EXHIBIT 10.6
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into effective as of the 19th day of December, 2001 by and
between First Charter Corporation ("First Charter"), a North Carolina
corporation with its principal place of business in Charlotte, North Carolina,
and Robert E. James ("Executive"), an individual residing in Mecklenburg County,
North Carolina. (the Executive and First Charter may be referred to hereinafter
as the "Parties").
WITNESSETH:
WHEREAS, Executive is currently employed as a Group Executive Vice
President and of First Charter and is highly knowledgeable about the business
and operations of First Charter's subsidiaries and other affiliated
organizations and the respective markets and customers that they serve;
WHEREAS, Executive is a valued executive of First Charter and its
wholly owned subsidiary, First Charter Bank (the "Bank"), and, in order to
induce Executive to continue employment with First Charter and to enhance
Executive's job security, First Charter desires to enter into this Agreement
that will provide compensation to Executive in certain events, including but not
limited to Executive's termination of employment following a change in control
of First Charter, as hereinafter provided;
WHEREAS, because Executive has become familiar with and will continue
to gain extensive knowledge regarding First Charter and Bank products,
relationships, trade secrets and confidential information relating to First
Charter, the Bank and their respective customers' business, products, processes
and developments and has generated and will continue to generate confidential
information in the course of his duties, First Charter wishes to protect its
long-term interests by having Executive enter into certain non-disclosure and
non-competition covenants set forth in this Agreement; and
WHEREAS, First Charter desires to continue to employ Executive, and
Executive desires to continue to be employed by First Charter, subject to the
terms and conditions set forth in this Agreement, which the Parties agree shall
hereby supersede and replace Executive's prior July 21, 1999 Employment
Agreement with First Charter.
NOW, THEREFORE, in consideration of the terms contained herein,
including the compensation First Charter agrees to pay to Executive upon certain
events, Executive's continued employment with First Charter, Executive's
covenants and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, First Charter and Executive agree as follows:
1. EMPLOYMENT AND DUTIES.
A. During the Employment Term (as defined in Section 3
below), First Charter hereby employs Executive, and Executive hereby
agrees to serve, as a Group Executive Vice President of First Charter.
As such, Executive shall have responsibilities, duties and authority
reasonably accorded to, expected of, and consistent with Executive's
position as a Group Executive Vice President of First Charter and will
report directly to the President and Chief Executive Officer of First
Charter. Executive shall also perform the duties and exercise the
powers and functions that from time to time may be assigned or vested
in him by the Board of Directors of First Charter (the "Board") and/or
the Board of Directors of First Charter's subsidiaries in relation to:
(i) First Charter; and/or (ii) any subsidiary or affiliated company of
First Charter, including general responsibility for the management and
operations of the Bank. Executive hereby accepts this employment upon
the terms and conditions herein contained and, subject to Section 1(c),
agrees to devote substantially all of his business time, attention and
best efforts to promote and further the business of First Charter and
the Bank.
B. Executive shall faithfully adhere to, execute and
fulfill all lawful requests, instructions and policies made by the
Board or its authorized agent(s).
C. Except as specifically authorized in advance by the
Board, Executive shall not, during the Employment Term (as defined in
Section 3 below), be engaged as an employee or otherwise in any other
business or commercial activity pursued for gain, profit or other
pecuniary advantage. The foregoing limitations also shall not be
construed as prohibiting Executive from making personal investments in
such form or manner as will neither require his services in the
operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 3 hereof,
provided, however, that during the Employment Term (as defined in
Section 3 below), Executive may not beneficially own the stock or
options to acquire stock totaling more than 5% of the outstanding
shares of any corporation or entity, or otherwise acquire or agree to
acquire a significant present or future equity or other proprietorship
interest, whether as a stockholder, partner, proprietor, or otherwise,
with any enterprise, business or division thereof, that is engaged in
Competitive Activity (as defined in Section 8 below) with First Charter
and/or the Bank.
2. COMPENSATION. For all services rendered by Executive during
the Employment Term (as defined in Section 3 below), First Charter shall
compensate Executive as follows:
A. BASE SALARY. During the Employment Term (as defined
in Section 3 below), First Charter will pay Executive a semi-monthly
base salary as compensation for Executive's services hereunder of
$8,166.67, equivalent to $196,000.00 per year (the "Base Salary"),
payable on a regular basis in accordance with First Charter's standard
payroll procedures but not less than monthly, less applicable
deductions required by law. On at least an annual basis thereafter
during the Employment Term (as defined in Section 3 below), the Board
will review Executive's performance and, based upon the recommendations
of the Compensation Committee, may increase such Base Salary if, in its
discretion, such adjustment is warranted, with any such adjustment to
be effective beginning January 1 of the next following year.
B. BONUS. In addition to the Base Salary set forth
above, during the Employment Term (as set forth in Section 3 below) and
as long as Executive remains actively employed by First Charter,
Executive may receive an annual bonus from one or more arrangements
including but not limited to the Annual Incentive Plan, as such may be
in effect from time to time (collectively, the "Bonus"), the amount of
which shall be determined in the sole discretion of the Board. In
making its determination of the amount of the Bonus, if any, to be
paid, the Board may take into account, among other things: (i)
Executive's qualifications and experience; (ii) the duties and
responsibilities of Executive; (iii) the services performed and the
contributions of Executive to the success of First Charter and/or the
Bank; (iv) compensation patterns in similar businesses for similar
executives; (v) First Charter's financial resources to pay the bonus;
and (vi) such other factors as the Board shall deem to be relevant.
C. EXECUTIVE PERQUISITES, BENEFITS AND OTHER
COMPENSATION. During the Employment Term (as defined in Section 3
below), Executive shall be entitled to receive additional benefits and
compensation from First Charter in such form and to such extent as
specified below:
I. Payment of all or a portion of premiums for
coverage for Executive and his dependent family members under
health, hospitalization, disability, dental, life and other
insurance plans that First Charter may have in effect from
time to time. Benefits provided to Executive under this
Section 2(c)(ii) will require Executive to pay the same
proportion of premiums for, and shall provide benefits at
least equal to, the benefits then provided to First Charter's
other executive employees.
II. Reimbursement for all business travel and
other out-of-pocket expenses reasonably incurred by Executive
in the performance of his services pursuant to this
Agreement. All reimbursable expenses shall be appropriately
documented in reasonable detail by Executive upon submission
of any request for reimbursement, and in a format and manner
consistent with First Charter's expense reporting policy.
III. First Charter shall provide Executive with
other employee perquisites as may be available to or deemed
appropriate for Executive by the Board and participation in
all other company-wide employee benefits, including but not
limited to, any qualified and/or nonqualified retirements
plans sponsored by First Charter, as such are available from
time to time. Such current additional perquisites are listed
on Schedule A, which is attached hereto and incorporated
herein, and may be amended from time to time in the discretion
of the Board. In addition, Schedule B, which is attached
hereto and incorporated herein, lists those other supplemental
benefits in which Executive is currently entitled to
participate, and may be amended or modified from time to time
with the consent of the Parties.
3. TERM OF AGREEMENT. The Parties intend that the term of this
agreement provide the Executive with a three year contract that will expire when
the Executive attains age 65, unless the Agreement is terminated sooner as
provided in Section 4. Therefore, upon execution of this Agreement by Executive,
the initial term of Executive's employment under this Agreement shall be deemed
to have commenced on December 19, 2001 and shall continue until December 31,
2004 unless sooner terminated as provided in Section 4. In addition, on the last
day of each calendar month after December 31, 2001 until October 31, 2012, this
Agreement shall be deemed to have been automatically renewed and extended for an
additional one (1) month on the same terms and conditions contained herein in
effect as of the time of renewal, unless either party shall give written notice
of nonextention to the other party at least fifteen (15) days before the last
day of a month. Following October 31, 2015, this Agreement may be renewed and
extended on terms and conditions mutually agreed upon by the Parties. In
addition, Executive's total term of employment with First Charter during the
initial and any extended term is collectively defined and referred to under this
Agreement as the "Employment Term."
4. TERMINATION. In addition to the provisions set forth in
Section 3 above, the Employment Term shall terminate immediately upon the
occurrence of any of the following events: (a) immediately upon the retirement
or death of Executive; (b) upon the end of the time period specified in the
First Charter Corporation Omnibus Stock Option Plan following the Disability of
Executive (as defined below); (c) upon the effective date of Resignation by
Executive Without Good Reason (as defined below); (d) upon the effective date of
Resignation by Executive For Good Reason (as defined below); (e) upon the 60th
day following the date the Board gives Executive notice of Termination Without
Cause (as defined below); or (f) upon the close of business on the date the
Board gives Executive notice of Termination for Cause (as defined below).
A. RETIREMENT. "Retirement by Executive" shall mean any
voluntary retirement by Executive with the consent of the Board.
B. DISABILITY. "Disability" shall mean the inability of
the Executive to engage in his profession by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or which is to last or can be expected to last for a
continuous period of not less than twelve months, as determined by the
Board in its sole discretion upon certification thereof by qualified
physicians selected by the Board after such physician examines the
Executive.
C. RESIGNATION WITHOUT GOOD REASON. "Resignation Without
Good Reason" shall mean any voluntary termination or resignation by
Executive for any reason other than the retirement or death of
Executive, "Disability" or "Resignation for Good Reason". Executive is
required to give at least 60 days advance written notice of Resignation
Without Good Reason to the Board, and First Charter is entitled upon
receiving such notice, in its discretion, to accept such resignation as
effective on: (i) the resignation date proposed by Executive, or (ii)
such other earlier date designated by First Charter. In addition, First
Charter will be required to pay
Executive his regular salary and benefits only through Executive's
final resignation date as agreed to or revised by the Board, regardless
of whether Executive is actually permitted to perform any services for
First Charter during that period.
D. RESIGNATION FOR GOOD REASON. "Resignation For Good
Reason" shall mean any voluntary termination or resignation by
Executive for: (i) a material reduction in Executive's position,
duties, responsibilities or status, or a change in Executive's title
resulting in a material reduction in his responsibilities or position
with First Charter, in either case without Executive's consent, but
excluding for this purpose any isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied promptly by First
Charter after receiving notice from Executive and further excluding any
such reductions or changes made in good faith to conform with generally
accepted industry standards for Executive's position; (ii) a reduction
in the rate of Executive's Base Salary or a decrease in any Bonus to
which Executive was entitled pursuant to the First Charter Corporation
Annual Incentive Plan or incentive plans at the end of the most
recently concluded fiscal year, in either case without Executive's
consent; provided, however, that a decrease in Executive's Bonus amount
shall not constitute "Good Reason" and nothing herein shall be
construed to guarantee such bonus awards if performance, either by
First Charter or Executive, is below such targets as may reasonably and
in good faith be set forth in the First Charter Corporation Annual
Incentive Plan or other incentive arrangements; or (iii) the relocation
of Executive, without his consent, to a location outside a fifty (50)
mile radius of Charlotte, North Carolina.
Executive is required to give at least fifteen (15) days
advance written notice of Resignation For Good Reason to the Board, and
First Charter is entitled upon receiving such notice, in its
discretion, to accept such resignation as effective on the resignation
date proposed by Executive, or such other earlier date designated by
the Board.
E. TERMINATION WITHOUT CAUSE. "Termination Without
Cause" shall mean any termination of the employment of Executive by
First Charter for any reason other than termination due to the
retirement or death of Executive, "Disability" or "Termination for
Cause".
F. TERMINATION FOR CAUSE. "Termination for Cause" shall
mean termination of the employment of Executive by First Charter as the
result of Executive's: (i) willful misconduct of a material nature in
connection with the performance of his duties as an employee; (ii) use
of alcohol during working hours beyond that customarily authorized in
the performance of Executive's job duties, repeated use of alcohol
after working hours that materially interferes with Executive's duties
under this Agreement, use of illegal drugs, or violation of First
Charter's drug and/or alcohol policies; (iii) conviction, guilty plea
or plea of nolo contendere for any crime involving moral turpitude or
for any felony; (iv) embezzlement or theft from First Charter, the Bank
or any of their respective customers and employees; (v) gross
inattention to or dereliction of duty; (vi) commission or omission of
any act of fraud or dishonesty in connection with Executive's
employment with First Charter or the Bank; (vii) breach of any
fiduciary duty to First Charter or the Bank, including the duty of
loyalty; (viii) breach of the obligations set forth in Sections 7-9 of
this Agreement; (ix) breach, threatened breach or failure to perform
any other provision of this Agreement; or (x) performance of any other
willful act(s) which Executive knew or reasonably should have known
would be materially detrimental to First Charter or the Bank.
5. RIGHTS UPON TERMINATION. Following the termination of the
Employment Term for any reason, (i) Executive shall be entitled to any earned
but unpaid Base Salary, if any, due at the time of termination of the Employment
Term (ii) Executive shall have the general right to elect certain coverage
continuation under COBRA, and (iii) Executive will not forfeit any vested stock
options or vested 401(k) or pension benefits with First Charter and the Bank, if
any. Thereafter, except for any benefits or payments which may be due as set
forth in Section 5(a), 5(b), 5(d), 5(e) and Section 6(a), 6(b), 6(c) and 6(d)
below, Executive shall not be entitled to receive any additional compensation,
wages, bonuses, incentive pay, commissions, severance pay, consideration and/or
benefits of any kind from First Charter and/or the Bank hereunder upon the
termination of the Employment Term.
A. DEATH. If termination of the Employment Term occurs
at any time due to the death of Executive, then Executive's personal
representative shall be paid all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such amounts
to be paid in the same manner as provided in Section 2. In addition,
all supplemental benefits, awards, grants and options under any First
Charter or Bank supplemental agreement, stock option or grant will be
fully vested notwithstanding any other provision in such plan or grant.
B. DISABILITY. If termination of the Employment Term
occurs at any time due to the Disability of Executive, then Executive
shall be entitled to receive all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such amounts
to be paid in the same manner as provided in Section 2, less any
amounts which Executive receives from First Charter's long-term
disability plan. In addition, all supplemental benefits, awards, grants
and options under any First Charter or Bank supplemental agreement,
stock option or grant will be fully vested notwithstanding any other
provision in such plan or grant.
C. TERMINATION "FOR CAUSE" OR RESIGNATION "WITHOUT GOOD
REASON". If termination of the Employment Term occurs at any time due
to termination by First Charter "For Cause" or due to resignation by
Executive "Without Good Reason", then Executive shall be entitled only
to receive all earned but unpaid Base Salary, unreimbursed expenses
and/or accrued, vested stock options and vested 401(k) or pension
benefits through the effective date of the Termination "For Cause" or
Resignation "Without Good Reason".
D. TERMINATION "WITHOUT CAUSE" OR RESIGNATION "FOR GOOD
REASON". If termination of the Employment Term occurs at any time due
to termination by First Charter "Without Cause" or due to resignation
by Executive "For Good Reason", then Executive shall be entitled to (i)
all accrued, unpaid Base Salary and unreimbursed expenses through the
date of such termination; (ii) any prior year annual incentive bonus
earned but not yet paid; (iii) continued payment of Executive's Base
Salary for the greater of the remainder of the Employment Term or two
(2) years; (iii) an annual Bonus amount (calculated as the average of
the three most recent Bonuses) for the greater of the remainder of the
Employment Term or two (2) years; (iv) continuation of health and
welfare benefit coverage (including coverage for Executive's dependents
to the extent such coverage is provided by First Charter for its
employees generally) under such plans and programs to which an
Executive was entitled to participate immediately prior to the date of
the end of his employment for the greater of the remainder of the
Employment Term or two (2) years, provided such continued participation
is possible under the terms and provisions of such plans and programs;
and (v) acceleration of vesting of all supplemental benefits, including
but not limited to all awards, grants, and options under any First
Charter or Bank supplemental agreement, stock option plan or grant
notwithstanding any other provision in such plan or grant.
E. RETIREMENT WITH THE CONSENT OF FIRST CHARTER. If
Executive retires with the consent of First Charter, then Executive
shall be entitled to receive all earned but unpaid Base Salary and
accrued Bonus (as those terms are described in Section 2) and an
additional amount representing one (1) year's Base Salary, such amounts
to be paid in the same manner as provided in Section 2. In addition,
all awards, grants and options under any First Charter or Bank stock
option or grant will be fully vested notwithstanding any other
provision in such plan or grant.
F. DEDUCTIONS. All payments set forth in this Section 5
to Executive and/or his personal representative, if any, shall be made
subject to applicable withholdings as required by law.
6. TERMINATION FOLLOWING A CHANGE IN CONTROL.
A. The Parties agree that if, during the Employment
Term, a Change in Control (as defined in Section 6.a.ii. hereof) occurs
and if, within one (1) year following the Change in Control, the
employment of Executive is terminated by First Charter Without Cause
(as defined in Section 4.e. hereof), Executive's Compensation (as
defined in Section 6.a.iii. below) shall continue to be paid in monthly
installments, subject to applicable withholdings, by First Charter for
a period of thirty-five (35) months following such termination of
employment. Furthermore, if, within one (1) year following the Change
in Control, the employment of Executive is terminated by Executive for
Good Reason, Executive's Compensation (as defined in Section 6(a)(iii)
below) shall continue to be paid in monthly installments, subject to
applicable withholdings, by First Charter for the greater of the
remainder of the Employment Term or two (2) years.
In lieu of receiving payment of Compensation (as defined in
Section 6(a)(iii)) in installments for the such period, Executive may
elect, at any time prior to the earlier to occur of (i) a Change in
Control, or (ii) an action by the Board with respect to an event which
would, upon consummation, result in a Change in Control (which election
shall be evidenced by notice filed with First Charter), to be paid the
present value of any such Compensation in a lump sum within thirty (30)
days of termination of Executive's employment under circumstances
entitling such Executive to Compensation hereunder. The calculation of
the amount due shall be made by the independent accounting firm then
performing First Charter's independent audit, and such calculation,
including but not limited to any discount factor used to determine
present value, shall be conclusive.
(I) GOOD REASON. For purposes of this Section 6,
termination by Executive for "Good Reason" shall mean those
reasons set forth as "Good Reason" in Section 4(d) of this
Agreement, except that the change in Executive's position,
duties, responsibilities, status, title, Base Salary or Bonus
shall be measured for such matters as they were in effect
immediately preceding the Change in Control.
(II) CHANGE IN CONTROL. For purposes of this
Section 6, Change in Control" shall mean (A) the consummation
of a merger, consolidation, share exchange or similar
transaction of First Charter with any other corporation as a
result of which the holders of the voting capital stock of
First Charter as a group would receive less than 50% of the
voting capital stock of the surviving or resulting
corporation; (B) the sale or transfer (other than as security
for obligations of First Charter) of substantially all the
assets of First Charter; (C) in the absence of a prior
expression of approval by the Board, the acquisition of more
than 20% of First Charter's voting capital stock by any person
within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), other
than a person, or group including a person, who beneficially
owned, as of the date of this Agreement, more than 5% of First
Charter's securities; (D) during any period of two consecutive
years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at
least a majority thereof unless the election, or the
nomination for election by First Charter's shareholders, of
each new director was approved by a vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of the period; or (E) any other
change in control of First Charter of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Exchange Act or
the acquisition of control, within the meaning of Section
2(a)(2) of the Bank Holding Company Act of 1956, as amended,
or Section 602 of the Change in Bank Control Act of 1978, of
First Charter by any person, company or other entity.
(III) COMPENSATION. For purposes of this Section
6, Executive's Compensation shall consist of the following:
(A) Executive's Base Salary in effect immediately preceding
the Change in Control, plus (B) an annual bonus equal to the
average bonus (including, but not limited to, the "Bonus", as
that term is defined in Section 2(b) hereof and calculated as
a percentage of Base Salary, without regard to
vesting schedules or restrictions on the bonus compensation
and converting all post-employment payments in stock and stock
options to a cash present value) paid by First Charter for
each one-year performance period to Executive for the three
(3) most recent fiscal years ending prior to such Change in
Control pursuant to First Charter's incentive and bonus plans
or, if a relevant bonus program has not existed for three (3)
years preceding the Change of Control, an amount equal to the
estimated average bonus as calculated by the independent
accounting firm then performing First Charter's independent
audit, which calculation shall be conclusive.
B. Upon termination of Executive's employment entitling
Executive to Compensation set forth in Section 6(a) above, First
Charter shall maintain in full force and effect for the continued
benefit of Executive for such thirty-five month period health insurance
(including coverage for Executive's dependents to the extent dependent
coverage is provided by First Charter for its employees generally)
under such plans and programs in which Executive was entitled to
participate immediately prior to the date of such termination of
employment, provided that Executive's continued participation is
possible under the general terms and provisions of such plans and
programs. In the event that participation in any such plan or program
is barred, First Charter shall arrange to provide Executive with health
insurance benefits at First Charter's expense for such thirty-five
month period substantially similar to those which Executive would
otherwise have been entitled to receive under such plans and programs
from which his continued participation is barred. However, in no event
will Executive receive from First Charter the health insurance
contemplated by this Section 6(b) if Executive receives comparable
insurance from any other source.
In lieu of receiving the continued health insurance coverage
for the period described in the preceding paragraph, Executive may
elect, at any time prior to the earlier to occur of (i) a Change in
Control, or (ii) an action by the Board with respect to an event which
would, upon consummation, result in a Change in Control (which election
shall be evidenced by notice filed with First Charter), to be paid the
present value of any such continued health insurance coverage in a lump
sum within thirty (30) days of termination of Executive's employment
under circumstances entitling such Executive to Compensation hereunder.
The calculation of the amount due shall be made by the independent
accounting firm then performing First Charter's independent audit, and
such calculation, including but not limited to any discount factor used
to determine present value, shall be conclusive.
C. Upon termination of Executive's employment entitling
Executive to Compensation as set forth in Section 6(a) above, Executive
will become immediately vested in his benefits under his Supplemental
Agreement (as such was effective December 19, 2001), and in any and all
stock options and shares of restricted stock previously granted to him
by First Charter notwithstanding any provision to the contrary of any
plan under which the options or restricted stock are granted. Any
accrued but ungranted stock options or restricted stock shall also be
fully vested upon grant to Executive. Executive may exercise such
options only at the times and in the method described in such options.
All restrictions on shares of First Charter's stock granted under any
plan shall lapse upon a Change of Control. First Charter will amend
such options or plans in any manner necessary to facilitate the
provisions of this Section 6(c).
D. It is the intention of First Charter and Executive
that Executive receive the full benefits available under this Section 6
in the event of a Change in Control. If a Change of Control occurs and
a determination is made by legislation, regulation, ruling directed to
Executive or First Charter, or court decision that the aggregate amount
of any payment made to Executive hereunder, or pursuant to any plan,
program or policy of First Charter in connection with, on account of,
or as a result of, such Change in Control constitutes "excess parachute
payments" as defined in Internal Revenue Code (the "Code") section 280G
(as well as any successor or similar sections thereof), subject to the
excise tax provisions of Code section 4999 (as well as any successor or
similar sections thereof), Executive shall be entitled to receive from
First Charter, in addition to any other amounts payable hereunder, a
lump sum payment equal to 100% of such
excise tax, plus an amount equal to the federal and state income tax,
FICA, and Medicare taxes (based upon Executive's projected marginal
income tax rates) on such lump sum payment. The amounts under this
Section 6(d) shall be paid to Executive as soon as may be practicable
after such final determination is made. Executive and First Charter
shall mutually and reasonably determine whether or not such
determination has occurred or whether any appeal to such determination
should be made.
E. Except as elected by Executive with the prior consent
of First Charter, all payments provided for under this Section 6 shall
be paid in cash (including the cash values of stock options or
restricted stock, if any) from the general funds of First Charter, and
no special or separate fund shall be established, and no other
segregation of assets shall be made to assure payment, except as
provided to the contrary in funded benefits plans. Executive shall have
no right, title or interest whatsoever in or to any investments that
First Charter may make to aid First Charter in meeting its obligations
under this Section 6. Nothing contained herein, and no action taken
pursuant to the provisions hereof, shall create or be construed to
create a trust of any kind or a fiduciary relationship between First
Charter and Executive or any other person. To the extent that any
person acquires a right to receive payments from First Charter
hereunder, such right shall be no greater than the right of an
unsecured creditor of First Charter.
F. All payments set forth in this Section 6 to
Executive, if any, shall be made subject to applicable withholdings as
required by law.
7. COVENANT NOT TO DISCLOSE CONFIDENTIAL INFORMATION.
A. Executive understands that his position with First
Charter is one of trust and confidence because of Executive's access to
trade secrets and confidential and proprietary business information.
Executive pledges his best efforts and utmost diligence to protect and
keep confidential the trade secrets and confidential or proprietary
business information of First Charter.
B. Unless required by First Charter in connection with
his employment or with First Charter's express written consent,
Executive agrees that he will not, either during his employment or
afterwards, directly or indirectly, use, misappropriate, disclose or
aid anyone else in disclosing to any third party for Executive's own
benefit or the benefit of another: (1) all or any part of any of First
Charter's or its subsidiaries' trade secrets or confidential or
proprietary information, whether or not the information is acquired,
learned, or developed by Executive alone or in conjunction with others;
or (2) the details of any contracts, business transactions or
negotiations to which First Charter or its subsidiaries are a party or
of any tenders, offer or proposals submitted to or to be submitted by
First Charter and/or its subsidiaries in connection with their
business. Executive makes the same pledge with regard to the
confidential information of First Charter's and its subsidiaries'
customers, contractors, or others with whom First Charter or its
subsidiaries have a business relationship.
C. Executive understands that trade secrets and
confidential or proprietary information, for purposes of this
Agreement, shall include, but not be limited to, any and all versions
of First Charter's or its subsidiaries' computer software, hardware,
and documentation; all methods, processes, techniques, practices,
product designs, pricing information, billing histories, customer
requirements, customer lists, account data, loan records, employee
lists and salary/commission information, personnel matters, financial
data, operating results, plans, contractual relationships, and
projections for business opportunities for new or developing business
of First Charter or its subsidiaries; and all other confidential or
proprietary information, patents, ideas, know-how and trade secrets
which are in the possession of First Charter or its subsidiaries, no
matter what the source, including any such information that First
Charter or its subsidiaries obtain from a customer, contractor or
another party or entity and that First Charter treats or designates as
confidential or proprietary information, whether or not such
information is owned or was developed by First Charter.
D. Executive also agrees that all notes, records
(including all computer and electronic records), software, drawings,
handbooks, manuals, policies, contracts, memoranda, sales files,
customer lists, employee lists or other documents that are made or
compiled by Executive, or which were available to Executive while he
was employed at First Charter, in whatever form, including but not
limited to all such documents and data concerning any processes,
inventions, services or products used or developed by Executive during
his employment, shall be the property of First Charter. Executive
further agrees to deliver and make available all such documents and
data to First Charter, regardless of how stored or maintained and
including all originals, copies and compilations thereof, upon the
separation of his employment, for any reason, or at any other time at
First Charter's request.
E. Executive understands that First Charter expects him
to respect any trade secrets of confidential information of any of
Executive's former employers, business associates, or other business
relationships. Executive also agrees to respect First Charter's express
direction to Executive not to disclose to First Charter, its officers,
or any of its employees any such information so long as it remains
confidential.
8. COVENANT NOT TO COMPETE. For and in consideration of this
Agreement, the change in control protection contained herein and Executive's
continued employment with First Charter, Executive agrees that, unless
specifically authorized by First Charter in writing, Executive will not for a
period of two (2) years after his employment with First Charter has terminated
or ended (whatever the reason for the end of the employment relationship):
A. Engage in any "Competitive Activity" (as defined
below) within the "Restricted Territory" (as defined below);
B. Serve as an employee, director, owner, partner,
contractor, consultant or agent of, or own any interest in (except for
beneficially owning the stock or options to acquire stock totaling less
than 5% of the outstanding shares in a "public" competitor), any
person, firm or corporation that engages in "Competitive Activity"
within the "Restricted Territory"; or
C. Engage in any "Competitive Activity" with, for or
towards or divert, attempt to divert or direct others to divert any
business of First Charter from a then existing First Charter customer,
a joint venturer or other business partner of First Charter
(hereinafter referred to as an "affiliate"), or from a potential
customer identified through leads or relationships developed during the
last two (2) years of Executive's employment with First Charter, within
the "Restricted Territory".
Furthermore, Executive will not during his employment with First
Charter and for a period of three (3) years after his employment with First
Charter has terminated or ended (whatever the reason for the end of the
employment relationship) solicit or hire for employment or as an independent
contractor any employee of First Charter, the Bank or any of First Charter's
affiliates, or solicit, assist, induce, recruit, or assist or induce anyone else
to recruit, or cause another person in the employ of First Charter, the Bank or
any of First Charter's affiliates to leave his employment with First Charter,
the Bank or First Charter's affiliate for the purpose of joining, associating,
or becoming employed with any business or activity with which Executive is or
expects to be directly or indirectly associated or employed.
"Competitive Activity" means: (1) the business activities engaged in by
First Charter during Executive's employment with First Charter, including the
sales, marketing, distribution and provision of banking, financial and insurance
services or other products or services of the type of which Executive was
involved during his employment with First Charter; and/or (2) the performance of
any other business activities competitive with First Charter and/or the Bank for
or on behalf of any financial or insurance services entity.
"Restricted Territory" means: (1) the geographic area encompassing a
twenty-five (25) mile radius of Charlotte, North Carolina; and/or (2) any
Metropolitan Statistical Area (as defined by the United States
Department of Commerce) from which First Charter generated at least ten percent
(10%) of its gross annual revenue during the last two calendar years before the
end of Executive's employment with First Charter.
Executive further agrees that except with the express written consent
of the Board, Executive will not engage in any Competitive Activity individually
or with any entity or individual other than First Charter, the Board or its
subsidiaries during the Employment Term.
9. ACKNOWLEDGMENTS BY EXECUTIVE.
A. Executive acknowledges that the restrictions placed
upon him by Sections 7 and 8 of this Agreement are reasonable given the
nature of Executive's position with First Charter, the area in which
First Charter markets its products and services, and the consideration
provided by First Charter to Executive pursuant to this Agreement.
Specifically, Executive acknowledges that the length of the Covenant
Not to Disclose Confidential Information and Covenant Not to Compete in
Sections 7 and 8 are reasonable and that the definitions of
"Competitive Activity" and "Restricted Territory" are reasonable.
B. Executive acknowledges that all of the provisions of
the Agreement are fair and necessary to protect the interests of First
Charter. Accordingly, Executive agrees not to contest the validity or
enforceability of Sections 7 or 8 hereof.
C. Executive understands that every provision of this
Agreement is severable from each other provision of this Agreement.
Therefore, if any provision of this Agreement, including but not
limited to all provisions of Sections 7 and 8, is held invalid or
unenforceable, every other provision of this Agreement will continue to
be fully valid and enforceable. In the event that any provision of this
Agreement is determined by a court of competent jurisdiction to be void
or unenforceable, Executive and First Charter agree that such provision
shall be enforced to the extent reasonable under the circumstances and
that all other provisions shall be enforceable to the fullest extent
permissible by law. Executive and First Charter further agree that, if
any court makes such a determination, such court shall have the power
to reduce the duration, scope and/or area of such provisions and/or
delete specific words and phrases by "blue penciling" and, in its
reduced or blue penciled form, such provisions shall then be
enforceable as allowed by law.
D. Executive understands that his obligations under
Sections 7 and 8 of this Agreement will continue whether or not his
employment with First Charter is terminated voluntarily or
involuntarily, or with or without Cause or Good Reason.
10. BREACH BY EXECUTIVE. Executive agrees that in the event of any
breach or threatened breach of the provisions of Sections 7 and 8 hereof by
Executive, First Charter's remedies at law would be inadequate, and First
Charter shall be entitled to an injunction (without any bond or other security
being required), restraining such breach, and costs and attorneys' fees relating
to any such proceeding or any other legal action to enforce the provisions of
this Agreement, but nothing herein shall be construed to preclude First Charter
from pursuing any other remedies at law or in equity available to it for any
such breach or threatened breach. Moreover, Executive also agrees that if
Executive breaches any of Sections 8 or 9 above, Executive shall forfeit at the
time of the breach the right to any additional future payments or benefits under
this Agreement, except to the extent such benefits or payments are vested and
earned. In such case, Executive and First Charter agree that the confidential
information and non-compete obligations contained in this Agreement shall remain
valid and enforceable based upon the consideration actually paid.
11. ASSIGNMENT AND BINDING EFFECT. This Agreement shall be binding
upon, and inure to the benefit of, Executive and First Charter and the Bank and
their respective permitted successors and assigns. Neither this Agreement nor
any right or interest hereunder shall be assignable by Executive, his
beneficiaries, or legal representatives without the First Charter's prior
written consent. First Charter will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, share exchange or otherwise) to all or substantially all of the
business and/or assets of First Charter, by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform all of First
Charter's obligations under this Agreement in the same manner and to the same
extent that First Charter would be required to perform it if no such succession
had taken place, and to perform all obligations to Executive as provided in
Section 6. Failure of First Charter to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Executive to compensation from First Charter in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the date Executive's employment was terminated. As used in this
Agreement, "First Charter" shall mean First Charter as defined herein and any
successor to its business and/or assets as aforesaid that executes and delivers
the agreement provided for in this Section 11 or that otherwise becomes bound by
the all terms and provisions of this Agreement by operation of law.
12. COMPLETE AGREEMENT. This Agreement replaces any previous
agreement relating to the same or similar subject matter which the Executive and
First Charter may have entered into with respect to Executive's employment by
First Charter, including specifically the Employment Agreement entered into
between Executive and First Charter dated July 21, 1999. Executive has no oral
representations, understandings or agreements with First Charter or any of its
officers, directors or representatives covering the same subject matter as this
Agreement. This written Agreement is the final, complete and exclusive statement
and expression of the Employment Agreement between First Charter and Executive
and of all the terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified except by a further
writing signed by a duly authorized officer of First Charter and Executive, and
no term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term.
13. NOTICE. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To First Charter: Laura Nelson Blalock
SVP, Human Resources
First Charter Bank
P. O. Box 37927
Charlotte, North Carolina 28237-7937
To Executive: Robert E. James
2523 Monet Terrace
Charlotte, North Carolina 28226
Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other
party of such change in accordance with this Section 13.
14. HEADINGS. The section headings herein are for reference
purposes only and are not intended in any way to describe, interpret, define or
limit the extent or intent of the Agreement or of any part hereof.
15. GOVERNING LAW. This Agreement shall in all respects be
construed according to the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.
FIRST CHARTER CORPORATION
By: /s/ Lawrence M. Kimbrough
-------------------------
Name: Lawrence M. Kimbrough
Title: President and Director (Principal Executive Officer)
/s/ Robert E. James
-----------------------------
ROBERT E. JAMES
SCHEDULE A
- - Business related travel and entertainment expenses
- - Mobile telephone expenses
- - Country club membership dues
- - Civic club membership dues
- - Expenses related to business use of company provided car
SCHEDULE B
- - Medical Insurance
- - Dental Insurance
- - Short-term Disability with a seven (7) day elimination period, and a
benefit of at least 75% of base pay during illness for a maximum of
ninety (90) calendar days.
- - Long-term Disability with a ninety (90) day elimination period and a
benefit of 60% of base salary, up to $5,000 per month, once approved by
the Long-term Disability carrier.
- - Life Insurance equivalent to two times base pay, with a $500,000
maximum benefit.
- - Accidental Death and Dismemberment Insurance equivalent to two times
base pay, with a $500,000 maximum benefit.
- - First Charter Retirement 401(k) Plan
- - Benefit Restoration Match for contributions limited under the First
Charter Retirement 401(k) Plan
- - First Charter Money Purchase Pension Plan (merged into the First
Charter Retirement 401(k) Plan effective January 1, 2002)
- - OPT Capital Plan
- - Employee Stock Purchase Plan
- - Vacation of four (4) weeks for Executive Vice President
- - Supplemental Life Insurance policy
- - Supplemental Disability Income policy
- - Supplemental Agreement for Deferred Compensation