Cto Employment Agreement

EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into this
day of , 1997 by and between CCB Financial Corporation, a North Carolina corporation (hereinafter, "CCB"), and William L. Abercrombie, Jr. (hereinafter, "Executive").


BACKGROUND


Executive is the Chief Executive Officer of American Federal Bank, FSB, a federal stock savings bank ("American Federal"), which was acquired by CCB on the date hereof pursuant to an Agreement and Plan of Reorganization, dated as of February 17, 1997 (the "Merger Agreement") (the "Merger").


CCB desires to employ Executive in accordance with the terms of this Agreement. Executive is willing to serve as an employee of CCB in accordance with the terms and conditions of this Agreement.


NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. EFFECTIVE DATE. The effective date of this Agreement (the "Effective Date") is the date on which the effective time of the Merger occurred.


2. EMPLOYMENT.


(a) OFFICER POSITIONS. Executive will be employed as a Vice Chairman
of the Board of Directors of CCB and as the President and Chief Executive
Officer of CCB's principal banking subsidiary located in South Carolina
(the "Bank"). Executive's responsibilities under this Agreement shall be in
accordance with the policies and objectives established by the Board of
Directors of CCB, and shall be consistent with the responsibilities of
similarly situated executives of comparable banks and bank holding
companies. In any such capacity, Executive will report directly to the
Chief Executive Officer of CCB.


(b) DIRECTOR POSITION. Subject to all legal limitations and conditions
applicable to service as a director of CCB, (i) the Board of Directors of
CCB shall nominate and use its best efforts to secure the election of
Executive as a director of CCB during the term of this Agreement, and (ii)
if so elected, Executive shall serve as member of Executive Committee of
the Board of Directors of CCB.


3. EMPLOYMENT PERIOD. Unless earlier terminated in accordance with Section 6 hereof, Executive's employment shall be for a five-year term (the "Employment Period"), beginning on the Effective Date. The Employment Period shall, without further action by Executive or CCB, be extended for an additional one-year period on each anniversary of the Effective Date; provided, however, that either party may, by notice to the other, cause the Employment Period to cease to extend automatically. Upon such notice, the Employment Period shall terminate upon the expiration of the then-current term, including any prior extensions.


4. EXTENT OF SERVICE. During the Employment Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive agrees to devote his business time, attention, skill and efforts to the faithful performance of his duties hereunder; provided, however, that with the approval of the Board of Directors of CCB, Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, such companies or organizations, which, in such Board's judgment, will not present any material conflict of interest with CCB or any of its subsidiaries or affiliates or divisions, or unfavorably affect the performance of Executive's duties pursuant to this Agreement, or will not violate any applicable statute or regulation. During the Employment Period it shall not be a violation of this Agreement for Executive to (i) devote reasonable periods of time to charitable and community activities, and/or (ii) manage personal business interests and investments, so long as such activities do not interfere with the performance of Executive's responsibilities under this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by Executive prior to the date of this Agreement (as to which activities Executive shall have given written notice to CCB on or before June 1, 1997), the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of Executive's responsibilities hereunder.
5. COMPENSATION AND BENEFITS.


(a) BASE SALARY. During the Employment Period, CCB will pay to
Executive a base salary in the amount of $300,000 per year ("Base Salary"),
less normal withholdings, payable in equal monthly or more frequent
installments as are customary under CCB's payroll practices from time to
time. The Compensation Committee of the Board of Directors of CCB shall
review Executive's Base Salary annually and in its sole discretion, subject
to approval of the Board of Directors of CCB, may adjust Executive's Base
Salary from year to year, but during the Employment Period the Board may
not decrease Executive's Base Salary below $300,000, and periodic
increases, once granted, shall not be subject to revocation. The annual
review of Executive's salary by the Board will consider, among other
things, Executive's own performance and CCB's performance.


(b) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Employment
Period, Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to senior executive officers of CCB and its affiliated companies,
and on the same basis as such other senior executive officers, with full
credit given for Executive's total accumulated years of service at American
Federal for purposes of determining vesting and eligibility. Without
limiting the foregoing, the following shall apply:


(i) Executive's incentive bonus under CCB's regular incentive plan
for 1997 shall be on the basis of a full year of service (I.E., not
prorated as of the Effective Date).


(ii) In addition to any bonus earned by Executive pursuant to CCB's
regular incentive plans, CCB shall pay to Executive a monthly bonus for
each of the 24 months immediately following the Effective Date in the
amount of $24,300 (the "Signing Bonus"). If Executive's employment is
terminated for Cause under Section 6(b) (ii) or (iii) of this Agreement,
then CCB's obligation to pay the Signing Bonus shall cease as of the
date of termination; otherwise such obligation shall continue for the
full 24 month period, regardless of Executive's employment status.


(iii) Each year during the term of this Agreement CCB will make
stock options grants to Executive at the same level as made to Executive
Vice Presidents of CCB, which grant in 1997 shall be the same percentage
of the base salary of the other Executive Vice Presidents of CCB for
1997, less the value of any options granted in 1997 to Executive by
American Federal prior to the Effective Date.


(iv) CCB shall, if so requested by Executive, assume and maintain
on behalf of Executive that certain Supplemental Retirement Benefit
Agreement, dated as of December 19, 1994, between Executive and American
Federal.


(c) WELFARE BENEFIT PLANS. During the Employment Period, Executive
and/or Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by CCB and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to senior
executive officers of CCB and its affiliated companies, with full credit
given for Executive's total accumulated years of service at American
Federal for purposes of determining vesting and eligibility (other than
under CCB's retiree medical plan). Without limiting the foregoing, (i) CCB
shall assume and maintain on behalf of Executive that certain life
insurance policy identified on Exhibit A hereto, and (ii) for one year
after Executive's death, CCB shall pay any premium required for any
"qualified beneficiary" to continue his or her health care coverage in
accordance with Title I, Part 6 of the Employee Retirement Security Act of
1974.


(d) EXPENSES. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred by Executive in accordance with the policies, practices and
procedures of CCB and its affiliated companies to the extent applicable
generally to other senior executive officers of CCB and its affiliated
companies.


(e) FRINGE BENEFITS. During the Employment Period, Executive shall be
entitled to fringe benefits in accordance with the plans, practices,
programs and policies of CCB and its affiliated companies in effect for
senior executive officers of CCB and its affiliated companies.


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6. TERMINATION OF EMPLOYMENT.


(a) DEATH OR DISABILITY. Executive's employment shall terminate
automatically upon Executive's death during the Employment Period. If CCB
determines in good faith that the Disability of Executive has occurred
during the Employment Period (pursuant to the definition of Disability set
forth below), it may give to Executive written notice in accordance with
Section 13(g) of this Agreement of its intention to terminate Executive's
employment. In such event, Executive's employment with CCB shall terminate
effective on the 60th day after receipt of such written notice by Executive
(the "Disability Effective Date"), provided that, within the 60 days after
such receipt, Executive shall not have returned to full-time performance of
Executive's duties for a period of at least 30 days. For purposes of this
Agreement, "Disability" shall mean the absence of Executive from
Executive's duties with CCB on a full-time basis for 180 consecutive days
as a result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by CCB or its
insurers and acceptable to Executive or Executive's legal representative,
which acceptance shall not be unreasonably withheld.


(b) CAUSE. CCB may terminate Executive's employment during the
Employ-ment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:


(i) the willful and continued failure of Executive to perform
Executive's duties with CCB or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental
illness), after a written demand for performance is delivered to
Executive by the Board or the Chief Executive Officer of CCB which
specifically identifies the manner in which the Board or Chief Executive
Officer believes that Executive has not performed Executive's duties;


(ii) Executive's personal dishonesty, willful misconduct, or breach
of a fiduciary duty from which he derives a personal profit;


(iii) Executive's willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease and
desist order; or


(iv) Executive's willful breach of any material term or condition
of this Agreement.


For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" or a breach of fiduciary duty
unless it is done, or omitted to be done, by Executive in bad faith or
without reasonable belief that Executive's action or omission was in the
best interests of CCB. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer of CCB or based upon the advice
of counsel for CCB after consultation with the Chief Executive Officer
about such advice shall be conclusively presumed to be done, or omitted to
be done, by Executive in good faith and in the best interests of CCB. The
cessation of employment of Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is provided
to Executive and Executive is given an opportunity, together with counsel,
to be heard before the Board), finding that, in the good faith opinion of
the Board, Executive is guilty of the conduct described in subparagraph
(i), (ii), (iii) or (iv) above, and specifying the particulars thereof in
detail. For purposes of this Section 6(b), any such finding by
three-quarters of the Board shall be conclusive.


(c) GOOD REASON. Executive's employment may be terminated by Executive
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:


(i) the assignment to Executive of any duties materially
inconsistent with Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) of this Agreement, or
any other action by CCB which results in a material diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by CCB promp ...