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Exhibit 10.1

 

THIS EMPLOYMENT AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT, SECTION 15-48-10 ET SEQ., AS AMENDED.

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “ Agreement ”) is made as of the 28th day of May, 2008 (the “ Effective Date ”) by and between Coastal Carolina Bancshares, Inc., a South Carolina corporation (the “ Company ”), and Michael D. Owens (“ Executive ”). Upon the formation of the Company’s proposed national bank association subsidiary (the “Bank”), the Bank shall become party hereto pursuant to the provisions set forth herein.  The Company and the Bank are collectively referred to herein as “Employer.”

 

W I T N E S S E T H

 

WHEREAS, the Company as successor by merger to Coastal Carolina Dream Team, LLC, and the Executive are parties to a Consulting and Employment Agreement dated November 1, 2007 (the “Current Agreement”); and

 

WHEREAS, the Company and the Executive desire to terminate the Current Agreement and replace it with this Agreement which shall amend and restate in its entirety the Current Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and intending to be legally bound hereby, the parties agree as follows:

 

1.              Position and Duties.   Employer agrees to employ Executive, and Executive agrees to serve, as President and Chief Executive Officer (“CEO”) of the Company and, upon its formation, of the Bank.

 

Executive acknowledges that the business of the Bank shall be the operation of a depository financial institution, including, without limitation, the solicitation and acceptance of deposits of money and commercial paper, the solicitation and funding of loans, and the provision of other banking services, and any other related business engaged in by the Bank or any business entity controlled by, controlling or under common control with the Bank.

 

Executive acknowledges that the business of the Company shall be to own the Bank and to provide resources therefor, and to own such other subsidiaries as the Company properly forms or acquires from time to time, if any.

 

Executive will have such executive or managerial duties for the Company and the Bank as are specified in the then-current by-laws, or by the Board of Directors, of the respective organization. Further, Executive agrees to serve, without additional compensation, if elected, in any other senior executive position of the Company or the

 



 

Bank that may be reasonably required of him, including as a Director of the Company and the Bank, and as an Officer or Director or both of any subsidiary or affiliate of the Company or the Bank in accordance with Section 7 below.

 

Executive, shall at all times, comply with all laws, rules and regulations which maybe applicable to the Bank and/or the Company.

 

Executive shall devote his full-time and best efforts to his employment with the Employer and shall apply substantially that degree of skill and diligence in rendering services to the Company, its subsidiaries and the Bank as would be applied by a person of ordinary prudence and comparable experience under similar circumstances. In connection therewith, Executive shall report to and be subject to the direction of the Company’s, and after its formation the Bank’s, Board of Directors.  Notwithstanding the foregoing, Executive may devote a reasonable amount of his time to his personal investments and business affairs (including service as a director of unaffiliated companies) and to civic and charitable activities; provided, however, Executive shall not accept any position as a director of any unaffiliated for-profit business organization without the prior approval of the Company’s Board of Directors, which approval shall not be unreasonably withheld.

 

2.              Compensation.

 

(a)  Annual Salary .  Executive shall be entitled to receive an annual base salary of $130,000 per year until the date on which the organizers receive preliminary approval from the OCC for a charter for the Bank at which time Executive’s salary shall be increased to $180,000 a year (the “ Annual Salary ”).  Executive’s Annual Salary shall be payable in accordance with the Employer’s instituted payroll practice, prorated for any partial employment period. Such amount shall be allocated between the Company and the Bank based on the mutual consent of the Board of Directors of the Company (the “Company Board”) and the Board of Directors of the Bank (the “Bank Board”). The Annual Salary may be increased from time to time by either or both Boards, in their sole discretion, but shall not be decreased without the written consent of Executive. The Company Board, in exercising its discretion, shall consider Executive’s annual performance in light of the specific goals and objectives for Executive which the Company and Bank Boards shall establish annually in writing, after consultation with Executive.

 

(b)  Performance Bonus . Commencing with the 2008 calendar year and provided the Bank has received all necessary regulatory approvals to commence operations as a banking institution, Executive shall be eligible to receive such annual (January 1 – December 31 and prorated for any partial calendar year) performance bonuses as the Company and Bank Boards determine is warranted by Executive’s performance in light of Employer’s performance goals and objectives under a to-be-established bonus plan (the “Bonus Plan”) which may include, for illustrative purposes only, measures of such items as internal controls, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings, examination and audit results and employee and customer retention.  Such goals and objectives (the “ Performance Goals ”) are to be established by Executive and the Company and Bank Boards annually prior to the first day of the applicable annual period. If such Performance Goals for the year are met at the threshold level, Executive will be entitled to a bonus equal to 20% of his Annual Salary; if the Performance Goals for the year are met at the target level, Executive will be

 

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entitled to a bonus equal to 30% of his Annual Salary; and if the Performance Goals are met at the maximum level, Executive will be entitled to a bonus equal to 50% of his Annual Salary. Performance Goals and the threshold, target and maximum levels will be established each year, in accordance with the provisions of the Bonus Plan. All performance bonuses shall be payable in accordance with the terms of the Bonus Plan. The payment of any bonus to Executive pursuant to a Bonus Plan will be contingent upon the following:

 

(i)  prior to the award of any bonus to Executive, the Bank Board shall consider, and document its findings in the minutes of the meeting wherein the issue was considered, Executive’s performance in light of the Performance Goals as established by Executive and the Company and Bank Boards as set forth above;

 

(ii)  the most recent Uniform Financial Institution Rating of the Bank, known as the CAMEL Rating, shall be not less favorable than a “2” except in the event a less favorable rating was outside of the Executive’s control and supervision; and

 

(iii) the Bank (if it has been capitalized) shall be “well capitalized” as defined under regulations promulgated by the FDIC pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991.

 

(c)  Stock Options; Warrants .

 

(i)  The Company shall grant to Executive on the date the Bank opens for business stock options (“Options”) in an amount equal to 3.3% of the number of shares of the Company’s common stock sold in the Company’s initial stock offering. The Options shall vest in five (5) equal annual installments commencing on the first anniversary of the date of grant.

 

(ii)  If Executive purchases shares of the Company’s common stock in the Company’s initial stock offering, and if the Company grants to its founders and organizers warrants to purchase additional shares of the Company’s common stock, the Company shall also grant to Executive warrants to acquire additional shares of the Company’s stock on the same basis as other similarly situated organizers.

 

(d)  Equity Based Compensation.   In each year of employment, Executive shall be eligible to receive appropriate awards of stock options, restricted stock and/or other equity based compensation under such terms and conditions as determined by the Company Board, in its sole discretion.

 

3.              Fringe Benefits, Vacation Time, Expenses and Perquisites.

 

(a)  Benefit Plan Participation . Employer anticipates it will establish and implement benefit plans and programs that are warranted by the Employer’s performance, and that will contain such terms and conditions as are selected by the Bank Board, in its discretion. Subject thereto, Executive shall be eligible to participate in or receive benefits under all corporate employment benefit plans made available by Employer to its executives and key management employees including, but not limited to, any salary continuation, life insurance, supplemental executive retirement, profit sharing,

 

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savings, disability insurance, medical or health-and-accident plan or arrangement, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

 

(b)  Vacation Time Allowances . Executive shall be entitled each calendar year to twenty (20) business days of vacation, prorated for any partial year, during which time Executive’s compensation will continue to be paid.  Each year, Executive shall take ten (10) of the twenty (20) vacation days consecutively. Unused vacation days shall not accumulate from year to year.

 

(c)  Business Expense Reimbursement . Commencing on the Employment Date, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him (in accordance with the policies and procedures established by Employer) in performing services hereunder, provided that Executive properly accounts therefor in accordance with corporate policy.

 

(d)  Automobile Allowance . Employer shall provide to Executive a vehicle for Executive’s use during his employment and will pay, or reimburse the Executive, for all taxes, gasoline, insurance and maintenance related to said vehicle.  Executive shall use said vehicle for Employer business purposes and activities.

 

(e)  Club Dues . Employer will pay all fees and dues for Executive’s use of an Employer owned membership in the Dunes Club.

 

(f)  Cell Phone . Employer will provide Executive with a cell phone and pay the monthly fees in connection therewith.

 

(g)  Moving Expenses . Employer will reimburse Executive for all reasonable insured moving expenses, based on the lower of two quotes from national moving companies, related to Executive’s move of his family to the Myrtle Beach area and any reasonably necessary expenses of storage of home furnishings for a period not to exceed six months. Additionally, Employer shall pay the real estate commission and the closing costs for the sale of Executive’s existing home in Georgia.

 

(h)  Health Insurance. Executive, upon being eligible, may participate in the Bank health care plan and other related benefits. Until a health insurance group policy is available to Bank employees, the Employer shall reimburse Executive for his monthly COBRA payments that he submits to an insurance company for continuing health insurance coverage.

 

4.              Confidential Information and Restrictive Covenants. Executive acknowledges that he has performed services or will perform services hereun













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