Chief Financial Officer Employment Agreement

Exhibit 10.4


AMENDED AND RESTATED
EMPLOYMENT AGREEMENT


THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the 1st day of August, 1999 by and among CCB Financial Corporation, a North Carolina corporation ("CCBF"), Central Carolina Bank and Trust Company, a North Carolina commercial bank ("CCB Bank"), and Sheldon M. Fox ("Executive").


BACKGROUND
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WHEREAS, Executive was employed initially as a Senior Vice President and the Chief Financial Officer of CCBF and of CCB Bank, the primary banking subsidiary of CCBF as of October 26 1998; and


WHEREAS, the expertise and experience of Executive and his relationships and reputation in the financial institutions industry are extremely valuable to CCBF, CCB Bank and the direct and indirect subsidiaries of CCBF ("Subsidiaries"); and


WHEREAS, it is in the best interests of CCBF, its Subsidiaries and its shareholders to maintain an experienced and sound executive management team to manage CCBF, CCB Bank and the other Subsidiaries and to further CCBF's overall strategies to protect and enhance the value of its shareholders' investments; and


WHEREAS, CCBF, CCB Bank and Executive desire to amend and restate Executive's Employment Agreement, dated as of October 26, 1998, to establish the scope, terms and conditions of Executive's employment by CCBF and CCB Bank.


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 time and date of this Agreement shall be deemed to be 12:00:01 o'clock, a.m., on October 26, 1998 (the "Effective Date").


2. Definitions. The following defined terms are defined in the referenced Sections of this Agreement.


Term Section
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Accrued Obligations Section 8(a)(i)(A)
Additional Payment Section 10(a)
Base Salary Section 6(a)
Bank Board Section 3(b)
Benefit Plans Section 6(c)
Cause Section 7(b)
CCBF Board Section 3(b)


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Change of Control Section 9(b)
Change of Control Termination Section 9(a)
Change of Control Termination Date Section 9(a)
Code Section 8(c)
Competitor Section 13(a)
Continuing Period Section 9(c)(iv)
Commissioner Section 15(d)
Date of Termination Section 7(e)
Disability Section 7(a)
Disability Effective Date Section 7(a)
Effective Date Section 1
EMIP Section 6(b)(i)
Employment Period Section 4
Excise Tax Section 10(a)
FDIC Section 15(d)
Good Reason Section 7(c)
Group Section 9(b)
Incumbent Directors Section 9(b)
IRS Section 10(a)
ISOs Section 8(c)
LTIP Section 6(b)(ii)
1934 Act Section 9(b)
Notice of Termination Section 7(d)
Other Benefits Section 8(a)(iv)
Options Section 8(a)(vi)
Payment Section 10(a)
Person Section 9(b)
Remaining Employment Period Section 8(a)(i)(B)
Restricted Period Section 8(a)(vi)
Subsidiaries Preamble
Target EMIP Bonus Section 8(a)(i)(A)
Target LTIP Award Section 8(a)(ii)
Welfare Benefit Plans Section 6(d)


3. Employment. Executive will be employed as an Executive Vice President and the Chief Financial Officer of each of CCBF and CCB Bank. Executive's responsibilities, duties, prerogatives and authority in such executive offices, and the clerical, administrative and other support staff and office facilities provided to him, shall be those customary for the chief financial officer of publicly held corporations generally and of holding companies and financial institutions that are a part of the financial institutions industry specifically. In his executive capacities Executive shall report to the President and Chief Executive Officer of CCBF and CCB Bank, as applicable.


4. Employment Period. Unless earlier terminated, Executive's employment shall be for two (2) years commencing on the Effective Date, and unless terminated as provided herein as of the end of such two (2) year term, shall continue for a renewing three (3) year term commencing on the second anniversary of the Effective Date (the "Employment Period"). After the commencement of the renewing three (3) year term, the Employment Period shall, without further action by Executive, CCBF or CCB Bank, be extended for an additional one (1) year on each anniversary of the Effective Date, such that the remaining term of the Employment Period shall continue to be three (3) years; provided, further, however,


2 that CCBF and CCB Bank or Executive may, by notice to the other, cause the Employment Period to cease to extend automatically as of a specific anniversary of the Effective Date. Such notice must be given and received at least eleven (11) months and thirty-one (31) days prior to the anniversary of the Effective Date on which it is to be effective. Upon the effectiveness of such notice, the Employment Period shall be fixed at three (3) years, and the Employment Period shall terminate upon the expiration of such three-year period.


5. Extent of Service. During the Employment Period, and excluding any periods of vacation, sick or other leave to which Executive is entitled under this Agreement, Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of CCBF and CCB Bank, and, to the extent necessary to discharge the responsibilities assigned to Executive hereunder, to use Executive's reasonable best efforts to perform faithfully and efficiently his responsibilities and duties under this Agreement. During the Employment Period, it shall not be a violation of this Agreement for Executive to (i) devote reasonable periods of time to charitable, trade association, community and similar 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 and duties 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 Effective Date, 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 and duties hereunder.


6. Compensation and Benefits.


(a) Base Salary. For the 1998 and 1999 fiscal years of CCBF, CCBF will pay to Executive a base salary of $232,000 per year ("Base Salary"), less normal withholdings, payable in equal monthly or more frequent installments as are customary under CCB Bank's payroll practices from time to time. Commencing with the fiscal year beginning January 1, 2000 and thereafter during the Employment Period, the Compensation Committee of the CCBF Board shall review Executive's total compensation annually and in its sole discretion may adjust Executive's Base Salary from year to year, but during the Employment Period neither the Compensation Committee, the CCBF Board nor the Bank Board may decrease Executive's Base Salary below $232,000, and periodic increases, once granted, shall not be subject to revocation. The annual review of Executive's total compensation by the Compensation Committee will consider, among other things, changes in the cost of living, Executive's own performance and CCBF's consolidated performance.


(b) Incentive Plans. Commencing with the fiscal year beginning January 1, 1999 and thereafter during the Employment Period, Executive shall be entitled:


(i) to participate in CCBF's Executive Management
Incentive Plan ("EMIP"), and any successor or
substitute plan to the EMIP, in at least as favorable
a manner as any other senior executive employee
participant. CCBF's President and Chief Executive
Officer shall recommend annually to the Compensation
Committee appropriate minimum, target and maximum
performance objectives, and appropriate measures and
weights for the components of the performance
objectives, and minimum, target and maximum bonus
levels for Executive. Executive's annual minimum,
target and maximum bonus levels under the EMIP
initially shall be 0%, 50%, and 100% of Executive's
Base Salary for such year or such greater levels as
the Compensation Committee may determine Executive's


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individual performance warrants or as are necessary
to satisfy the provisions of the first sentence of
this item (i); and


(ii) to participate in CCBF's Long-Term Incentive Plan
("LTIP"), and any successor or substitute plan to the
LTIP, in at least as favorable a manner as any other
senior executive employee participant. Executive's
annual target award level under the LTIP initially
shall be 65% of Executive's Base Salary for such year
or such greater level as the Compensation Committee
may determine Executive's individual performance
warrants or as is necessary to satisfy the provisions
of the first sentence of this item (ii).


(c) Savings and Retirement Plans. During the Employment Period, Executive shall be entitled to participate in all savings, pension and retirement plans (including supplemental retirement plans), practices, policies and programs (but not including, until such time as the Compensation Committee of the CCBF Board shall determine otherwise, split-dollar life insurance programs) applicable generally to senior executive employees of CCBF or CCB Bank (the "Benefit Plans"), and on at least as favorable a basis as any other senior executive employee participant. Without limiting the foregoing, Benefit Plans shall include the CCB Financial Corporation Retirement Plan, the CCB Financial Corporation Retirement Savings Plan, the CCB Financial Corporation Retirement Income Equity Plan, the CCB Financial Corporation Retirement Savings Equity Plan and any substitute and successor plan to any of the foregoing.


(d) 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 all welfare benefit plans, practices, policies and programs provided by CCBF or CCB Bank (including, without limitation, medical, hospitalization, prescription, dental, disability, employee life, group life, accidental death and dismemberment, and travel accident, but not including, until such time as the Compensation Committee of the CCBF Board shall determine otherwise, split-dollar life insurance programs) to the extent applicable generally to senior executive employees of CCBF or CCB Bank ("Welfare Benefit Plans").


(e) 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 CCBF and CCB Bank to the extent applicable generally to other senior executive employees of CCBF or CCB Bank.


(f) Fringe and Similar Benefits. During the Employment Period, Executive shall be entitled to fringe benefits in accordance with the plans, practices, programs and policies of CCBF and CCB Bank in effect for senior executive employees of CCBF or CCB Bank. In addition to, and not in lieu of, any other provision of this Agreement, Executive shall receive annually an allowance equal to three percent (3%) of his Base Salary for such fiscal year under CCB Bank's "Senior Officer Perquisites" policy, payable and available for such uses as are set forth in such policy.


(g) Vacation, Sick and Other Leave. During the Employment Period, Executive shall be entitled annually to a minimum of twenty (20) business days of paid vacation and shall be entitled to those number of business days of paid disability, sick and other leave specified in the employment policies of CCBF or CCB Bank.


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(h) Allocation. CCBF and CCB Bank may allocate between them for accounting and taxation purposes the payment of compensation to Executive under this Agreement on the basis of such factors as they deem relevant and appropriate; provided, however, that CCBF and CCB Bank shall be jointly and severally liable and obligated to fulfill all obligations to Executive under this Agreement.


7. Termination of Employment (Other Than In Connection With A Change Of Control).


(a) Death or Disability. Executive's employment with CCBF and CCB Bank shall terminate automatically upon Executive's death during the Employment Period. If the CCBF Board and the Bank Board determine in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), they may give to Executive written notice in accordance with Section 7(d) and 16(g) of this Agreement of their intention to terminate Executive's employment. In such event, Executive's employment with CCBF and CCB Bank shall terminate effective on the 60th day after receipt of such written notice by Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of Executive from Executive's duties with CCBF and CCB Bank on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness or injury which is determined to be total and permanent by a physician selected by the CCBF Board and the Bank Board, or the insurers of CCBF and CCB Bank, and acceptable to Executive or Executive's legal representative, which acceptance shall not be unreasonably withheld, subject to (i) CCBF's and CCB Bank's obligations, and Executive's rights, under (A) the Americans With Disabilities Act, 42 U.S.C. ss.ss.1210 ET SEQ., and (B) the Family and Medical Leave Act, 29 U.S.C. ss.ss.2601 ET SEQ. (and the regulations promulgated under the foregoing Acts), and (ii) the exclusion from such 180 business day calculation of any business days constituting vacation days under Section 6(g) and any business days which an employee is permitted to be absent under the disability, sick or other leave policies of CCBF or CCB Bank.


(b) Cause. During the Employment Period, CCBF and CCB Bank may terminate Executive's employment with CCBF and CCB Bank without Cause or for Cause. For purposes of this Agreement, "Cause" shall mean:


(i) the willful and continued failure of Executive to
perform substantially Executive's duties with CCBF
and CCB Bank, other than any such failure resulting
from Disability, after a written demand for
substantial performance is jointly delivered to
Executive by the CCBF Board and the Bank Board which
specifically identifies the manner in which the CCBF
Board and the Bank Board believe that Executive has
not substantially performed Executive's duties, or


(ii) the willful engaging by Executive in illegal conduct
or gross misconduct which is materially and
demonstrably injurious to CCBF and CCB Bank.


For purposes of this provision, no act or failure to act on the part of Executive shall be considered "willful" 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 CCBF and CCB Bank. Any act, or failure to act, based upon authority given pursuant to resolutions duly adopted by the CCBF Board or the Bank Board or based upon the advice of counsel for CCBF or CCB Bank shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of CCBF and CCB Bank. The cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive copies of resolutions duly adopted by the affirmative votes of not


5 less than three-quarters (3/4) of the entire membership of each of the CCBF Board and the Bank Board at meetings of such Boards 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 CCBF Board and the Bank Board), finding that, in the good faith opinion of each such Board, Executive is guilty of the conduct described in items (i) or (ii) above, and specifying the particulars thereof in detail.


(c) Good Reason. During the Employment Period, Executive's employment may be terminated by Executive for Good Reason. Such a termination shall not be deemed a resignation. For purposes of this Agreement, "Good Reason" shall mean:


(i) the assignment to Executive of any duties or
responsibilities inconsistent in any respect with
Executive's positions (including status, offices,
titles, and reporting requirements), authority,
duties, prerogatives or responsibilities as
contemplated by Section 3 of this Agreement, or any
other action by CCBF or CCB Bank which results in a
diminution in such positions, authority, duties,
prerogatives or responsibilities, excluding for these
purposes an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied
by CCBF or CCB Bank, as applicable, promptly after
receipt of notice thereof given by Executive;


(ii) any failure by CCBF or CCB Bank to comply with any of
the provisions of Section 6 of this Agreement, other
than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is
remedied by CCBF or CCB Bank, as applicable, promptly
after receipt of notice thereof given by Executive;


(iii) the requirement by CCBF and/or CCB Bank that
Executive, without his consent, be based or conduct
on an on-going basis more than ten percent (10%) of
his activities under this Agreement at any office or
location more than 35 miles (by most direct highway
route) from the location of the headquarters building
of CCBF and CCB Bank in Durham, North Carolina as of
the Effective Date;


(iv) any purported termination of Executive's employment
under this Agreement other than as expressly
permitted by this Agreement; or


(v) any failure by CCBF and/or CCB Bank to comply with
and satisfy Section 14(b) of this Agreement.


For purposes of this Section 7(c), any good faith determination of "Good Reason" made by Executive shall be conclusive.


(d) Notice of Termination. Any termination by CCBF and CCB Bank for Disability or for or without Cause or by Executive for Good Reason shall be communicated by Notice of Termination to the other party thereto given in accordance with Section 16(g) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of such notice except as otherwise provided in Section 7(a)). The failure by Executive or CCBF and CCB Bank to set forth in the Notice of Termination any fact or circumstance


6 which contributes to a showing of Disability, Cause or Good Reason shall not waive any right of Executive or CCBF and CCB Bank hereunder or preclude Executive or CCBF and CCB Bank from asserting such fact or circumstance in enforcing Executive's or CCBF's and CCB Bank's rights hereunder.


(e) Date of Termination. "Date of Termination" means (i) if Executive's employment is terminated by CCBF and CCB Bank for Cause or by Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if Executive's employment is terminated by CCBF and CCB Bank other than for Cause or Disability or other than by reason of death, the date of receipt of the Notice of Termination, and (iii) if Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executiv ...