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This Employment Agreement (this “ Agreement ”) is entered into as of April 15, 2014, by and between Carolina Bank, a North Carolina-chartered bank (the “ Bank ”), and John Richard Spiker II (the “ Employee ”).
Statement of Purpose
WHEREAS the Bank desires to employ Employee as its Executive Vice President and Senior Loan Officer and Employee desires to accept such employment, on the terms and conditions set forth in this Agreement;
WHEREAS Employee acknowledges and agrees that through his association with the Bank as an employee, he will acquire a considerable amount of knowledge and goodwill with respect to the business of the Bank, which knowledge and goodwill are highly valuable to the Bank and which would be detrimental to the Bank if used by Employee to compete with the Bank;
WHEREAS the Bank wishes to protect its investment in its business, employees, customer relationships, and confidential information, by requiring Employee to abide by certain restrictive covenants regarding confidentiality and other matters, each of which is an inducement to the Bank to employ Employee; and
WHEREAS the Bank and Employee desire to enter into this Agreement also to provide Employee with security in the event of a change in control in the Bank or its parent holding company, Carolina Bank Holdings, Inc. (“ Holdings ”), and to insure the continued loyalty of Employee during any such change in control in order to maximize shareholder value as well as the continued safe and sound operation of the Bank,
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Employment; Position and Duties. The Bank hereby agrees to employ Employee, and Employee hereby agrees to accept such employment, upon the terms and conditions stated herein. As an officer of the Bank, Employee will (i) serve as Executive Vice President and Senior Loan Officer of the Bank, and (ii) have such other duties and responsibilities as are customary for persons in Employee’s position with the Bank or as shall otherwise be reasonably assigned to him from time to time by the Bank. Employee will faithfully and diligently discharge his duties and responsibilities under this Agreement in compliance with the Bank’s policies and procedures and applicable laws and regulations that apply to the Bank’s business. Employee agrees to devote his full business time to discharge his duties hereunder, and, for so long as employment hereunder continues, Employee shall not engage in any other occupation which requires a significant amount of Employee’s personal attention during the Bank’s regular business hours or which otherwise interferes with Employee’s attention to or performance of his duties and responsibilities as an officer of the Bank hereunder, except with the prior written consent of the Bank. However, nothing herein contained shall restrict or prevent Employee from personally, and for Employee’s own account, trading in stocks, bonds, securities, real estate or other forms of investment for Employee’s own benefit so long as said activities do not interfere with Employee’s attention to or performance of his duties and responsibilities as an officer of the Bank hereunder.
2. Compensation and Benefits. As compensation for the services to be rendered by Employee under this Agreement, the Bank will provide the following compensation and benefits during Employee’s employment hereunder.
(a) Base Salary. The Bank will pay to Employee a base salary (the “ Base Salary ”) at an annual rate of ___________________ Dollars ($172,500) payable in equal installments in accordance with the Bank’s customary payroll practices as in effect from time to time. The Base Salary will be reviewed by the Board of Directors of the Bank (the “ Board ”) or a designated committee thereof no less than annually, and may be increased from time to time in the sole discretion of the Board.
(b) Annual Bonus. Employee will be eligible to receive an annual discretionary bonus based upon such criteria, and in such amount, as the Board (or a designated committee thereof) may determine in its sole discretion. The Annual Bonus for any given year will be payable between January 1 and March 15 in the year immediately following the year in which the Annual Bonus, if any, is earned. Employee must be employed by the Bank on December 31 of the bonus year in order to receive the Annual Bonus for that year.
(c) General Benefits. Subject to the terms and conditions of this Agreement, Employee shall be entitled to participate in any and all employee benefit programs and compensation plans from time to time maintained by the Bank and available to similarly-situated employees of the Bank, all in accordance with the terms and conditions (including eligibility requirements) of such programs and plans and the Bank’s normal practices and established policies regarding such programs and plans. Nothing in this Agreement will be deemed to alter the Bank’s rights to modify or terminate any such plans or programs in its sole discretion.
(d) Vacation. Employee will be entitled to accrue paid vacation leave in accordance with the Bank’s vacation policy.
(e) Club Dues. The Bank will pay or cause to be paid Employee’s membership dues for membership in one (1) civic or country club of Employee’s choice, provided that Employee will be responsible for all personal expenses for use of such club.
(f) Reimbursement of Expenses. The Bank shall reimburse Employee for all reasonable expenses incurred by him in the performance of his duties under this Agreement and documented to the reasonable satisfaction of the Bank pursuant to established policies.
(g) Withholdings. The Bank will withhold from any amounts payable under this Agreement such federal, state and local taxes as the Bank determines are required to be withheld pursuant to applicable law.
3. Term. The initial term of this Agreement and Employee’s employment with the Bank hereunder shall be for a period commencing on the date hereof and continuing for a period of three (3) years. Following the initial three-year period, this Agreement will be renewed for successive one (1) year periods, unless either party provides at least thirty (30) days’ written notice of non-renewal to the other party. Notwithstanding the above, either party may terminate this Agreement and Employee’s employment by the Bank in accordance with Section 4 below.
4. Termination. In addition to a non-renewal of the employment term as described in Section 3 above, this Agreement is subject to termination as follows:
(a) Death. Automatically effective upon the Employee’s death.
(b) Disability. By the Bank effective upon written notice to the Employee in the event of the Employee’s Disability. As used herein, “ Disability ” means the inability of Employee, due to the condition of his physical, mental or emotional health, effectively to perform the essential functions of his job with or without reasonable accommodation for a continuous period of more than 90 days or for 90 days in any period of 180 consecutive days, as determined by the Board in its sole discretion in consultation with a physician retained by the Bank. For purposes of making a determination as to whether a Disability exists, at the Bank’s request Employee agrees to make herself available and to cooperate in a reasonable examination by a reputable independent physician retained by the Bank and to authorize the disclosure and release to the Bank of all medical records related to such examination. In all cases, this provision will be interpreted and applied in an manner consistent with the Americans with Disabilities Act, as amended, and other applicable law.
(c) By the Bank For Cause. By the Bank effective upon written notice to the Employee for Cause. For purposes of this Agreement, “ Cause ” means:
(i) The commission in the course of Employee’s employment with the Bank of an act of fraud, embezzlement, theft or proven personal dishonesty (whether or not resulting in criminal prosecution or conviction);
(ii) Employee’s material breach of fiduciary duties to the Bank;
(iii) Employee’s willful or grossly negligent misconduct that has or may reasonably be expected to have a material adverse effect on the Bank’s business or reputation;
(iv) Employee’s material breach of this Agreement;
(v) Employee’s willful failure or refusal to perform his material duties under this Agreement or failure to follow any specific lawful instructions of the Board or its designee(s);
(vi) Employee’s violation of any applicable federal or state law, or any applicable rule, regulation, order or statement of policy promulgated by any governmental agency or authority having jurisdiction over the Bank or any of its affiliates or subsidiaries (including without limitation the Federal Deposit Insurance Corporation, the North Carolina Commissioner of Banks, the Federal Reserve Board or any other banking regulator having legal jurisdiction over the Bank), which results from Employee’s gross negligence, willful misconduct or intentional disregard of such law, rule, regulation, order or policy statement and results in any substantial damage, monetary or otherwise, to the Bank or any of its affiliates or subsidiaries or to the Bank’s reputation;
(vii) Employee’s alcohol or substance abuse which has a material adverse effect on Employee’s ability to perform his duties under this Agreement or the property, business, or reputation of the Bank;
(viii) Employee’s engagement in a form of discrimination or harassment prohibited by law (including, without limitation, discrimination or harassment based on race, color, religion, sex, national origin, age or disability);
(ix) Employee’s conviction or plea of nolo contendere in respect of a felony or of a misdemeanor involving moral turpitude; or
(x) Conduct by the Employee that results in Employee (1) becoming unacceptable to any governmental or regulatory agency having jurisdiction over the Bank (or any affiliate thereof), or (2) being removed, suspended, or prohibited from participating in the conduct of the Bank’s affairs (or if proceedings for that purpose are commenced) by any such governmental or regulatory agency.