Employment Agreement dated July 22, 2021, by and among SouthState Bank, N.A. and Kurt A. Shreiner
This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this 22nd day of July 2021 but shall be effective upon the Effective Time (as defined in the Merger Agreement (as defined below)), by and between South State Bank, National Association (the “Bank”), and Kurt Shreiner (the “Executive”).
WHEREAS, the Executive is presently serving as the President, Corporate Financial Services Division of Atlantic Capital Bancshares, Inc. and Atlantic Capital Bank, N.A. (the “Target”);
WHEREAS, South State Corporation (“Company”) has entered into an Agreement and Plan of Merger, dated July 22, 2021 (“Merger Agreement”) with Target, pursuant to which Target will merge with and into the Company, subject to the terms and conditions of the Merger Agreement (the “Merger”);
WHEREAS, the Executive and the Bank desire for the Executive to serve as the President of Corporate Financial Services Division for the Bank following the Effective Time upon the closing of the Merger, pursuant to the terms and conditions of the Merger Agreement;
WHEREAS, the execution and delivery of this Agreement is a condition to the willingness of Company to enter into the Merger Agreement;
WHEREAS, except as expressly set forth in Section 2.3(d), this Agreement is intended to supersede in its entirety that certain Executive Severance and Change in Control Plan of Target (the “Target CIC Plan”) and the Executive’s Participation Agreement thereunder (the “Participation Agreement”, and, together with the Target CIC Plan, the “Prior Agreement”), which Prior Agreement shall terminate and be of no further force and effect as of the Effective Time of the Merger (other than with respect to the provisions set forth in Section 2.3(d)); and
WHEREAS, in the event the Effective Time does not occur, this Agreement shall be null and void ab initio and of no further force or effect, and the Prior Agreement shall remain in effect in accordance with its terms.
NOW THEREFORE, in consideration of the promises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1 EMPLOYMENT
ARTICLE 2 COMPENSATION
4.4 of this Agreement. The Pay to Lead Award shall be granted pursuant to the Company’s equity incentive plan and shall be subject to the terms and conditions (including with respect to vesting and settlement) of the award agreement evidencing such grant, which terms shall not be inconsistent with the terms of this Agreement.
|2.3||Benefit Plans and Perquisites.|
ARTICLE 3 EMPLOYMENT TERMINATION
|3.1||Termination Because of Death or Disability.|
|(a)||A reduction in the Executive’s Base Salary;|
The Executive must give notice to the Bank of the existence of one or more of the conditions described in clauses (a) through (d) above within 30 days after the initial existence of the condition, the Bank shall have 30 days thereafter to remedy the condition and the Executive resigns from his or her employment effective no later than 180 days after the initial existence of such grounds.
ARTICLE 4 SEVERANCE COMPENSATION
(b) In consideration for his continued employment hereunder and the additional payments and benefits described in this Section 4.1(b) and otherwise under this Agreement, the Executive hereby waives his right to terminate his employment with Good Reason solely in connection with the closing of the Merger and his right to any severance or other payments or benefits (other than the life insurance benefits described in Section 2.3(d)). In consideration for such waiver, and subject to the second to last sentence of this Section 4.1(b), the Bank shall allocate the Executive an amount equal to $1,277,500.00 under the South State Deferred Income Plan, as amended and
restated as of August 24, 2020 (the “Deferred Compensation Payment”), which amount shall not be subject to any vesting, forfeiture or additional conditions (other than with respect to a termination for Cause as described in this Section 4.1(b)). The Deferred Compensation Payment shall be payable upon the same payment schedule as applied to the Severance Payment (as defined in the Target CIC Plan) under the Target CIC Plan. Notwithstanding the foregoing, to the extent that the Executive’s employment with the Bank is terminated by the Bank for Cause within 12 months after the Effective Date, then the Deferred Compensation Payment shall be forfeited in its entirety. For the avoidance of doubt, payment of the Deferred Compensation Payment will be in addition to, and not in lieu of, any severance payable under Section 4.2.
(x) the Executive’s Target Bonus and (y) the Executive’s annual cash bonus incentive compensation earned by the Executive as of the last calendar year end of employment (as calculated annually based on goals and target defined in the plan or arrangement under which such bonus or incentive compensation is awarded) that remains paid, without the discount for the time value (the “Severance Payment”). The portion of the Severance Payment that is attributable to the Executive’s (i) Base Salary shall be paid in accordance with the Bank’s customary payroll practices for the 12-month period following the date of termination and (ii) annual cash bonus incentive shall be paid within thirty (30) days after the Executive’s employment terminates with the Bank (or if the Executive and the Bank have not entered into a release as described in Section
4.4 below in the initial thirty (30) day period, up to sixty (60) days after the Executive’s employment terminates). The Severance Payment shall not be reduced to account for the time value of money or discounted to present value. In addition, if Executive’s employment is terminated by the Bank without Cause or by the Executive voluntarily but with Good Reason, any Atlantic Capital Equity Awards (as defined in Section 1.7(e) of the Merger Agreement) that converted into Company equity awards pursuant to Section 1.7 of the Merger Agreement will become fully vested, earned and payable.
(b) If (i) under the terms of the applicable policy or policies for the insurance benefits specified in Section 4.3(a), it is not possible to continue the Executive’s coverage, or (ii) when employment termination occurs, (A) the Executive is a specified employee within the meaning of Section 409A of the IRC, (B) if any of the continued insurance benefits specified in Section 4.3(a) would be considered deferred compensation under Section 409A, and (C) if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) is not available for that particular insurance benefit, instead of continued insurance coverage under Section 4.3(a), the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for the lesser of the number of months remaining in the Term or the number of months until the Executive attains age 65. The lump- sum payment shall be made within 60 days after employment termination (subject to Section 8.11 below).
4.4 and shall be effective regardless of whether the Executive enters into the release.
ARTICLE 5 CONFIDENTIALITY AND CREATIVE WORK
|(d)||trade secrets, as defined from time to time by the laws of the State of Florida.|
The Executive understands that the above list is not exhaustive, and that Confidential Information includes any information that is marked or otherwise identified as confidential or proprietary or that would appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used. The Executive further understands that Confidential Information developed by the Executive in the course of the Executive’s employment by the Bank and its affiliates shall be owned by the Bank and subject to the confidentiality restrictions of this Agreement. Notwithstanding the foregoing, Confidential Information shall exclude information that, as of the date hereof or at any time after the date hereof, is published or disseminated without obligation of confidence or that becomes a part of the public domain (i) by or through action of the Bank, or (ii) otherwise than by or at the direction of the Executive. Further, nothing in this Agreement shall prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.
(C) does not disclose the trade secret, except pursuant to court order.
(b) results from any work performed by the Executive for the Bank or any of its affiliates. However, to enable the Bank to determine the rights of the Bank and the Executive in any creative work and work product developed by the Executive that the Executive considers non-assignable under this Section 5.4, including but not limited to inventions, patents, trademarks, and copyrights, the Executive shall during the Term timely report to the Bank all such creative work and work product.
RESTRICTIONS APPLICABLE DURING AND AFTER EMPLOYMENT TERMINATION
(ii) as offered by the Bank or any of its affiliates to any of their Customers during the Restricted Period. Subject to the above provisions and conditions of this subparagraph (b), the Executive also promises that, during the Restricted Period, the Executive shall not become employed by or serve as a director, partner, organizer, consultant, agent, or owner of 5% or more of the outstanding stock of or contractor to any entity providing or proposing to provide Financial Products or Services that is located in or conducts business in the Restricted Territory.
ARTICLE 7 MISCELLANEOUS
|7.1||Successors and Assigns.|
Participant may be bound by or subject to by contract with the Company or the Bank or their respective affiliates or by applicable law or regulation, with respect to confidentiality, nonsolicitation or noncompetition.
or benefits received in connection with the termination of the Executive’s employment due to a change in Control or otherwise) under this Agreement or under any other arrangement or agreement or otherwise, shall constitute “parachute payments” under Section 280G of the IRC (the “280G Payments”), and would but for this section 7.10, be subject to the excise tax under Section 4999 of the IRC, then prior to making such 280G Payments, the parties agree to take all reasonable actions, including hiring appropriate independent consulting and/or accounting firms, and execute such documents as may be necessary and appropriate to minimize the payments or benefits characterized as, or constituting, “parachute payments” within the meaning of 280G of the IRC, provided, however, that to the extent that such actions result in the excise tax still being imposed, then a calculation shall be made comparing (a) the Net Benefit (as defined below) to the Executive of the 280G Payments after payment of the excise tax, to (b) the Net Benefit to the Executive if the 280G Payments are limited to the extent necessary to avoid the imposition of the excise tax to any portion of the payment. If the amount calculated under (a) is less than (b) then the payments will be reduced to the extent necessary to avoid the imposition of the excise tax to any portion of the 280G Payments. For purposes of this Section 7.10, the term “Net Benefit” shall mean the present value of the 280G Payments net of all federal, state, local, foreign, employment and excise taxes. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing the payments and benefits in the following order: (i) cash payments that may not be valued under Treas. Reg. § 1.280G-1, Q&A-24(c) (“24(c)”); (ii) equity-based payments that may not be valued under 24(c); (iii) cash payments that may be valued under 24(c);
(iv) equity-based payments that may be valued under 24(c); and (v) other types of benefits. With respect to each category of the foregoing, such reduction shall occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the IRC and next with respect to payments that are deferred compensation, in each case, beginning with payments or benefits that are to be paid the farthest in time from the determination. Any reduction made pursuant to this Section 7.10 shall be made in a manner determined by the Bank to comply with Section 409A of the IRC. Without limiting the generality of the foregoing, the Bank and the Executive shall cooperate in good faith in valuing services to be provided by the Executive (including, without limitation, Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant), on or after the change in ownership or control. The Bank shall bear the fees of any independent consulting and/or accounting firms retained pursuant to this Section 7.10.
[Signatures on following page]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.
South State Bank, National
[Signature Page to Employment Agreement]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.
South State Bank, National