Exhibit 10.34
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into and
made effective this 3rd day of November, between Thomas A. Betts, Jr. ("Betts"),
and Centura Insurance Services, Inc. ("CIS"), a wholly-owned subsidiary of
Centura Banks, Inc. ("Centura"), a North Carolina bank holding corporation.
WHEREAS, Betts has been and is currently associated with Betts & Company, a
general partnership engaged in all facets of the insurance business with its
principal offices in Rocky Mount, North Carolina; and
WHEREAS, Centura Banks, Inc. has acquired Betts & Company (the
"Acquisition") and combined, or intends to combine, Betts' insurance activities
with those of CIS; and
WHEREAS, CIS desires to provide for Betts' continued employment with CIS
following the Acquisition; and
WHEREAS, CIS desires to enter into this Agreement with Betts to set forth
the terms of such employment; and
WHEREAS, Betts agrees that the terms of this Agreement will allow him to be
employed with and to devote his best efforts to CIS.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, the parties agree as follows:
1. EMPLOYMENT.
CIS shall employ Betts as an insurance agent of CIS, with the duties,
responsibilities and powers as assigned to him from time to time by the Board of
Directors of CIS and as customarily associated with such position. Betts shall
faithfully and diligently discharge his duties and responsibilities under this
Agreement. Nothing contained in this Section 1 or elsewhere in this Agreement,
however, will prevent or otherwise prohibit Betts from engaging in and pursuing
personal affairs not inconsistent with his duties and responsibilities under
this Agreement or prevent or prohibit Betts from managing and otherwise tending
to his personal investments, in each case so long as the same does not interfere
with the performance of his duties and responsibilities under this Agreement.
2. TERM.
The initial term of this Agreement shall be five (5) years, commencing on
the date hereof (the "Initial Term"). Upon the expiration of the Initial Term,
this Agreement may be renewed for successive periods of one (1) year upon the
mutual agreement of Betts and CIS (the "Renewal Terms").
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3. COMPENSATION AND BENEFITS.
(a) Base Salary. During the Initial Term of this Agreement, CIS shall pay
to Betts as compensation for his services to CIS, a base salary of $240,000 per
year, payable in equal monthly installments. In the event this Agreement is
renewed pursuant to Section 2 hereof, the base salary payable hereunder for each
Renewal Term may be increased from time to time in the discretion of the Board
of Directors of CIS, which Board, in making such adjustments, shall consider,
among other pertinent factors, industry standards, similarly situated employees,
and the profitability of Centura "East" Insurance Group.
(b) Commissions. In addition to the base salary, for the Initial Term of
this Agreement, Betts shall be entitled to receive additional compensation equal
to:
(i) thirty-five percent (35%) of the commissions earned by the Centura
"East" Insurance Group on new commercial and personal lines property and
casualty, group life, and health insurance policies sold by Betts; and
(ii) thirty percent (30%) of the commissions earned by the Centura
"East" Insurance Group on renewal policies for new commercial and personal
lines property and casualty, group life, and health insurance sold by Betts
after the date hereof.
The additional compensation described in this Section 3(b) shall be subject
to change in the event this Agreement is renewed by Betts and CIS; provided,
however, in no event will future commissions paid to Betts be less favorable
than those paid under the standard compensation package available to other
similarly situated employees of CIS.
(c) Separate Consideration. In addition to the base salary and commissions
described in this Section 3, Betts shall receive the sum of $5,000.00 upon
execution of this Agreement, as separate consideration for the covenants set
forth in Section 6 hereof.
(d) Other Benefits. The above-stated compensation shall not be deemed
inclusive nor prevent Betts from receiving any other compensation provided by
CIS, and he shall be entitled, in any event (either directly or through salary
adjustment), to health and hospitalization insurance (including major medical),
long-term disability insurance, and life insurance, all in accordance (except as
otherwise expressly provided herein) with CIS's insurance plans for officers and
employees in comparable positions as such plans may be modified from time to
time. For so long as Betts is an employee of CIS, Betts shall be entitled to
participate in all current and future employee benefit plans and arrangements in
which employees of CIS in comparable positions are permitted to participate.
4. TERMINATION.
Betts' employment under this Agreement shall terminate:
(a) Death. Upon the death of Betts.
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(b) Disability. Upon notice from CIS to Betts in the event Betts becomes
"permanently disabled." For purposes of this Agreement, Betts shall be deemed
"permanently disabled" six (6) months after the first date that he has become
disabled by bodily or mental illness, disease, or injury, to the extent that he
is prevented from performing his material and substantial duties of employment,
and such disability has continued uninterrupted for six (6) months. If the
parties or their representatives cannot agree as to whether Betts is
"permanently disabled," as defined herein, they shall choose a physician to
examine Betts for the purpose of determining or confirming the existence or
extent of any disability. If the parties or their representatives cannot agree
on the choice of a physician to make such examination, each party or its
representative shall select one physician to make such examination and the two
physicians selected shall select a third physician to make such examination and
the three examining physicians shall by majority vote determine or confirm the
existence or extent of any disability. Notwithstanding the foregoing, before
terminating Betts in the event of his permanent disability, CIS shall offer
Betts reasonable accommodation pursuant to the Americans with Disabilities Act,
in which case Betts' duties and compensation hereunder may be adjusted in
accordance with such accommodation. Betts shall have the right to decline CIS's
offer of accommodation and, in such case, Betts' employment under this Agreement
shall terminate as provided herein.
(c) Cause. Upon notice from CIS to Betts for cause. For purposes of this
Agreement, "cause" shall be defined as (i) a willful and continued failure by
Betts to perform his duties in the capacities indicated above (other than due to
disability); or (ii) a material breach by Betts of his fiduciary duties of
loyalty or care to CIS or Centura, as established by the Board of Directors of
Centura (other than due to disability); or (iii) a willful violation by Betts of
any material provision of this Agreement; or (iv) a conviction of, or the
entering of a plea of nolo contendere by Betts for any felony or any crime
involving fraud or dishonesty; or (v) a willful violation of any material
federal or state laws or regulations applicable to CIS or Centura. In addition,
if Betts shall terminate his employment for a breach of this Agreement by CIS in
accordance with Section 4(d) hereof, and it is ultimately determined that no
reasonable basis existed for Betts' termination on account of the alleged
default of CIS, such event shall be deemed cause for termination by CIS.
Any notice of termination of Betts' employment with CIS for cause shall set
forth in reasonable detail the facts and circumstances claimed to provide the
basis for termination of his employment under the provisions contained herein
and the date of termination (the "Termination Date"). If the cause alleged by
CIS shall be (i), (ii), or (iii) set forth above, Betts shall be given the
opportunity to cure the breach within a reasonable period of time upon receipt
of notice but in no event to exceed thirty (30) days, unless such breach is not
reasonably susceptible to being corrected within thirty (30) days, in which case
Betts shall have the opportunity to cure such breach, provided that Betts has
commenced corrective action within such thirty (30) day period and diligently
pursues such action to completion.
(d) Breach. Upon notice from Betts to CIS of CIS's failure to comply with
any material provision of this Agreement, provided that CIS shall have thirty
(30) days from the receipt of such notice to cure any default under this
Agreement. If such default shall be cured or if CIS shall have taken steps to
cure the default within the thirty (30) day period and diligently pursues such
action to completion, Betts shall have no right to terminate his employment
under the provisions of this Section 4(d).
(e) Expiration of Term. Upon the expiration of the Initial Term of this
Agreement, if not renewed by the parties as set forth in Section 2 hereof.
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5. COMPENSATION AND BENEFITS PAYABLE UPON TERMINATION.
(a) Upon Betts' death during the Initial Term or any Renewal Term of this
Agreement, CIS shall provide such death or insurance benefits as are provided in
accordance with the regular policy of CIS to similarly positioned employees and
pursuant to the terms of any benefit plans or arrangements maintained by CIS
which provide such benefits.
(b) In the event Betts becomes permanently disabled and is terminated as
set forth in Section 4(b) hereof, CIS shall pay to Betts or his estate or
beneficiaries for the balance of the then current term of this Agreement, the
then existing base salary set forth in Section 3 hereof, provided that such
payment shall be offset by any amounts received by Betts (i) under any long term
disability plan maintained for the employees of CIS, (ii) from any other
collateral source payable due to disability to the extent that such payments are
derived from insurance or direct payments furnished by CIS, and (iii) social
security benefits. Betts agrees to use reasonable efforts to obtain the benefit
of any disability plan or policy covering him as a result of his employment by
CIS in the circumstances contemplated by Section 4(b) and this Section 5(b).
(c) If Betts' employment shall be terminated by Betts pursuant to Section
4(d) hereof, CIS shall continue to pay to Betts or his estate his full base
salary in effect at the Termination Date and all applicable benefits due
hereunder (provided that the terms of any employee benefit plan pursuant to
which such benefits are provided permit participation by similarly positioned
former employees of CIS, as applicable) for the balance of the then current term
of this Agreement, provided that such payments shall not be made after the
expiration of the then current term of this Agreement; and provided further that
such payments shall be offset by any amounts paid to Betts under any severance
or salary continuation policy or plan of CIS applicable to Betts.
(d) In the event termination is for cause as described in Section 4(c)
hereof or is due to the expiration of the Initial Term or any Renewal Term of
this Agreement, CIS shall pay Betts the compensation and benefits described in
Section 3 hereof through the Termination Date and no other compensation or
benefits shall be paid to Betts hereunder; provided, however, that nothing
herein shall be deemed to terminate or limit the Betts' vested rights under any
other benefit, retirement, or pension plan of CIS applicable to Betts, and the
terms of those plans, programs, or arrangements shall govern.
6. CONFIDENTIALITY AND COVENANT NOT TO COMPETE.
(a) Covenants. Betts hereby acknowledges that, by virtue of his employment
by CIS, Betts will be in possession of and gain certain valuable knowledge and
develop certain expertise with respect to the business of insurance, generally,
and the business of CIS and Centura, specifically, including certain
confidential information and trade secrets relating to such business and
information relating to certain customers and potential customers of CIS and
Centura. In connection with, and in view of the foregoing, Betts hereby agrees
that, during the term of his employment pursuant to this Agreement:
(i) he will not, directly or indirectly, engage in, or participate in
the promotion, financing, ownership or management of, or otherwise provide
services to, any firm, corporation, or business (whether as an employee,
officer, director, agent, owner, partner, shareholder, consultant, or
otherwise), the purpose or result of which, in whole or in part, is to
assist
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such firm, corporation, or business in the buying or selling of insurance
in competition with CIS or Centura within 100 miles of any office of CIS,
Centura or Centura Bank, a wholly-owned subsidiary of Centura, including
the principal office of any of them;
(ii) he will not, directly or indirectly in competition with CIS or
Centura, call upon, solicit, sell to, attempt to sell to, or otherwise
engage in or attempt to engage in the business of buying and selling
insurance with, any firm, corporation, person or business that is a
customer of CIS, Centura or Centura Bank at the time of such activity, or
was a customer of CIS, Centura or Centura Bank at any time during the term
of his employment pursuant to this Agreement;
(iii) he will hold in a fiduciary capacity for the benefit of CIS and
Centura, and will not directly or indirectly use or disclose, except as
required in Betts' judgment in connection with the performance of his
duties, as required by law or judicial or regulatory proceedings or as
authorized by CIS or Centura, any "Company Information" (as defined below)
that Betts may have or acquire (whether or not developed or compiled by
Betts) during the Initial Term and any Renewal Term of this Agreement. The
term "Company Information" as used in this Agreement shall mean
confidential or proprietary information, including technical and financial
information and customer or client lists, relating to CIS or Centura or its
programs or procedures, including without limitation, information received
by CIS or Centura from third parties under confidential conditions. The
term "Company Information" shall also include, without limitation,
Centura's computer data-base, forms and form letters, form contracts,
information regarding specific transactions, financial information and
estimates and long-term planning and goals. The term "Company Information"
shall not include information that has become generally available to the
public by the act of one who has the right to disclose such information
without violating any right of CIS or Centura; and
(iv) he will hold in a fiduciary capacity for the benefit of CIS and
Centura and will not directly or indirectly use or disclose, except as
required in Betts' judgment in connection with the performance of his
duties, as required by law or judicial or regulatory proceedings or as
authorized by CIS or Centura, any "Customer Information" (as defined below)
that Betts may have or acquire (whether or not developed or compiled by
Betts and whether or not Betts has been authorized to have access to such
Customer Information) during the Initial Term and any Renewal Term of this
Agreement. The term "Customer Information" as used in this Agreement shall
mean confidential or proprietary information, including technical and
financial information and customer lists received by CIS, Centura or Betts
from any customer or potential customer of CIS or Centura, and shall
include any information subject to the provisions of the federal Right to
Financial Privacy Act. The term "Customer Information" shall not include
information that has become generally available to the public by the act of
one who has the right to disclose such information without violating any
right of the customer to which such information pertains.
(b) Post Termination Covenants. Betts hereby agrees to honor the covenants
expressed in Section 6(a) hereof for a period of three (3) years following
termination of this Agreement in the event such termination is for "cause"
pursuant to Section 4(c) hereof, or in the event CIS fails to offer to renew
this Agreement or Betts elects not to renew this Agreement following the
expiration of the Initial Term and any Renewal Term hereof, unless such election
results from an offer by CIS to renew this Agreement on terms and conditions
that are not substantially the same as, or at least equal or comparable to,
those contained in this Agreement, including salary, benefits, and duties.
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(c) Betts agrees and acknowledges that, if a violation of any covenant
contained in this Section 6 occurs or is threatened, such violation or
threatened violation will cause irreparable injury to CIS and Centura, that the
remedy at law for any such violation or threatened violation will be inadequate
and that CIS and Centura shall be entitled to appropriate equitable relief.
(d) The covenants contained in this Section 6 shall inure to the benefit of
CIS and Centura, any successor or subsidiary of either of them.
(e) The restrictions contained in this Section 6 are considered by the
parties hereto to be fair and reasonable and necessary for the protection of the
legitimate business interests of CIS and Centura.
(f) In the event of a termination of this Agreement by Betts pursuant to
Section 4(d) hereof, the restrictions contained in this Section 6 shall no
longer apply to Betts from and after the Termination Date.
(g) In the event CIS fails to offer to renew this Agreement after the
Initial Term or any Renewal Term, the restrictions contained in this Section 6
shall no longer apply to Betts.
7. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of CIS or Centura, and CIS and
Centura shall require any such successor to expressly assume and agree to
perform this Agreement. As used in this Agreement, "Centura" shall mean Centura
as hereinbefore defined and any successor to its business and/or assets as
aforesaid.
(b) This Agreement shall inure to the benefit of and be enforceable by
Betts' personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If Betts should die while any amount
would still be payable hereunder, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to Betts'
estate.
8. MONETARY DAMAGES.
Notwithstanding any provision of this Agreement to the contrary, Betts
shall not be liable to CIS for monetary damages in the event of a violation or
breach of any of the provisions or covenants of this Agreement, except to the
extent that any such violation or breach is of the covenants set forth in
Section 6 hereof.
9. MISCELLANEOUS.
(a) All notices required or permitted hereunder shall be given in writing
by actual delivery or by registered or certified mail (postage prepaid) at the
following addresses or at such other places as shall be designated in writing:
Betts: Thomas A. Betts, Jr.
1516 Lafayette Avenue
Rocky Mount, North Carolina 27804
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CIS: Centura Insurance Services, Inc.
Post Office Box 1220
134 North Church Street
Rocky Mount, North Carolina 27804
Attention: Reid Rhodes
With a copy to: Centura Banks, Inc.
Post Office Box 1220
134 North Church Street
Rocky Mount, North Carolina 27804
Attention: H. Kel Landis, III
(b) References in this Agreement to "similarly positioned" or "similarly
situated" employees shall mean those employees of CIS of comparable rank and
level of responsibility and with comparable duties. The existence or
non-existence of a contract of employment with CIS shall not be relevant for the
purpose of identifying those employees (or, if appropriate, former employees) of
CIS who are "similarly positioned" or "similarly situated."
(c) If any provision of this Agreement shall be determined to be void by
any court of competent jurisdiction, then such determination shall not affect
any other provision of this Agreement, all of which shall remain in full force
and effect.
(d) The failure of the parties to complain of any act or omission on the
part of either party, no matter how long the same may continue, shall not be
deemed to be a waiver of any of its rights hereunder.
(e) This Agreement contains the entire agreement of the parties. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument. It may be changed or terminated only by a writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
discharge or termination is sought.
(f) This Agreement shall be construed and enforced in accordance with the
laws of the state of North Carolina, except as preempted by the Employee
Retirement Income Security Act of 1974, as amended.
IN WITNESS WHEREOF, Betts has executed this Agreement under seal by
adopting the word "SEAL" beside his name and CIS has executed this Agreement
under seal through its duly authorized officers as of the day and year first
above written.
/s/ Thomas A. Betts, Jr. (SEAL)
Thomas A. Betts, Jr.
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CENTURA INSURANCE SERVICES, INC.
By: /s/ Reid J. Rhodes
Reid J. Rhodes
Title: President
ATTEST:
/s/ Joseph A. Smith, Jr.
Joseph A. Smith, Jr.
Secretary
(Corporate Seal)
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