EXHIBIT 10.1
NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH CAROLINA
UNIFORM ARBITRATION ACT
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
This First Amendment ("Amendment") to the Noncompetition, Severance and
Employment Agreement by and between Stephen L. Chryst ("Executive") and The
South Financial Group, Inc. (f/k/a Carolina First Corporation) and Carolina
First Bank (collectively "Company") is entered into this 19th day of September,
2001.
WHEREAS, Company and Executive entered into the Employment Agreement dated
January 10, 2000, attached hereto as Exhibit A and incorporated herein by
reference ("Agreement"); and
WHEREAS, the parties desire to amend the Agreement as provided herein.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. THE DEFINITION OF "CAUSE" ON PAGE 5 OF THE AGREEMENT SHALL BE AMENDED
BY ADDING THE FOLLOWING NEW SUBSECTION (III) AT THE END:
(iii) In addition to (i) and (ii) above, effective September 19, 2001,
either in the absence of or after a Change in Control, (a) the
acquisition, offer or agreement to acquire by Executive, individually
or acting in concert with any other Person to acquire, directly or
indirectly, by purchase or otherwise, beneficial ownership of, or the
right to vote, any shares of capital stock of the Company or any
securities convertible into shares of capital stock of the Company in
excess of 2.0% of the Company's outstanding stock as of June 30, 2001;
(b) the solicitation by Executive, individually or acting in concert
with any Person, of "proxies," or directly or indirectly becoming a
"participant" or otherwise engaging in any "solicitation" (as such
terms are defined in Regulation 14A under the Securities Exchange Act
of 1934, as amended) with respect to any matter not recommended or
approved by a majority of the members of the Board of Directors of the
Company then in office; (c) the Executive, individually or acting in
concert with any Person, directly or indirectly, joining with or
assisting any Person, directly or indirectly, in actively opposing, or
making any statement in opposition to, any proposal submitted by the
Company's management to a vote of the Company's shareholders; provided,
however, this provision will not restrict Executive's ability to vote
any shares of stock held by Executive; (d) the Executive, individually
or acting in concert with any Person, joining with or assisting any
Person, directly or indirectly, in supporting or endorsing (including
supporting, requesting or joining in any request for a meeting of
shareholders in connection with), or making any statement in favor of,
or directly or indirectly soliciting proxies (defined as above) in
favor of, any proposal submitted to a vote of the Company's
shareholders that is opposed by the Company's management; (e) the
solicitation or initiation of any communication by Executive,
individually or acting in concert with any Person, regarding any
acquisition offers for the Company, whether by merger, sale of assets,
liquidation, exchange of shares or otherwise; (f) the failure by
Executive to promptly communicate and refer any offer or inquiry
received by Executive, or any Person acting in concert with Executive,
concerning the possible acquisition of the Company by merger, sale of
assets, liquidation, exchange of shares, or otherwise, directly and
solely to the Chairman of the Board of Directors and to the Chief
Executive Officer of the Company; (g) participation of Executive,
individually or acting in concert with any Person, directly or
indirectly, by encouragement or otherwise, in any litigation against or
derivatively on behalf of the Company, except for testimony which may
be required by law, and except as may occur in the ordinary course of
business with respect to any loan, deposit or other transaction where
Executive is dealing with the Company as a customer and except
Executive's enforcement of rights under the Agreement and Amendment;
(h) the Executive, individually or acting in concert with any Person,
making any libelous or slanderous statements or undertaking any
activity that discredits the Company or its reputation or goodwill, or
any of its present and former agents, employees, representatives,
attorneys, directors, officers, trustees, affiliated corporations,
predecessors, successors and assigns, services, products, policies, or
performances that are known or should be known to Executive to be or
have been affiliated with the Company with respect to their activities
with or business of the Company; or (i) the provision by Executive,
individually or acting in concert with any Person, of any funds,
services or facilities, to any Person in support of any activity by
such Person that would be a violation of this paragraph if such
covenants were undertaken by any such Persons.
2. SECTION 3, "DUTIES," SHALL BE AMENDED AND RESTATED IN ITS ENTIRETY AS
FOLLOWS:
3. ADMINISTRATIVE SUPPORT AND DUTIES.
3.1 During the Term, Executive will be provided office space selected
by the Company and commensurate with the Executive's position and
duties. Such office space shall be class A space comparable to the
office space provided by Company to Executive at the time this
Amendment is agreed to by the parties. Company will provide Executive
computer systems, software, and related technical support appropriate
for Executive's position and duties. Executive's office space will be
supplied with local and long distance telephone service, cable
television, and cable internet service. Company will provide an
administrative support person acceptable to Executive and Tommy E.
Looper. Such administrative support person shall report to Executive
and Tommy E. Looper shall be entitled to compensation (including annual
compensation increases) benefits generally available to similarly
situated employees of Carolina First Bank.
3.2 Executive shall report to the Chief Executive Officer of The South
Financial Group, Inc. Executive agrees that during the Term hereof, he
will devote a substantial portion of his working time, attention, and
energies to such job duties as are assigned to Executive by the Chief
Executive Officer, appropriate for an executive with the compensation
and stature of Executive and reasonably and mutually acceptable to
Executive and Company. Such acceptance will not be unreasonably
withheld by Executive or the Company. Executive shall not, without the
prior written consent of the Company and as provided in Section 9 of
the Agreement, at any time during the Term hereof (i) accept employment
with, or render services of a business, professional or commercial
nature to, any Person other than the Company, (ii) engage in any
venture or activity which the Company may in good faith consider to be
competitive with or adverse to the business of the Company or of any
affiliates of the Company, whether alone, as a partner, or as an
officer, director, employee or shareholder or otherwise, except that
the ownership of not more than 5% of the stock or other equity interest
of any publicly traded corporation or other entity shall not be deemed
a violation of this Section, or (iii) engage in any venture or activity
which the Board may in good faith consider to interfere with
Executive's performance of his duties hereunder. Executive may continue
to serve on the boards of directors for which he is currently a member,
and any other boards of directors approved in writing by the Chief
Executive Officer of the Company. The Company shall incur no
obligations as a result of Executive's service on such other boards of
directors. Executive is not authorized to take any action on behalf of
or obligate the Company without the written consent of the Chief
Executive Officer of The South Financial Group, Inc.
3. SECTION 4, "TERM," SHALL BE AMENDED AND RESTATED IN ITS ENTIRETY AS
FOLLOWS:
4. TERM. Unless earlier terminated as provided herein, the Executive's
employment hereunder shall be for a term of eight (8) years ("Term")
commencing at the Effective Time. Except for the obligations under
Section 6.9 and 6.10, this Agreement shall terminate upon the
expiration of such Term.
4. SECTION 6.1, "ANNUAL SALARY," SHALL BE AMENDED AND RESTATED IN ITS
ENTIRETY AS FOLLOWS:
6.1 ANNUAL SALARY. During the Term hereof, the Company shall pay to
Executive an annual base salary established by the Board. The
Executive's annual base salary will not be less than the following
amounts:
CALENDAR YEAR AMOUNT
------------- ------
2000 $520,000
2001 $546,000
2002 $594,300
For calendar years after December 31, 2002, Executive's salary will be
reviewed by the Board at the beginning of each of its calendar years
and, in the sole discretion of the Board, may be increased for such
year; provided, however, that on each January 1 after December 31,
2002, during the remaining portion of the Term hereof, Executive's
annual base salary shall be increased by five percent (5%) and provided
further that Executive's annual base salary can only be increased and
cannot be reduced. Following a Change in Control, Executive's annual
base salary shall be increased annually by a percentage at least equal
to the average annual increase over the past three years, but in no
event shall the increase be less than five percent (5%) and during the
Term hereof cannot be reduced.
5. SECTION 6.7, "AUTOMOBILE," SHALL BE AMENDED AND RESTATED IN ITS
ENTIRETY AS FOLLOWS:
6.7 AUTOMOBILE. During the Term, the Company also agrees to provide
Executive with a Company-paid automobile, consistent with the model of
automobile provided to other senior managers and allow Executive to
trade automobiles every three (3) years. Company will pay for all
gasoline, maintenance and repairs, insurance, washing and all upkeep of
such Company automobile. Company will pay Executive a tax "gross-up"
amount approximately equal to the federal and state income tax payable
by Executive on imputed taxable income for personal use of such Company
automobile.
6. SECTION 6.9, "SUPPLEMENTAL RETIREMENT PAYMENT," SHALL BE AMENDED AND
RESTATED IN ITS ENTIRETY AS FOLLOWS:
6.9 SUPPLEMENTAL RETIREMENT PAYMENT. In the event of a Change in
Control, a termination by Executive pursuant to Section 5.2(iii), or
the Executive completes four (4) years of active employment under this
Agreement, the Company will make an annual supplemental retirement
payment of Two Hundred Eighty Thousand Dollars ($280,000.00) beginning
on Executive's sixty-fifth (65th) birthday or Executive's death,
whichever first occurs, and continuing for fifteen (15) years to
Executive; provided, however, in the event of Executive's death prior
to the end of such fifteen (15) year period, the supplemental
retirement payment will be paid or continue to be paid to Executive's
estate or designated beneficiary, if any, for the remainder of such
fifteen (15) year period.
7. SECTION 8, "CONFIDENTIALITY," SHALL BE AMENDED AND RESTATED IN ITS
ENTIRETY AS FOLLOWS:
8. CONFIDENTIALITY. Executive shall hold in a fiduciary capacity for
the benefit of the Company all Confidential Information relating to the
Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated
companies. After termination of Executive's employment with the
Company, the Executive shall not, without the prior written consent of
the Company or as may be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than
the Company and those designated by it. Upon the termination or
expiration of his employment hereunder, Executive agrees to deliver
promptly to the Company all tangible Confidential Information supplied
to, obtained by, or created by Executive in connection with his
employment with the Company or his service on the Company's Board of
Directors or any committee of the Board of Directors hereunder
(including all originals and copies of the foregoing) in his possession
or control and all of the Company's equipment and other materials in
his possession or control. Payments due Executive under the Agreement
or this Amendment shall be discontinued in the event Executive breaches
the provisions of this Section 8; provided that Executive has received
written notice from Company of such breach and such breach remains
uncured thirty (30) days after the delivery of such notice. If there is
a disagreement between the parties as to whether Executive has breached
this Section 8, then after the above thirty-day period, if such breach
remains uncured in Company's opinion, Company may suspend payments to
Executive and instead, make such payments to an escrow account to be
established for this purpose. The parties agree in such event that the
dispute shall be resolved according to Section 14, or, in the event of
a Change in Control, Section 15.
8. SECTION 9, "NONSOLICITATION AND NONCOMPETITION AGREEMENT," SHALL BE
AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:
9. NONCOMPETITION AND NONSOLICITATION AGREEMENT. During the Term of this
Agreement and for a period of five (5) years from the date of
Executive's termination of employment with the Company, pursuant to
Section 5.1 or by Executive pursuant to Section 5.2 ("Noncompete
Period"), Executive shall not enter into an employment relationship or
a consulting arrangement with any other federally insured depository
institution headquartered or having a physical presence in the counties
of North Carolina, South Carolina or Florida in which Company has
business locations (hereinafter a "competitor"). The obligations
contained in this Section 9 shall not prohibit Executive from being an
owner of not more than 5% of the outstanding stock of any class of
a corporation which is publicly traded, so long as Executive has no
active participation in the business of such corporation.
Notwithstanding the above, Executive shall be allowed to participate
in and provide the following services to Persons not engaged in banking
or financial services:
(a) Business brokerage (acting as an intermediary in buying and
selling businesses);
(b) Third party negotiation (negotiating as a representative of a
company or persons);
(c) Private Placements (arranging equity or debt for companies);
(d) Initial IPO advice (advice to companies on initial public
offerings of their securities);
(e) Company valuations (determining value of companies);
(f) Fairness opinions (determining fairness of financial
transactions);
(g) Financial counseling (advice on all financial matters in a
business concern); and
(h) General business advice.
In addition, Executive may offer the above services to banking or
financial services businesses upon the written consent of the Board of
Directors of The South Financial Group, Inc. Also, the above
limitations shall not apply to any directorships held by Executive as
of the date of this Amendment.
9.1 During the Noncompete Period, Executive shall not directly or
indirectly through another entity, including but not limited to a
competitor, (i) induce or attempt to induce any employee of Company to
leave the employ of Company, or in any way interfere with the
relationship between Company and any employee thereof, (ii) hire or
offer to hire any person who was an employee of Company or any
subsidiary within ninety (90) days of the date the former employee was
terminated by the Company, or (iii) induce or attempt to induce any
customer, supplier, or other entity in a business relation with
Company to cease doing business with Company, or in any way interfere
with the relationship between any such customer, supplier, or business
relation of Company or do business with a competitor.
9.2 If, at the time of enforcement of this Section 9, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that
the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted
by law. Executive agrees that the restrictions contained in this
Section 9 are reasonable.
9.3 In the event of the breach or a threatened breach by Executive of
any of the provisions of this Section 9, Company, in addition and
supplementary to other rights and remedies existing in its favor, may
apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to
enforce or prevent any violations of the provisions hereof (without
posting a bond or other security). In addition, in the event of an
alleged breach or violation by Executive of this Section 9, the
Noncompete Period shall be tolled until such breach or violation has
been duly cured.
9. Company shall not, during or following the Term of this Agreement, make
any statement or take any action reasonable construed to disparage,
libel, or slander Executive.
10. Executive hereby affirms that as of the date of this Amendment, he has
no claims of any kind or nature, including but not limited to, claims
under the Agreement, which can or could be asserted against the Company
and its affiliates or any of their shareholders, directors, officers,
employees, agents or assigns.
IN WITNESS WHEREOF, this First Amendment is signed by the parties effective as
of the date state above.
EMPLOYEE:
/s/ Stephen L. Chryst
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STEPHEN L. CHRYST
THE SOUTH FINANCIAL GROUP, INC.
/s/ Mack I. Whittle, Jr.
---------------------------
MACK I. WHITTLE, JR.
CHIEF EXECUTIVE OFFICER
CAROLINA FIRST BANK
/s/ Mack I. Whittle, Jr.
---------------------------
MACK I. WHITTLE, JR.
CHIEF EXECUTIVE OFFICER