EXHIBIT 10 (h)
AGREEMENT
THIS AGREEMENT is made and entered into this _27th_ day of _October_
1998, by and between Coastal Federal Savings Bank, (the "Bank"), Myrtle Beach,
South Carolina; and Steven J. Sherry (the "Executive").
The Bank wishes to employ the Executive in the capacity of Executive
Vice President, Marketing. The Executive desires to be employed in such
capacity. Accordingly, in consideration of the respective promises and
conditions contained in this Agreement, the Bank and the Executive agree as
follows:
1. Terms.
The term of this Agreement shall be deemed to have commenced
as of the date first above written and shall continue for a period of twelve
(12) full calendar months thereafter. Commencing on the first anniversary date,
and continuing at each anniversary date thereafter, the Board of Directors of
the Bank (the "Board") shall consider extension of the Agreement for an
additional year, the results thereof shall be included in the minutes of the
Board's meeting.
2. Payment in the Event of a Change in Control
a. For the purposes of this Agreement, a "Change in Control" of
Coastal Financial Corporation shall be deemed to occur if and
when
(1) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
the beneficial owner, directly or indirectly, of securities of
Coastal Financial Corporation representing 25 percent or more
of the combined voting power of Coastal Financial
Corporation's then outstanding securities;
(2) the membership of the Board of Directors of Coastal
Financial Corporation changes as the result of a contested
election, such that individuals who were directors at the
beginning of any 24-month period (whether commencing before or
after the effective date of this Agreement) do not constitute
a majority of the Board at the end of such period; or
(3) shareholders of Coastal Financial Corporation approve a
merger, consolidation, sale or disposition of all or
substantially all of the assets of Coastal Financial
Corporation, or a plan of partial or complete liquidation.
b. If, within one year after the occurrence of a Change in
Control, the Executive's employment is terminated, unless
termination is because of his death, or for disability, the
Executive shall be entitled to 1.0 times the Executive's
average "base amount" for the preceding five (5) calendar
years, within the meaning of Section 280G(b)(3) of the
Internal Revenue Code of 1986 ("Code"), as amended. In the
event the Executive has been employed by the Bank for less
than five (5) calendar years preceding the Change in Control,
the Executive's base amount shall be determined by reference
to the period during which he has been employed by the Bank,
with any period of less than one full year annualized. In the
event that a Change in Control occurs during his initial year
of employment hereunder, the Executive's base amount shall be
annualized. Any payment to the Executive made under this
subparagraph shall be made, at the Executive's election,
either in a lump sum payable within ten days, of the Change in
Control, or in substantially equal installment payments over a
one year period. The Executive is entitled to a monetary
payment and may elect the method of payment only in the event
that his termination occurs within one year after a Change in
Control.
c. If within one year after the occurrence of a Change in
Control, a material change in the Executive's duties or
responsibilities, would cause Executive's position to become
one of lesser responsibility, importance, or scope from the
position and attributes as described in the Executive's job
description prior to the Change in Control, Executive shall be
entitled to 1.0 times the Executive's average "base amount" as
set forth in Section 2(b) hereof.
4. Source of Payments
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank.
5. Applicable Law
The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the state of South Carolina,
and further agree that any litigation regarding this Agreement shall be
brought and litigated in the state or federal courts located in South
Carolina. Accordingly, the Executive consents to personal jurisdiction
in the state and federal courts in South Carolina.
6. Headings
The headings or titles of sections are for convenience of reference
only and do not constitute a part of this Agreement.
7. Severability
The parties agree that each paragraph of this Agreement and each
provision within each paragraph is severable from the remainder of the
Agreement, and further agree that if any portion of this Agreement
shall be severed, the remainder of the Agreement shall be enforced
according to its terms and to the fullest extent permitted by law.
8. Waiver
Any failure or default by any party to this Agreement to exercise any
right or enforce any obligation under this Agreement shall not
constitute a waiver of such right or obligation and shall not preclude
the future exercise or enforcement thereof.
9. Assignment
Nothing in this Agreement shall preclude the Bank, with or without the
consent of the Executive, from assigning the rights, duties, and
obligations under this Agreement to an affiliated corporation or to any
other corporation or entity with which the Bank shall merge or
consolidate or otherwise transfer its assets or stock. Upon such an
assignment and assumption, the term "The Bank," as used herein, shall
refer to such assignee corporation or entity, and this Agreement shall
continue in full force and effect. This Agreement may not be assigned,
pledged, or otherwise encumbered by the Executive without the Bank's
prior written consent.
10. Modification
This Agreement constitutes the entire understanding of the parties with
respect to the subject matter herein and supersedes any other oral or
written agreements or understandings with respect thereto, which
agreements and understandings, if any, are hereby terminated. This
Agreement may not be modified in any manner whatsoever, except by a
writing signed by the Executive and the Bank's Chief Executive Officer
or Chairman of the Board of Directors.
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Date Coastal Federal Savings Bank
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Date Coastal Financial Corporation
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Date Executive
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Date Witness