equal to the excess of (a) the
actuarial equivalent of the benefit under CCB's qualified
defined benefit retirement plan (the "Retirement Plan")
(utilizing actuarial assumptions no less favorable to
Executive than those in effect under CCB's Retirement Plan on
the Date of Termination), and any excess or supplemental
retirement plans in which Executive participates (together,
the "SERP") which Executive would receive if Executive's
employment continued throughout the Remaining Employment
Period, assuming for this purpose that all accrued benefits
are fully vested, and, assuming that Executive's compensation
in each remaining year of the Employment Period is the Base
Salary plus the Most Recent Annual Bonus, over (b) the
actuarial equivalent of Executive's actual benefit (paid or
payable), if any, under the Retirement Plan and the SERP as of
the Date of Termination;
(ii) for the Remaining Employment Period, or such
longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, CCB shall
continue benefits to Executive and/or Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies
described in Section 5(c) of this Agreement if Executive's
employment had not been terminated, provided, however, that if
Executive becomes re-employed with another employer and is
eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided
under such other plan during such applicable period of
eligibility. For purposes of determining eligibility and
years-of-service credit (but not the time of commencement of
benefits) of Executive for retiree benefits pursuant to such
plans, practices, programs and policies, Executive shall be
considered to have remained employed throughout the Remaining
Employment Period and to have retired on the last day of such
period;
(iii) to the extent not theretofore paid or
provided, CCB shall timely pay or provide to Executive any
other amounts or benefits required to be paid or provided or
which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of CCB
and its affiliated companies (such other amounts and benefits
shall be hereinafter referred to as the "Other Benefits"); and
(iv) notwithstanding any provision of this
Agreement to the contrary, Executive shall forfeit his right
to receive, or, to the extent such amounts have previously
been paid to Executive, shall repay in full to CCB with
interest at 8% per annum within thirty (30) days of a final
determination of Executive's liability therefor as set forth
below, the amount described in Sections 7(a)(i)(B) and (C) of
this Agreement if at any time during the Employment Period or
the Remaining Employment Period (the "Restricted Period") he
violates the restrictive covenants set forth in Section 11 of
this Agreement. Any determination of whether Executive has
violated such covenants shall be made by arbitration in
Greenville, South Carolina under the Rules of Commercial
Arbitration (the "Rules") of the American Arbitration
Association, which Rules are deemed to be incorporated by
reference herein; provided, however, that either party may
seek equitable remedies in court.
(b) Death. If Executive's employment is terminated by
reason of Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to
Executive's legal representatives under this Agreement, other than
for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to
Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as
utilized in this Section 7(b) shall include, without limitation,
and Executive's estate and/or beneficiaries shall be entitled to
receive, (i) benefits under such plans, programs, practices and
policies relating to death benefits, if any, as applicable
generally to senior executive officers of CCB and its affiliated
companies and their beneficiaries, and on the same basis as such
senior executive officers and their beneficiaries, with full credit
given for Executive's total accumulated years of service at
American Federal for purposes of determining vesting and
eligibility, (ii) the death benefits under the life insurance
policy identified on Exhibit A hereto, (iii) the beneficiary health
care coverage referred to in Section 5(c) of this Agreement, and
(iv) any remaining installments of the Signing Bonus.
(c) Disability. If Executive's employment is terminated by
reason of Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to Executive,
other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits. Accrued Obligations shall
be paid to Executive in a lump sum in cash within 30 days of the
Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 7(c)
shall include, without limitation, and Executive shall be entitled
after the Disability Effective Date to receive, (i) disability and
other benefits under such plans, programs, practices and policies
relating to disability, if any, as applicable generally to senior
executive officers of CCB and its affiliated companies and their
families, and on the same basis as such senior executive officers
and their families, with full credit given for Executive's total
accumulated years of service at American Federal for purposes of
determining vesting and eligibility, and (ii) any remaining
installments of the Signing Bonus.
(d) Cause; Other than for Good Reason. If Executive's
employment shall be terminated for Cause during the Employment
Period, this Agreement shall terminate without further obligations
to Executive other than the obligation to pay to Executive (x) his
Base Salary through the Date of Termination, (y) the amount of any
compensation previously deferred by Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If
Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to Executive, other
than for Accrued Obligations and the timely payment or provision of
Other Benefits. In such case, all Accrued Obligations shall be
paid to Executive in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of Other Benefits,
unless the termination of Executive's Employment was for Cause as
defined in clause (ii) or (iii) of Section 6(b), the term Other
Benefits as utilized in this Section 7(d) shall include, without
limitation, any remaining installments of the Signing Bonus.
8. Mandatory Reduction of Payments in Certain Events.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then, prior to the making of any Payment
to the Executive, a calculation shall be made comparing (i) the net
benefit to the Executive of the Payment after payment of the Excise
Tax, to (ii) the net benefit to the Executive if the Payment had
been limited to the extent necessary to avoid being subject to the
Excise Tax. If the amount calculated under (i) above is less than
the amount calculated under (ii) above, then the Payment shall be
limited to the extent necessary to avoid being subject to the
Excise Tax.
(b) The determination of whether an Excise Tax would be
imposed, the amount of such Excise Tax, and the calculation of the
amounts referred to Section 8(a)(i) and (ii) above shall be made by
the Company's regular independent accounting firm at the expense of
the Company or, at the election and expense of the Executive,
another nationally recognized independent accounting firm (the
"Accounting Firm") which shall provide detailed supporting
calculations. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder,
it is possible that Payments which the Executive was entitled to,
but did not receive pursuant to Section 8(a), could have been made
without the imposition of the Excise Tax ("Underpayment"). In such
event, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the
Executive.
9. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in
any plan, program, policy or practice provided by CCB or any of its
affiliated companies and for which Executive may qualify, nor,
subject to Section 13(e), shall anything herein limit or otherwise
affect such rights as Executive may have under any contract or
agreement with CCB or any of its affiliated companies. Amounts
which are vested benefits or which Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any
contract or agreement with CCB or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract
or agreement except as explicitly modified by this Agreement.
10. Full Settlement. CCB's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which CCB may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other
employment. CCB agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which Executive may
reasonably incur as a result of any contest (to the extent that
Executive is successful, in whole or in part, in such contest) by
CCB, Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee
of performance thereof (including as a result of any contest by
Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at
the applicable federal rate provided for in Section 7872(f)(2)(A)
of the Internal Revenue Code of 1986, as amended (the "Code").
11. Covenants.
(a) Covenant Not to Compete. During the Restricted Period
(as defined in Section 7(a)(iv) of this Agreement), Executive shall
not, within the States of South Carolina and North Carolina,
directly or indirectly, in any capacity, render his services, or
engage or have a financial interest in, any business that shall be
competitive with any of those business activities in which CCB or
its subsidiaries are engaged as of the date of Executive's
termination of employment, which business activities include the
provision of banking and related financial services (collectively,
the "Business"); provided, however, that Executive's beneficial
ownership of 3% or less of any class of securities listed for
trading on a national securities exchange or traded on the Nasdaq
National Market or in the over-the-counter market and reported by
Nasdaq shall not constitute a "financial interest" in violation of
this covenant. If a court determines that the foregoing
restrictions are too broad or otherwise unreasonable under
applicable law, including with respect to time or territory, the
court is hereby requested and authorized by the parties hereto to
revise the foregoing restriction to include the maximum
restrictions allowable under applicable law.
(b) Covenant Not to Solicit Customers. During the
Restricted Period, Executive shall not, directly or indirectly,
individually or on behalf of any other person, partnership, limited
liability company, corporation or other entity ("Person") (other
than CCB or an affiliate), solicit the provision of services
included in the Business to any Person who is or was (i) a customer
of CCB or any of its affiliates for whom CCB or any of its
affiliates provided services included in the Business during any
part of the 12-month period immediately prior to the date of
Executive's termination as an employee of CCB or the Bank, or (ii)
a potential customer of CCB or any of its affiliates to whom CCB or
any of its affiliates solicited the provision of services included
in the Business during any part of the 12-month period immediately
prior to the date of Executive's termination as an employee of CCB
or the Bank.
(c) Covenant Not to Solicit Employees. During the
Restricted Period, Executive shall not, directly or indirectly,
individually or on behalf of any other Person, solicit, recruit or
entice, directly or indirectly, any employee of CCB or its
affiliates to leave the employment of CCB or such affiliate to work
with Executive or with any Person with which Executive is or
becomes affiliated or associated.
(d) Reasonableness of Scope and Duration. The parties
hereto agree that the covenants and agreements contained in this
Section 11 are reasonable in their scope and duration, and they
intend that they be enforced, and no party shall raise any issue of
the reasonableness of the scope or duration of any such covenants
in any proceeding to enforce any such covenants.
(e) Enforceability. Executive agrees that monetary damages
would not be a sufficient remedy for any breach or threatened
breach of the provisions of this Section 11, and that in addition
to all other rights and remedies available to CCB, CCB shall be
entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach or threatened breach.
(f) Separate Covenants and Severability. The covenants and
agreements contained in this Section 11 shall be construed as
separate and independent covenants. Should any part or provision
of any such covenant or agreement be held invalid, void or
unenforceable in any court of competent jurisdiction, no other part
or provision of this Agreement shall be rendered invalid, void or
unenforceable as a result. If any portion of the foregoing
provisions is found to be invalid or unenforceable by a court of
competent jurisdiction unless modified, it is the intent of the
parties that the otherwise invalid or unreasonable term shall be
reformed, or a new enforceable term provided, so as to most closely
effectuate the provisions as is validly possible.
12. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and
without the prior written consent of CCB shall not be assignable by
Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by Executive's legal representatives.
(b) CCB. This Agreement shall inure to the benefit of and
be binding upon CCB and its successors and assigns. CCB will
require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of CCB to assume expressly and agree to
perform this Agreement in the same manner and to the same extent
that CCB would be required to perform it if no such succession had
taken place. As used in this Agreement, "CCB" shall mean CCB as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
13. Miscellaneous.
(a) No Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment shall
be offset or reduced by the amount of any compensation or benefits
provided to Executive in any subsequent employment.
(b) Waiver. Failure of either party to insist, in one or
more instances, on performance by the other in strict accordance
with the terms and conditions of this Agreement shall not be deemed
a waiver or relinquishment of any right granted in this Agreement
or of the future performance of any such term or condition or of
any other term or condition of this Agreement, unless such waiver
is contained in a writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be
invalid, illegal or unenforceable, either in whole or in part, such
invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of the remaining provisions or
covenants, or any part thereof, of this Agreement, all of which
shall remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to be
interpreted as limiting CCB from employing other personnel on such
terms and conditions as may be satisfactory to it.
(e) Entire Agreement. On the date hereof, Executive and
American Federal have entered into a separate Employment Agreement
(the "AFB Agreement"), which relates specifically to Executive's
employment as the President and Chief Executive Officer of American
Federal and contains certain bank regulatory limitations imposed by
the Office of Thrift Supervision and the Federal Deposit Insurance
Corporation. Except as provided herein or in the AFB Agreement,
this Agreement contains the entire agreement between CCB and
Executive with respect to the subject matter hereof and that it
supersedes and invalidates any previous agreements or contracts
including employment agreements (other than the AFB Agreement),
including, without limitation, that certain Amended and Restated
Employment Agreement, dated September 1, 1993, as further amended
and restated as of March 20, 1997, by and between American Federal
and Executive. No representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein or in
the AFB Agreement, shall be of any force or effect.
(f) Governing Law. Except to the extent preempted by
federal law, the laws of the State of North Carolina shall govern
this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(g) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given if delivered or seven
days after mailing if mailed, first class, certified mail, postage
prepaid:
To CCB: CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27702-0931
Facsimile No. (919) 683-6881
Attention: Chief Executive Officer
To Executive: William L. Abercrombie, Jr.
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Any party may change the address to which notices, requests,
demands and other communications shall be delivered or mailed by
giving notice thereof to the other party in the same manner
provided herein.
(h) Amendments and Modifications. This Agreement may be
amended or modified only by a writing signed by both parties
hereto, which makes specific reference to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Employment Agreement as of the date first above
written.
CCB FINANCIAL CORPORATION
By: /s/ ERNEST C. ROESSLER
Title: President and CEO
ABERCROMBIE:
/s/ WILLIAM L. ABERCROMBIE, JR.
William L. Abercrombie, Jr.
AMERICAN FEDERAL
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made
and entered into this 31st day of July, 1997 by and between
American Federal Bank, FSB, a federal stock savings bank
("American Federal"), and William L. Abercrombie, Jr.
(hereinafter, "Executive").
BACKGROUND
Executive is the Chief Executive Officer of American
Federal, which was acquired by CCB Financial Corporation, a
North Carolina corporation ("CCB") on the date hereof
pursuant to an Agreement and Plan of Reorganization, dated
as of February 17, 1997 (the "Merger Agreement") (the
"Merger"). CCB and Executive have entered into an
Employment Agreement of even date herewith, which governs
the terms of Executive's employment with CCB and certain of
its affiliates (the "CCB Agreement").
American Federal desires to employ Executive in
accordance with the terms of this Agreement. Executive is
willing to serve as an employee of American Federal in
accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of
the mutual covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Effective Date. The effective date of this
Agreement (the "Effective Date") is the date on which the
effective time of the Merger occurred.
2. Employment. Executive will continue to serve during
the term of this Agreement as the President and Chief
Executive Officer of American Federal. Executive's
responsibilities to American Federal under this Agreement
shall be in accordance with the policies and objectives
established from time to time by the Board of Directors of
American Federal.
3. Employment Period. The term of this Agreement will
be concurrent with the term of the CCB Agreement (the
"Employment Period"), unless earlier terminated in
accordance with Section 6 hereof.
4. Extent of Service. During the Employment Period,
and excluding any periods of vacation and sick leave to
which Executive is entitled, Executive agrees to devote his
business time, attention, skill and efforts to the faithful
performance of his duties hereunder and under the CCB
Agreement; provided, however, Executive may engage in such
incidental activities as are permitted under the CCB
Agreement.
5. Compensation and Benefits. During the Employment
Period, Executive's compensation and benefits for service to
American Federal will be provided by CCB in accordance with
the terms of Section 5 of the CCB Agreement, which terms are
incorporated herein by reference.
6. Termination of Employment. Executive's employment
with American Federal under this Agreement will terminate
(i) under the same circumstances as, (ii) simultaneously
with, and (iii) with the same consequences as, the
termination of his employment with CCB under the terms of
Sections 6, 7 and 8 of the CCB Agreement, which terms are
incorporated herein by reference. Any termination benefits
shall be payable only once (i.e., not under both
Agreements). Notwithstanding the above, the Board of
Directors of American Federal may terminate Executive's
employment hereunder at any time, but any such termination
other than for Cause (as defined in the CCB Agreement) shall
not prejudice Executive's right to compensation or other
benefits under this Agreement or the CCB Agreement. As
provided in the CCB Agreement, if such termination is for
Cause, Executive shall have no right to receive compensation
or other benefits hereunder or under the CCB Agreement for
any period after termination.
7. Regulatory Intervention. Notwithstanding anything
in this Agreement to the contrary, this Agreement is subject
to the following terms and conditions:
(a) If Executive is suspended and/or temporarily
prohibited from participating in the conduct of American
Federal's affairs by a notice served under Section 8(e)(3)
or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818 (e)(3) and (g)(1)), American Federal's obligations
hereunder shall be suspended as of the date of service
unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, American Federal shall (i) pay
Executive all or part of the compensation withheld while
American Federal's contract obligations were suspended, and
(ii) reinstate any of American Federal's obligations which
were suspended.
(b) If Executive is removed and/or permanently
prohibited from participating in the conduct of American
Federal's affairs by an order issued under Section 8(e)(4)
or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818 (e)(4) and (g)(1)), all obligations of American Federal
under this Agreement shall terminate as of the effective
date of the order, but vested rights of the parties shall
not be affected.
(c) If American Federal is in default (as defined in
Section 3(x)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813 (x)(1)), all obligations under this Agreement
shall terminate as of the date of default, but any vested
rights of executive shall not be affected.
(d) All obligations under this Agreement shall be
terminated, except to the extent determined that
continuation of the contract is necessary for the continued
operation of American Federal, (i) by the Office of Thrift
Supervision ("OTS") at the time the Federal Deposit
Insurance Corporation ("FDIC") enters into an agreement to
provide assistance to or on behalf of American Federal under
the authority contained in Section 13(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1823 (c)); or (ii) by the
OTS at the time the OTS approves a supervisory merger to
resolve problems related to operation of American Federal or
when American Federal is determined by the OTS to be in an
unsafe or unsound condition. Any rights of Executive that
shall have vested under this Agreement shall not be affected
by such action.
(e) With regard to the provisions of this Section 7(a)
through (d):
(i) American Federal agrees to use its best efforts
to oppose any such notice of charges as to which there
are reasonable defenses;
(ii) In the event the notice of changes is
dismissed or otherwise resolved in a manner that will
permit American Federal to resume its obligations to
pay compensation hereunder, American Federal will
promptly make such payment hereunder; and
(iii) During the period of suspension , the
vested rights of the contracting parties shall not be
affected except to the extent precluded by such notice.
(f) American Federal's obligations to provide
compensation or other benefits to Executive under this
Agreement or the CCB Agreement shall be terminated or
limited to the extent required by the provisions of any
final regulation or order of the Federal Deposit Insurance
Corporation promulgated under Section 18(k) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(k)) limiting or
prohibiting any "golden parachute payment" as defined
therein, but only to the extent that the compensation or
payments to be provided under this Agreement or the CCB
Agreement are so prohibited or limited.
8. Legal Expenses. To the extent not paid by CCB under
the CCB Agreement, American Federal agrees to pay as
incurred, to the full extent permitted by law, all legal
fees and expenses which Executive may reasonably incur as a
result of any contest (to the extent that Executive is
successful, in whole or in part, in such contest) by
American Federal, Executive or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including
as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable federal
rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended.
9. Assignment and Successors.
(a) Executive. This Agreement is personal to
Executive and without the prior written consent of American
Federal shall not be assignable by Executive otherwise than
by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable
by Executive's legal representatives.
(b) American Federal. This Agreement shall inure to
the benefit of and be binding upon American Federal and its
successors and assigns. American Federal will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of American Federal to assume
expressly and agree to perform this Agreement in the same
manner and to the same extent that American Federal would be
required to perform it if no such succession had taken
place. As used in this Agreement, "American Federal" shall
mean American Federal as hereinbefore defined and any
successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of
law or otherwise.
10. Miscellaneous.
(a) No Mitigation. Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any
subsequent employment.
(b) Waiver. Failure of either party to insist, in
one or more instances, on performance by the other in strict
accordance with the terms and conditions of this Agreement
shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of
any such term or condition or of any other term or condition
of this Agreement, unless such waiver is contained in a
writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, or
any part thereof, of this Agreement should be held by any
court to be invalid, illegal or unenforceable, either in
whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or
enforceability of the remaining provisions or covenants, or
any part thereof, of this Agreement, all of which shall
remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to
be interpreted as limiting American Federal from employing
other personnel on such terms and conditions as may be
satisfactory to it.
(e) Entire Agreement. Except as provided herein,
this Agreement and the CCB Agreement contain the entire
agreement between American Federal and Executive with
respect to the subject matter hereof and such Agreements
supersede and invalidate any previous agreements or
contracts including employment agreements by and between
American Federal and Executive. No representations,
inducements, promises or agreements, oral or otherwise,
which are not embodied herein or in the CCB Agreement, shall
be of any force or effect.
(f) Governing Law. Except to the extent preempted
by federal law, the laws of the State of North Carolina
shall govern this Agreement in all respects, whether as to
its validity, construction, capacity, performance or
otherwise.
(g) Notices. All notices, requests, demands and
other communications required or permitted hereunder shall
be in writing and shall be deemed to have been duly given if
delivered or seven days after mailing if mailed, first
class, certified mail, postage prepaid:
To American Federal:American Federal Bank, FSB
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Attention: Chairman of the Board of
Directors
To Executive: William L. Abercrombie, Jr.
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Any party may change the address to which notices, requests,
demands and other communications shall be delivered or
mailed by giving notice thereof to the other party in the
same manner provided herein.
(h) Amendments and Modifications. This Agreement
may be amended or modified only by a writing signed by both
parties hereto, which makes specific reference to this
Agreement.
(signatures on following page)
IN WITNESS WHEREOF, the parties hereto have duly
executed and delivered this Employment Agreement as of the
date first above written.
AMERICAN FEDERAL BANK, FSB
By: /s/ C. DAN JOYNER
Title: Chairman, Compensation
Committee
ABERCROMBIE:
/s/WILLIAM L. ABERCROMBIE, JR.
William L. Abercrombie, Jr.
Acknowledged and agreed to:
CCB FINANCIAL CORPORATION
By: /s/ ERNEST C. ROESSLER
Title: President and CEO
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made
and entered into this 31st day of July, 1997 by and between
CCB Financial Corporation, a North Carolina corporation
(hereinafter, "CCB"), and Michael A. Trimble (hereinafter,
"Executive").
BACKGROUND
Executive is the Chief Financial and Chief Operating
Officer of American Federal Bank, FSB, a federal stock
savings bank ("American Federal"), which was acquired by CCB
on the date hereof pursuant to an Agreement and Plan of
Reorganization, dated as of February 17, 1997 (the "Merger
Agreement") (the "Merger").
CCB desires to employ Executive in accordance with the
terms of this Agreement. Executive is willing to serve as
an employee of CCB or its subsidiary in accordance with the
terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of
the mutual covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Effective Date. The effective date of this
Agreement (the "Effective Date") is the date on which the
effective time of the Merger occurred.
2. Employment. Executive will be employed as the
Executive Vice President and Chief Operating Officer of
CCB's principal banking subsidiary located in South Carolina
(the "Bank"). Executive's responsibilities under this
Agreement shall be in accordance with the policies and
objectives established by the Boards of Directors of CCB and
the Bank, and shall be consistent with the responsibilities
of similarly situated executives of comparable banks. In
any such capacity, Executive will report directly to the
Chief Executive Officer of the Bank.
3. Employment Period. Unless earlier terminated in
accordance with Section 6 hereof, Executive's employment
shall be for a period of two years beginning on the
Effective Date (the "Employment Period").
4. Extent of Service. During the Employment Period,
and excluding any periods of vacation and sick leave to
which Executive is entitled, Executive agrees to devote his
business time, attention, skill and efforts to the faithful
performance of his duties hereunder; provided, however, that
with the approval of the Board of Directors of CCB,
Executive may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in,
such companies or organizations, which, in such Board's
judgment, will not present any material conflict of interest
with CCB or any of its subsidiaries or affiliates or
divisions, or unfavorably affect the performance of
Executive's duties pursuant to this Agreement, or will not
violate any applicable statute or regulation. During the
Employment Period it shall not be a violation of this
Agreement for Executive to (i) devote reasonable periods of
time to charitable and community activities, and/or (ii)
manage personal business interests and investments, so long
as such activities do not interfere with the performance of
Executive's responsibilities under this Agreement. It is
expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to
the date of this Agreement (as to which activities Executive
shall have given written notice to CCB on or before June 1,
1997), the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of Executive's
responsibilities hereunder.
5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, CCB
will pay to Executive a base salary in the amount of
$193,000 per year ("Base Salary"), less normal withholdings,
payable in equal monthly or more frequent installments as
are customary under CCB's payroll practices from time to
time. The Compensation Committee of the Board of Directors
of CCB shall review Executive's Base Salary annually and in
its sole discretion, subject to approval of the Board of
Directors of CCB, may adjust Executive's Base Salary from
year to year, but during the Employment Period the Board may
not decrease Executive's Base Salary below $193,000, and
periodic increases, once granted, shall not be subject to
revocation. The annual review of Executive's salary by the
Board will consider, among other things, Executive's own
performance and CCB's performance.
(b) Incentive, Savings and Retirement Plans. During
the Employment Period, Executive shall be entitled to
participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to
senior executive officers of CCB and its affiliated
companies, and on the same basis as such other senior
executive officers, with full credit given for Executive's
total accumulated years of service at American Federal for
purposes of determining vesting and eligibility. Without
limiting the foregoing, the following shall apply.
(i) Executive's incentive bonus under CCB's
regular incentive plan for 1997 shall be on the basis
of a full year of service (i.e., not prorated as of the
Effective Date).
(ii) In addition to any bonus earned by
Executive pursuant to CCB's regular incentive plans,
CCB shall pay to Executive a monthly bonus for each of
the 24 months immediately following the Effective Date
in the amount of $15,800 (the "Signing Bonus");
provided that in the event the employment of Executive
is terminated (other than a termination for Cause under
Section 6(b)(ii) or (iii) of this Agreement), CCB shall
pay to Executive, at the time of his termination of
employment, a lump sum equal to the sum of the monthly
payments of the Signing Bonus that remain unpaid at the
time of Executive's termination of employment. If
Executive's employment is terminated for Cause under
Section 6(b)(ii) or (iii) of this Agreement, then CCB's
obligation to pay the Signing Bonus shall cease as of
the date of termination; otherwise such obligation
shall continue on the basis set forth above, regardless
of Executive's employment status.
(iii) Executive's retirement shall be under
the terms of the regular CCB retirement plan(s) then in
effect, but with the benefits provided under the
American Federal Retirement Plan.
(iv) Beginning January 1, 1998, Executive
may terminate his employment hereunder for any reason
or no reason. Upon such termination, and contingent
upon his compliance with the covenant-not-to-compete
contained in Section 11(a) of this Agreement, CCB shall
pay to Executive, for the month during which the
Executive's termination of employment occurs if such
termination occurs on or before the 15th of such month
(or for the first full month following Executive's
termination of employment if such termination occurs
after the 15th of such month) and for each month
thereafter until January 1, 2002 (the "Covenant
Months"), in addition to any retirement or other
benefits to which he may be entitled, a monthly payment
for each of the Covenant Months in the amount of $9,500
(the "Covenant Payment"). During the period Covenant
Payments are made, Executive and/or his dependents will
be entitled to participate in CCB's medical plans at
his expense as though he were an employee of CCB.
(c) Welfare Benefit Plans. During the Employment
Period, Executive and/or Executive's family, as the case may
be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans, practices,
policies and programs provided by CCB and its affiliated
companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and
programs) to the extent applicable generally to senior
executive officers of CCB and its affiliated companies, with
full credit given for Executive's total accumulated years of
service at American Federal for purposes of determining
vesting and eligibility (other than under CCB's retiree
medical plan).
(d) Expenses. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by Executive in
accordance with the policies, practices and procedures of
CCB and its affiliated companies to the extent applicable
generally to other senior executive officers of CCB and its
affiliated companies.
(e) Fringe Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance
with the plans, practices, programs and policies of CCB and
its affiliated companies in effect for senior executive
officers of CCB and its affiliated companies.
6. Termination of Employment.
(a) Death or Disability. Executive's employment
shall terminate automatically upon Executive's death during
the Employment Period. If CCB determines in good faith that
the Disability of Executive has occurred during the
Employment Period (pursuant to the definition of Disability
set forth below), it may give to Executive written notice in
accordance with Section 13(g) of this Agreement of its
intention to terminate Executive's employment. In such
event, Executive's employment shall terminate effective on
the 60th day after receipt of such written notice by
Executive (the "Disability Effective Date"), provided that,
within the 60 days after such receipt, Executive shall not
have returned to full-time performance of Executive's duties
for a period of at least 30 days. For purposes of this
Agreement, "Disability" shall mean the absence of Executive
from Executive's duties with CCB on a full-time basis for
180 consecutive days as a result of incapacity due to mental
or physical illness which is determined to be total and
permanent by a physician selected by CCB or its insurers and
acceptable to Executive or Executive's legal representative,
which acceptance shall not be unreasonably withheld.
(b) Cause. CCB may terminate Executive's employment
during the Employment Period for Cause. For purposes of
this Agreement, "Cause" shall mean:
(i) the willful and continued failure of
Executive to perform Executive's duties with CCB or one
of its affiliates (other than any such failure
resulting from incapacity due to physical or mental
illness), after a written demand for performance is
delivered to Executive by the Board or the Chief
Executive Officer of CCB which specifically identifies
the manner in which the Board or Chief Executive
Officer believes that Executive has not performed
Executive's duties;
(ii) Executive's personal dishonesty,
willful misconduct, or breach of a fiduciary duty from
which he derives a personal profit;
(iii) Executive's willful violation of any
law, rule or regulation (other than traffic violations
or similar offenses) or final cease and desist order;
or
(iv) Executive's willful breach of any
material term or condition of this Agreement.
For purposes of this provision, no act or failure to act, on
the part of Executive, shall be considered "willful" or a
breach of fiduciary duty unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief
that Executive's action or omission was in the best
interests of CCB. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive
Officer of CCB or based upon the advice of counsel for CCB
after consultation with the Chief Executive Officer about
such advice shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the
best interests of CCB. The cessation of employment of
Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to Executive a copy of
a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to Executive
and Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, Executive is guilty of the
conduct described in subparagraph (i), (ii), (iii) or (iv)
above, and specifying the particulars thereof in detail.
For purposes of this Section 6(b), any such finding by three-
quarters of the Board shall be conclusive.
(c) Good Reason. Executive's employment may be
terminated by Executive for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to Executive of any duties
materially inconsistent with Executive's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 2(a) of this Agreement, or any
other action by CCB which results in a material
diminution in such position, authority, duties or
responsibilities, excluding for this purpose an
isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by CCB
promptly after receipt of notice thereof given by
Executive;
(ii) any failure by CCB to comply with any
of the provisions of Section 5 of this Agreement, other
than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by CCB
promptly after receipt of written notice thereof given
by Executive;
(iii) any relocation, to which Executive has
not agreed, to an office of CCB or the Bank more than
35 miles (by most direct highway route) from the
location of his office as of the Effective Date or any
increase in Executive's required business travel, to
which Executive has not agreed, amounting to a
constructive relocation; provided, however, that
Executive agrees that travel reasonably required in the
ordinary course of business to CCB's headquarters in
Durham, North Carolina, or between CCB's or its
subsidiaries' banking offices in South Carolina will
not constitute a constructive relocation.
(iv) any purported termination by CCB of
Executive's employment otherwise than as expressly
permitted by this Agreement; or
(v) any failure by CCB to comply with and
satisfy Section 12(b) of this Agreement; or
(vi) beginning January 1, 1998, any reason
or no reason.
For purposes of this Section 6(c), any good faith
determination of "Good Reason" made by Executive shall be
conclusive.
(d) Notice of Termination. Any termination by CCB
for Cause, or by Executive for Good Reason, shall be
communicated by Notice of Termination to the other party
hereto given in accordance with Section 13(g) of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment
under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving
of such notice). The failure by Executive or CCB to set
forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall
not waive any right of Executive or CCB, respectively,
hereunder or preclude Executive or CCB, respectively, from
asserting such fact or circumstance in enforcing Executive's
or CCB's rights hereunder.
(e) Date of Termination. "Date of Termination"
means (i) if Executive's employment is terminated by CCB for
Cause, or by Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified
therein, as the case may be, (ii) if Executive's employment
is terminated by CCB other than for Cause or Disability, the
Date of Termination shall be the date on which CCB notifies
Executive of such termination, and (iii) if Executive's
employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may
be.
7. Obligations of CCB upon Termination.
(a) Good Reason; Other Than for Cause, Death or
Disability. If, during the Employment Period, CCB shall
terminate Executive's employment other than for Cause, death
or Disability, or Executive shall terminate employment for
Good Reason, then in consideration of Executive's services
rendered prior to such termination and as reasonable
compensation for his compliance with the restrictive
covenants set forth in Section 11 of this Agreement:
(i) CCB shall pay to Executive, in a lump sum
in cash within 30 days after the Date of Termination,
the aggregate of the following amounts:
A. the sum of (1) Executive's Base Salary
through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) Executive's
cash incentive bonus for the last completed fiscal year
("Most Recent Annual Bonus"), and (y) a fraction, the
numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the
denominator of which is 365, and (3) any compensation
previously deferred by Executive (together with any
accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred
to as the "Accrued Obligations"); and
B. the amount equal to the product of (1)
the number of days remaining after the Date of
Termination until January 1, 1998 (the "Remaining
Employment Period"), and (2) Executive's Base Salary
divided by 365; and
C. the amount equal to the product of (1)
the number of days in the Remaining Employment Period,
and (2) Executive's Most Recent Annual Bonus divided by
365; and
D. any remaining installments of the
Signing Bonus; and
E. an amount equal to the excess of (a)
the actuarial equivalent of the benefit under CCB's
qualified defined benefit retirement plan (the
"Retirement Plan") (utilizing actuarial assumptions no
less favorable to Executive than those in effect under
CCB's Retirement Plan on the Date of Termination), and
any excess or supplemental retirement plans in which
Executive participates (together, the "SERP") which
Executive would receive if Executive's employment
continued throughout the Remaining Employment Period,
assuming for this purpose that all accrued benefits are
fully vested, and, assuming that Executive's
compensation in each remaining year of the Employment
Period is the Base Salary plus the Most Recent Annual
Bonus, over (b) the actuarial equivalent of Executive's
actual benefit (paid or payable), if any, under the
Retirement Plan and the SERP as of the Date of
Termination;
(ii) CCB shall pay to Executive the Covenant
Payment as provided in Section 5(b)(iv) of this
Agreement;
(iii) for the Remaining Employment Period, or
such longer period as may be provided by the terms of
the appropriate plan, program, practice or policy, CCB
shall continue benefits to Executive and/or Executive's
family at least equal to those which would have been
provided to them in accordance with the plans,
programs, practices and policies described in
Section 5(c) of this Agreement if Executive's
employment had not been terminated, provided, however,
that if Executive becomes re-employed with another
employer and is eligible to receive medical or other
welfare benefits under another employer provided plan,
the medical and other welfare benefits described herein
shall be secondary to those provided under such other
plan during such applicable period of eligibility. For
purposes of determining eligibility and years-of-
service credit (but not the time of commencement of
benefits) of Executive for retiree benefits pursuant to
such plans, practices, programs and policies, Executive
shall be considered to have remained employed
throughout the Remaining Employment Period and to have
retired on the last day of such period;
(iv)to the extent not theretofore paid or
provided, CCB shall timely pay or provide to Executive
any other amounts or benefits required to be paid or
provided or which Executive is eligible to receive
under any plan, program, policy or practice or contract
or agreement of CCB and its affiliated companies (such
other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and
(v) notwithstanding any provision of this
Agreement to the contrary, Executive shall forfeit his
right to receive, or, to the extent such amounts have
previously been paid to Executive, shall repay in full
to CCB with interest at 8% per annum within thirty (30)
days of a final determination of Executive's liability
therefor as set forth below, the amount described in
Sections 7(a)(i)(B) and (C) and Section 7(a)(ii) of
this Agreement if at any time during the period
Covenant Payments are made (the "Restricted Period") he
violates the restrictive covenants set forth in
Section 11 of this Agreement. Any determination of
whether Executive has violated such covenants shall be
made by arbitration in Greenville, South Carolina under
the Rules of Commercial Arbitration (the "Rules") of
the American Arbitration Association, which Rules are
deemed to be incorporated by reference herein;
provided, however, that either party may seek equitable
remedies in court.
(b) Death. If Executive's employment is terminated
by reason of Executive's death during the Employment Period,
this Agreement shall terminate without further obligations
to Executive's legal representatives under this Agreement,
other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits. Accrued Obligations
shall be paid to Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this
Section 7(b) shall include, without limitation, and
Executive's estate and/or beneficiaries shall be entitled to
receive, (i) benefits under such plans, programs, practices
and policies relating to death benefits, if any, as
applicable generally to senior executive officers of CCB and
its affiliated companies and their beneficiaries, and on the
same basis as such senior executive officers and their
beneficiaries, with full credit given for Executive's total
accumulated years of service at American Federal for
purposes of determining vesting and eligibility, and (ii)
any remaining installments of the Signing Bonus.
(c) Disability. If Executive's employment is
terminated by reason of Executive's Disability during the
Employment Period, this Agreement shall terminate without
further obligations to Executive, other than for payment of
Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to
Executive in a lump sum in cash within 30 days of the Date
of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this
Section 7(c) shall include, without limitation, and
Executive shall be entitled after the Disability Effective
Date to receive, (i) disability and other benefits under
such plans, programs, practices and policies relating to
disability, if any, as applicable generally to senior
executive officers of CCB and its affiliated companies and
their families, and on the same basis as such senior
executive officers and their families, with full credit
given for Executive's total accumulated years of service at
American Federal for purposes of determining vesting and
eligibility, and (ii) any remaining installments of the
Signing Bonus.
(d) Cause; Other than for Good Reason. If
Executive's employment shall be terminated for Cause during
the Employment Period, this Agreement shall terminate
without further obligations to Executive other than the
obligation to pay to Executive (x) his Base Salary through
the Date of Termination, (y) the amount of any compensation
previously deferred by Executive, and (z) Other Benefits, in
each case to the extent theretofore unpaid. If Executive
voluntarily terminates employment before January 1, 1998,
excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to Executive,
other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to Executive in a lump sum in cash
within 30 days of the Date of Termination. With respect
to the provision of Other Benefits, unless the termination
of Executive's Employment was for Cause as defined in clause
(ii) or (iii) of Section 6(b), the term Other Benefits as
utilized in this Section 7(d) shall include, without
limitation, the Signing Bonus.
8. Mandatory Reduction of Payments in Certain Events.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would be subject to
the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then, prior to the making of any Payment to
the Executive, a calculation shall be made comparing (i) the
net benefit to the Executive of the Payment after payment of
the Excise Tax, to (ii) the net benefit to the Executive if
the Payment had been limited to the extent necessary to
avoid being subject to the Excise Tax. If the amount
calculated under (i) above is less than the amount
calculated under (ii) above, then the Payment shall be
limited to the extent necessary to avoid being subject to
the Excise Tax.
(b) The determination of whether an Excise Tax would
be imposed, the amount of such Excise Tax, and the
calculation of the amounts referred to Section 8(a)(i) and
(ii) above shall be made by the Company's regular
independent accounting firm at the expense of the Company
or, at the election and expense of the Executive, another
nationally recognized independent accounting firm (the
"Accounting Firm") which shall provide detailed supporting
calculations. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Payments
which the Executive was entitled to, but did not receive
pursuant to Section 8(a), could have been made without the
imposition of the Excise Tax ("Underpayment"). In such
event, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit
of the Executive.
9. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit Executive's continuing or
future participation in any plan, program, policy or
practice provided by CCB or any of its affiliated companies
and for which Executive may qualify, nor, subject to
Section 13(e), shall anything herein limit or otherwise
affect such rights as Executive may have under any contract
or agreement with CCB or any of its affiliated companies.
Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with CCB
or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
10. Full Settlement. CCB's obligation to make the
payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense or other
claim, right or action which CCB may have against Executive
or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of
mitigation of the amounts payable to Executive under any of
the provisions of this Agreement and such amounts shall not
be reduced whether or not Executive obtains other
employment. CCB agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest
(to the extent that Executive is successful, in whole or in
part, in such contest) by CCB, Executive or others of the
validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by Executive
about the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the
applicable federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
as amended (the "Code").
11. Covenants.
(a) Covenant Not to Compete. During the Restricted
Period (as defined in Section 7(a)(iv) of this Agreement),
Executive shall not, within the States of South Carolina and
North Carolina, directly or indirectly, in any capacity,
render his services, or engage or have a financial interest
in, any business that shall be competitive with any of those
business activities in which CCB or its subsidiaries are
engaged as of the date of Executive's termination of
employment, which business activities include the provision
of banking and related financial services (collectively, the
"Business"); provided, however, that Executive's beneficial
ownership of 3% or less of any class of securities listed
for trading on a national securities exchange or traded on
the Nasdaq National Market or in the over-the-counter market
and reported by Nasdaq shall not constitute a "financial
interest" in violation of this covenant. If a court
determines that the foregoing restrictions are too broad or
otherwise unreasonable under applicable law, including with
respect to time or territory, the court is hereby requested
and authorized by the parties hereto to revise the foregoing
restriction to include the maximum restrictions allowable
under applicable law.
(b) Covenant Not to Solicit Customers. During the
Restricted Period, Executive shall not, directly or
indirectly, individually or on behalf of any other person,
partnership, limited liability company, corporation or other
entity ("Person") (other than CCB or an affiliate), solicit
the provision of services included in the Business to any
Person who is or was (i) a customer of CCB or any of its
affiliates for whom CCB or any of its affiliates provided
services included in the Business during any part of the 12-
month period immediately prior to the date of Executive's
termination as an employee of CCB or the Bank, or (ii) a
potential customer of CCB or any of its affiliates to whom
CCB or any of its affiliates solicited the provision of
services included in the Business during any part of the 12-
month period immediately prior to the date of Executive's
termination as an employee of CCB or the Bank.
(c) Covenant Not to Solicit Employees. During the
Restricted Period, Executive shall not, directly or
indirectly, individually or on behalf of any other Person,
solicit, recruit or entice, directly or indirectly, any
employee of CCB or its affiliates to leave the employment of
CCB or such affiliate to work with Executive or with any
Person with which Executive is or becomes affiliated or
associated.
(d) Reasonableness of Scope and Duration. The
parties hereto agree that the covenants and agreements
contained in this Section 11 are reasonable in their scope
and duration, and they intend that they be enforced, and no
party shall raise any issue of the reasonableness of the
scope or duration of any such covenants in any proceeding to
enforce any such covenants.
(e) Enforceability. Executive agrees that monetary
damages would not be a sufficient remedy for any breach or
threatened breach of the provisions of this Section 11, and
that in addition to all other rights and remedies available
to CCB, CCB shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any
such breach or threatened breach.
(f) Separate Covenants and Severability. The
covenants and agreements contained in this Section 11 shall
be construed as separate and independent covenants. Should
any part or provision of any such covenant or agreement be
held invalid, void or unenforceable in any court of
competent jurisdiction, no other part or provision of this
Agreement shall be rendered invalid, void or unenforceable
as a result. If any portion of the foregoing provisions is
found to be invalid or unenforceable by a court of competent
jurisdiction unless modified, it is the intent of the
parties that the otherwise invalid or unreasonable term
shall be reformed, or a new enforceable term provided, so as
to most closely effectuate the provisions as is validly
possible.
12. Assignment and Successors.
(a) Executive. This Agreement is personal to
Executive and without the prior written consent of CCB shall
not be assignable by Executive otherwise than by will or the
laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by Executive's
legal representatives.
(b) CCB. This Agreement shall inure to the benefit
of and be binding upon CCB and its successors and assigns.
CCB will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of CCB to
assume expressly and agree to perform this Agreement in the
same manner and to the same extent that CCB would be
required to perform it if no such succession had taken
place. As used in this Agreement, "CCB" shall mean CCB as
hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.
13. Miscellaneous.
(a) No Mitigation. Executive shall not be required
to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise and no
such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any
subsequent employment.
(b) Waiver. Failure of either party to insist, in
one or more instances, on performance by the other in strict
accordance with the terms and conditions of this Agreement
shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of
any such term or condition or of any other term or condition
of this Agreement, unless such waiver is contained in a
writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, or
any part thereof, of this Agreement should be held by any
court to be invalid, illegal or unenforceable, either in
whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or
enforceability of the remaining provisions or covenants, or
any part thereof, of this Agreement, all of which shall
remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to
be interpreted as limiting CCB from employing other
personnel on such terms and conditions as may be
satisfactory to it.
(e) Entire Agreement. On the date hereof, Executive
and American Federal have entered into a separate Employment
Agreement which relates specifically to Executive's
employment as the Executive Vice President and Chief
Operating Officer of American Federal and contains certain
bank regulatory limitations imposed by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation
(the "AFB Agreement"). Except as provided herein or in the
AFB Agreement, this Agreement contains the entire agreement
between CCB and Executive with respect to the subject matter
hereof and that it supersedes and invalidates any previous
agreements or contracts including employment agreements
(other than the AFB Agreement), including, without
limitation, that certain Amended and Restated Employment
Agreement, dated September 1, 1993, as further amended and
restated as of March 20, 1997, by and between American
Federal and Executive. No representations, inducements,
promises or agreements, oral or otherwise, which are not
embodied herein or in the AFB Agreement, shall be of any
force or effect.
(f) Governing Law. Except to the extent preempted
by federal law, the laws of the State of North Carolina
shall govern this Agreement in all respects, whether as to
its validity, construction, capacity, performance or
otherwise.
(g) Notices. All notices, requests, demands and
other communications required or permitted hereunder shall
be in writing and shall be deemed to have been duly given if
delivered or seven days after mailing if mailed, first
class, certified mail, postage prepaid:
To CCB: CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27702-0931
Facsimile No. (919) 683-6881
Attention: Chief Executive Officer
To Executive: Michael A. Trimble
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Any party may change the address to which notices, requests,
demands and other communications shall be delivered or
mailed by giving notice thereof to the other party in the
same manner provided herein.
(h) Amendments and Modifications. This Agreement
may be amended or modified only by a writing signed by both
parties hereto, which makes specific reference to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly
executed and delivered this Employment Agreement as of the
date first above written.
CCB FINANCIAL CORPORATION
By: /s/ ERNEST C. ROESSLER
Title: President and CEO
TRIMBLE:
/s/ MICHAEL A. TRIMBLE
Michael A. Trimble
AMERICAN FEDERAL
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into this 31st day of July, 1997 by and between American
Federal Bank, FSB, a federal stock savings bank ("American
Federal"), and Michael A. Trimble (hereinafter, "Executive").
BACKGROUND
Executive is the Chief Financial and Chief Operating Officer
of American Federal, which was acquired by CCB Financial
Corporation, a North Carolina corporation ("CCB") on the date
hereof pursuant to an Agreement and Plan of Reorganization, dated
as of February 17, 1997 (the "Merger Agreement") (the "Merger").
CCB and Executive have entered into an Employment Agreement of even
date herewith, which governs the terms of Executive's employment
with CCB and certain of its affiliates (the "CCB Agreement").
American Federal desires to employ Executive in accordance
with the terms of this Agreement. Executive is willing to serve as
an employee of American Federal in accordance with the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the
"Effective Date") is the date on which the effective time of the
Merger occurred.
2. Employment. Executive will continue to serve during the
term of this Agreement as the Executive Vice President and Chief
Operating Officer of American Federal. Executive's
responsibilities to American Federal under this Agreement shall be
in accordance with the policies and objectives established from
time to time by the Board of Directors of American Federal.
3. Employment Period. The term of this Agreement will be
concurrent with the term of the CCB Agreement (the "Employment
Period"), unless earlier terminated in accordance with Section 6
hereof.
4. Extent of Service. During the Employment Period, and
excluding any periods of vacation and sick leave to which Executive
is entitled, Executive agrees to devote his business time,
attention, skill and efforts to the faithful performance of his
duties hereunder and under the CCB Agreement; provided, however,
Executive may engage in such incidental activities as are permitted
under the CCB Agreement.
5. Compensation and Benefits. During the Employment Period,
Executive's compensation and benefits for service to American
Federal will be provided by CCB in accordance with the terms of
Section 5 of the CCB Agreement, which terms are incorporated herein
by reference.
6. Termination of Employment. Executive's employment with
American Federal under this Agreement will terminate (i) under the
same circumstances as, (ii) simultaneously with, and (iii) with the
same consequences as, the termination of his employment with CCB
under the terms of Sections 6, 7 and 8 of the CCB Agreement, which
terms are incorporated herein by reference. Any termination
benefits shall be payable only once (i.e., not under both
Agreements). Notwithstanding the above, the Board of Directors of
American Federal may terminate Executive's employment hereunder at
any time, but any such termination other than for Cause (as defined
in the CCB Agreement) shall not prejudice Executive's right to
compensation or other benefits under this Agreement or the CCB
Agreement. As provided in the CCB Agreement, if such termination
is for Cause, Executive shall have no right to receive compensation
or other benefits hereunder or under the CCB Agreement for any
period after termination.
7. Regulatory Intervention. Notwithstanding anything in
this Agreement to the contrary, this Agreement is subject to the
following terms and conditions:
(a) If Executive is suspended and/or temporarily prohibited
from participating in the conduct of American Federal's affairs by
a notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), American
Federal's obligations hereunder shall be suspended as of the date
of service unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, American Federal shall (i) pay
Executive all or part of the compensation withheld while American
Federal's contract obligations were suspended, and (ii) reinstate
any of American Federal's obligations which were suspended.
(b) If Executive is removed and/or permanently prohibited
from participating in the conduct of American Federal's affairs by
an order issued under Section 8(e)(4) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(4) and (g)(1)), all
obligations of American Federal under this Agreement shall
terminate as of the effective date of the order, but vested rights
of the parties shall not be affected.
(c) If American Federal is in default (as defined in Section
3(x)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813
(x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but any vested rights of executive shall not
be affected.
(d) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of the contract
is necessary for the continued operation of American Federal, (i)
by the Office of Thrift Supervision ("OTS") at the time the Federal
Deposit Insurance Corporation ("FDIC") enters into an agreement to
provide assistance to or on behalf of American Federal under the
authority contained in Section 13(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1823 (c)); or (ii) by the OTS at the time
the OTS approves a supervisory merger to resolve problems related
to operation of American Federal or when American Federal is
determined by the OTS to be in an unsafe or unsound condition. Any
rights of Executive that shall have vested under this Agreement
shall not be affected by such action.
(e) With regard to the provisions of this Section 7(a)
through (d):
(i) American Federal agrees to use its best efforts to
oppose any such notice of charges as to which there are
reasonable defenses;
(ii) In the event the notice of changes is dismissed or
otherwise resolved in a manner that will permit American
Federal to resume its obligations to pay compensation
hereunder, American Federal will promptly make such payment
hereunder; and
(iii) During the period of suspension , the vested
rights of the contracting parties shall not be affected except
to the extent precluded by such notice.
(f) American Federal's obligations to provide compensation or
other benefits to Executive under this Agreement or the CCB
Agreement shall be terminated or limited to the extent required by
the provisions of any final regulation or order of the Federal
Deposit Insurance Corporation promulgated under Section 18(k) of
the Federal Deposit Insurance Act (12 U.S.C. 1828(k)) limiting or
prohibiting any "golden parachute payment" as defined therein, but
only to the extent that the compensation or payments to be provided
under this Agreement or the CCB Agreement are so prohibited or
limited.
8. Legal Expenses. To the extent not paid by CCB under the
CCB Agreement, American Federal agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest (to the
extent that Executive is successful, in whole or in part, in such
contest) by American Federal, Executive or others of the validity
or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a
result of any contest by Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended.
9. Assignment and Successors.
(a) Executive. This Agreement is personal to Executive and
without the prior written consent of American Federal shall not be
assignable by Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive's legal representatives.
(b) American Federal. This Agreement shall inure to the
benefit of and be binding upon American Federal and its successors
and assigns. American Federal will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of American Federal to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that
American Federal would be required to perform it if no such
succession had taken place. As used in this Agreement, "American
Federal" shall mean American Federal as hereinbefore defined and
any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law or
otherwise.
10. Miscellaneous.
(a) No Mitigation. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment shall
be offset or reduced by the amount of any compensation or benefits
provided to Executive in any subsequent employment.
(b) Waiver. Failure of either party to insist, in one or
more instances, on performance by the other in strict accordance
with the terms and conditions of this Agreement shall not be deemed
a waiver or relinquishment of any right granted in this Agreement
or of the future performance of any such term or condition or of
any other term or condition of this Agreement, unless such waiver
is contained in a writing signed by the party making the waiver.
(c) Severability. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be
invalid, illegal or unenforceable, either in whole or in part, such
invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of the remaining provisions or
covenants, or any part thereof, of this Agreement, all of which
shall remain in full force and effect.
(d) Other Agents. Nothing in this Agreement is to be
interpreted as limiting American Federal from employing other
personnel on such terms and conditions as may be satisfactory to
it.
(e) Entire Agreement. Except as provided herein, this
Agreement and the CCB Agreement contain the entire agreement
between American Federal and Executive with respect to the subject
matter hereof and such Agreements supersede and invalidate any
previous agreements or contracts including employment agreements by
and between American Federal and Executive. No representations,
inducements, promises or agreements, oral or otherwise, which are
not embodied herein or in the CCB Agreement, shall be of any force
or effect.
(f) Governing Law. Except to the extent preempted by
federal law, the laws of the State of North Carolina shall govern
this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(g) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing
and shall be deemed to have been duly given if delivered or seven
days after mailing if mailed, first class, certified mail, postage
prepaid:
To American Federal:American Federal Bank, FSB
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Attention: Chairman of the Board of Directors
To Executive: Michael A. Trimble
300 East McBee Avenue
Greenville, South Carolina 29601
Facsimile No. (864) 255-7504
Any party may change the address to which notices, requests,
demands and other communications shall be delivered or mailed by
giving notice thereof to the other party in the same manner
provided herein.
(h) Amendments and Modifications. This Agreement may be
amended or modified only by a writing signed by both parties
hereto, which makes specific reference to this Agreement.
(signatures on following page)
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Employment Agreement as of the date first above
written.
AMERICAN FEDERAL BANK, FSB
By: /s/ C. DAN JOYNER
Title: Chairman, Compensation Committee
TRIMBLE:
/s/ MICHAEL A. TRIMBLE
Michael A. Trimble
Acknowledged and agreed to:
CCB FINANCIAL CORPORATION
By: /s/ ERNEST C. ROESSLER
Title: President and CEO
CCB FINANCIAL CORPORATION
NEWS RELEASE
For release August 1, 1997, 8:00 a.m.
Media Contacts: Robert L. Savage, Jr., CCB (919) 683-7645
Michael A. Trimble, AMFB (864) 255-7595
CCB Financial Corporation and American Federal Bank Announce
Completion of Merger
Durham, North Carolina -- CCB Financial Corporation
(NYSE:CCB) and American Federal Bank (AMFB) jointly announced
today the completion of their merger. Based on the closing price
of CCB Financial Corporation's common stock on July 31, 1997, the
transaction has an indicated value of approximately $ 410.3
million.
Effective with the opening of business on August 1, 1997,
American Federal will continue to operate under its own name as a
wholly-owned subsidiary of CCB in South Carolina. This
combination of Durham, N.C.-based CCB and Greenville, S.C.-based
AMFB forms a financial institution with $7 billion in assets and
$5.8 billion in deposits -- the sixth largest in the Carolinas.
"We are very pleased to complete our merger with American
Federal. Due to the combined efforts of both companies, we are
on target for converting and integrating our operational systems
during the weekend of September 6 and 7. This merger brings
together the strengths of two high-performing organizations and
extends CCB's franchise further down the high-growth Interstate
85 corridor. We are very excited about the combination and are
moving forward to achieve the opportunities available to us,"
said CCB president and chief executive officer Ernest Roessler.
"Both institutions have solid capital positions, excellent credit
quality, and strong branch office networks, as well as very
compatible corporate cultures," Roessler added.
William L. "Roy" Abercrombie has become a vice chairman of
CCB and will remain president and chief executive officer of
AMFB. Other members of the AMFB board that have been added to
the CCB board of directors are Blake P. Garrett, Jr., C. Dan
Joyner and David E. Shi. "We are pleased to have found such a
high-performing partner as CCB. Our employees, customers and
communities can look forward to receiving the same high quality
of service that they have expected from us, but they will also
have the benefit of an expanded array of products and services that CCB
has such as trust services, financial planning, investment
services, computer banking, telebanking, commercial services and
one of the top-rated credit cards in the country," said
Abercrombie.
CCB Financial Corporation is a bank holding company whose
principal subsidiaries are Central Carolina Bank and Trust
Company of Durham, NC and American Federal Bank, FSB of
Greenville, SC. CCB is one of the fastest growing and best-
positioned franchises in America and currently provides financial
services through 202 offices, including 11 that are open 7 days a
week inside Harris Teeter supermarkets, 207 ATMs, its Telebanking
Center and consumer and business on-line banking.
###
