UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 12, 2016
HCSB FINANCIAL CORPORATION
(Exact Name of Registrant As Specified in Its Charter)
South Carolina
(State or Other Jurisdiction of Incorporation)
| 000-26995 | 57-1079444 |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
| 3640 Ralph Ellis Blvd, Loris, South Carolina | 29569 |
| (Address of Principal Executive Offices) | (Zip Code) |
(843) 756-6333
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) On May 13, 2016, HCSB Financial Corporation (the “Company’) announced that the employment relationship between the Company, Horry County State Bank, a South Carolina state bank and wholly owned subsidiary of the Company, and Edward L. Loehr, Jr., the Company’s and the Bank’s chief financial officer, will terminate on July 31, 2016. In the interim, Mr. Loehr will assist the Company and the Bank with transition matters as an non-executive employee, and Jan H. Hollar, the Company’s and the Bank’s chief executive officer, will serve as the Company’s principal accounting officer.
(c), (e) Effective as of May 12, 2016, J. Ricky Patterson, 58, was appointed as executive vice president and chief operating officer of the Bank. Mr. Patterson brings extensive banking expertise to the Bank from his 36 years of experience in the financial services industry. During his career, Mr. Patterson has worked with both national and community banks in the Carolinas, and he has extensive operational experience covering all aspects of consumer and commercial banking, including experience with managing a troubled bank’s operations. Most notably, Mr. Patterson served as chief banking officer of Yadkin Bank in Statesville, North Carolina from August 2011 to July 2014, when Yadkin Bank, and its holding company, Yadkin Financial Corporation, merged with VantageSouth Bancshares, Inc. and Piedmont Community Bank Holdings, Inc. Mr. Patterson was a part of Yadkin’s senior management team, which helped engineer a significant turn-around in Yadkin’s operations and executed a number of key strategic measures to position the company and the bank for future growth. In addition to his experience at Yadkin Bank, Mr. Patterson has served as South Carolina community banking director at Wachovia Bank in from 2003-2008.
On May 13, 2016, the Bank entered into an employment agreement with Mr. Patterson, pursuant to which Mr. Patterson will serve as executive vice president and chief operating officer of the Bank. The employment agreement is initially for a term of three years and will thereafter be automatically extended for additional terms of one year unless either party delivers a notice of termination at least 90 days prior to the end of the term.
Under the terms of his employment agreement, Mr. Patterson will be entitled to an annual base salary of $200,000 per year, and the board of directors of the Company (or an appropriate committee thereof) will review Mr. Patterson’s base salary at least annually for adjustment based on his performance. Mr. Patterson will be eligible to receive an annual cash bonus of up to 20% of his annual base salary if he achieves certain performance levels established from time to time by the board of directors, and he will be eligible to participate in the Company’s long-term equity incentive program and for the grant of stock options, restricted stock, and other awards thereunder or under any similar plan adopted by the Company. The board of directors anticipates adopting an appropriate equity incentive plan in which the Company’s and the Bank’s employees will be eligible to participate and granting to Mr. Patterson significant to-be-determined equity awards under such plan. Additionally, Mr. Patterson will participate in the Company’s retirement, welfare, and other benefit programs and be entitled to reimbursement for travel and business expenses, as well as a monthly automobile allowance.
On May 11, 2016, the Bank received the necessary nonobjection from the FDIC for Mr. Patterson to serve as the executive vice president and chief operating officer of the Bank.
A copy of Mr. Patterson’s employment agreement is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference. The description of this agreement is qualified in its entirety by reference to the full text of the employment agreement.
(e) As previously announced, on February 29, 2016, the Company and the Bank entered into a consulting and noncompete agreement with James R. Clarkson, the Company’s and the Bank’s former president and chief executive officer, which would become effective upon the closing of the Company’s private placement transaction, which closed on April 11, 2016, and the receipt of all necessary regulatory approvals or nonobjections. Following review of the Bank’s regulators, on May 13, 2016, the Bank and Mr. Clarkson agreed to the terms of an amended agreement which does not contain restrictive covenants. In addition, under the terms of the amended consulting agreement, the Bank will pay Mr. Clarkson a monthly consulting fee of $3,648.60 and reimburse him for reasonable business expenses.
A copy of the amended consulting agreement is attached to this Current Report on Form 8-K as Exhibit 10.2 and incorporated herein by reference. The description of this agreement is qualified in its entirety by reference to the full text of the amended consulting agreement.
Item 8.01. Other Events.
On May 13, 2016, the Company issued a press release relating to Mr. Patterson’s appointment as chief operating officer of the Bank. A copy of the press release is filed as Exhibit 99.1 to, and incorporated by reference in, this report. The information in this Item 8.01 of this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Item 8.01 of this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit | |
| Number | Description |
| 10.1 | Employment Agreement between the Bank and J. Ricky Patterson, dated as of May 13, 2016 |
| 10.2 | Amended Consulting Agreement between the Bank and James R. Clarkson, dated as of May 13, 2016 |
| 99.1 | Press release, dated May 13, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HCSB FINANCIAL CORPORATION | |||
| Dated: May 13, 2016 | By: | /s/ Jan H. Hollar | |
| Name: Jan H. Hollar | |||
| Title: Chief Executive Officer | |||
EXHIBIT INDEX
| Exhibit | |
| Number | Description |
| 10.1 | Employment Agreement between the Bank and J. Ricky Patterson, dated as of May 13, 2016 |
| 10.2 | Amended Consulting Agreement between the Bank and James R. Clarkson, dated as of May 13, 2016 |
| 99.1 | Press Release, dated May 13, 2016 |
Execution Version
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) dated as of March 13, 2016, is made by and between Horry County State Bank, a South Carolina state-chartered commercial bank (the “Bank” and the “Employer”), which is a wholly owned subsidiary of HCSB Financial Corporation, a South Carolina corporation (the “Company”), and J. Ricky Patterson, an individual resident of South Carolina (the “Executive”).
WHEREAS, the Employer is engaged in the business of commercial banking, and the Executive is knowledgeable with respect to, and experienced in, that business and the Employer desires to employ the Executive, and the Executive is willing to serve, as Executive Vice President and Chief Operating Officer of the Bank on the terms and conditions herein provided;
WHEREAS, this Agreement will become effective immediately upon such time that the Bank shall have obtained all requisite approvals or nonobjections from its regulatory agencies for the Executive to begin service as Executive Vice President and Chief Operating Officer of the Bank on the terms and conditions herein provided (the “Effective Time”); and
WHEREAS, certain terms used in this Agreement are defined in Section 18 hereof.
In consideration of the foregoing, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment. The Employer shall employ the Executive, and the Executive shall serve the Employer, as Executive Vice President and Chief Operating Officer of the Bank upon the terms and conditions set forth herein. The Executive shall have such authority and responsibilities consistent with his positions as are set forth in the Bank’s Bylaws or assigned by the Bank’s Board of Directors (the “Board”) from time to time. The Executive shall report to the Board and shall devote his full business time, attention, skill and efforts to the performance of his duties hereunder, except during (i) periods of illness or periods of vacation and leaves of absence consistent with Employer policy and (ii) periods of service as a referee for the National Football League. The parties acknowledge that the Executive currently serves and will continue to serve as a referee and agree to use reasonable efforts to minimize any business disruptions for the Employer or Executive related to the Executive’s service as a referee. Further, the Executive’s service on the boards of directors (or similar body) of other business or charitable entities is subject to the prior approval of the Board. The Employer shall have the right to require the Executive to resign from any board or similar body on which the Executive may then serve if the Board determines that such activity (i) interferes with the effective discharge of the Executive’s duties and responsibilities to the Employer or that any business related to such service is then in competition with any business of the Bank, its successors or assigns or (ii) could adversely affect the reputation of the Bank.
2. Term. Unless earlier terminated as provided herein, the Executive’s employment under this Agreement shall be for the period commencing upon the Effective Date of this Agreement and ending on the third anniversary of the Effective Date of this Agreement. On each anniversary of the effective date of this Agreement, the term hereof shall automatically be extended for an additional one-year period beyond the then-effective expiration date unless a written Notice of Termination from the Employer or the Executive is received 90 days prior to such anniversary advising the other that this Agreement shall not be further extended. If either party provides timely notice of non-renewal of the Agreement, but the Executive continues to provide services to the Employer as an employee, such post-expiration employment shall be deemed to be performed on an “at-will” basis and either party may thereafter terminate such employment with or without notice and for any or no reason and without any obligations determined by reference to this Agreement.
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3. Compensation and Benefits.
(a) As of the Effective Date, the Employer shall pay the Executive an annual base salary rate of $200,000, which shall be paid in accordance with the Employer’s standard payroll procedures. The Board (or an appropriate committee of the Board) shall evaluate the Executive’s performance at least annually and make compensation adjustments as determined by the Board based on its evaluation of the Executive’s performance.
(b) The Executive shall be eligible each year to receive a cash bonus equaling up to 20% of his annual base salary if the Employer achieves certain performance levels established from time to time by the Board. Any bonus payment made pursuant to this Section 3(b) shall be made the earlier of (i) 70 days after the previous year end for which the bonus was earned by the Executive and became a payable of the Employer or (ii) the first pay period following the Company’s press release announcing its previous year’s financial performance.
(c) The Executive shall be eligible to participate in the Company’s long-term equity incentive program and for the grant of stock options, restricted stock, and other awards thereunder or under any similar plan adopted by the Company. The Board anticipates adopting an appropriate equity incentive plan in which the Company’s and the Bank’s employees will be eligible to participate. The Board anticipates granting to Employee significant to-be-determined equity award(s) under such plan. The award agreements for such equity award(s) would vest upon achievement of certain performance and time vesting metrics and would contain other customary terms and conditions. Any options or similar awards shall be issued to the Executive at an exercise price of not less than the stock’s current fair market value (as determined in compliance with Treasury Regulation § 1.409A-1(b)(5)(iv)) as of the date of grant, and the number of shares subject to such grant shall be fixed on the date of grant.
(d) In addition to the benefits specifically described in this Agreement, the Executive shall be eligible to participate in all retirement, welfare, health or other benefits plans or programs of the Employer now or hereafter applicable generally to employees of the Employer or to a class of employees that includes senior executives of the Employer. The parties agree that the benefits stated in this Section 3(d) shall be subject to the terms of such plans or programs applicable generally to employees of the Employer or to a class of employees that includes senior executives of the Employer.
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(e) The Employer shall reimburse the Executive for reasonable and necessary travel, mobile cellular and data plan, and other business expenses related to the Executive’s duties in accordance with the Employer’s business expense reimbursement policy; provided however that the Executive shall, as a condition of any such reimbursement, submit verification of the nature and amount of such expenses in accordance with such reimbursement policies and in sufficient detail to comply with rules and regulations promulgated by the United States Treasury Department. In addition, the Employer shall reimburse the Executive for educational expenses related to the Executive’s professional development and for membership in professional and civic organizations to the extent such activities are consistent with the Employer’s strategic objectives.
All expenses eligible for reimbursements described in this Agreement must be incurred by the Executive during the Term of this Agreement to be eligible for reimbursement. All in-kind benefits described in this Section 3 must be provided by the Employer during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits are subject to liquidation or exchanges for other benefits.
(f) The Employer shall provide Executive with a $500 monthly automobile allowance, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(g) The Employer shall provide the Executive with four weeks’ paid vacation per year, which shall be taken in accordance with (i) any banking rules or regulations governing vacation and (ii) the Employer’s vacation or other paid time off policy. The parties agree that reasonable periods of service as a referee for the National Football League during the business week shall not be deemed vacation days under the Employer’s vacation or other paid time off policy. Any payments made by the Employer to the Executive as compensation for paid vacation shall be paid in accordance with the Employer’s standard payroll procedures.
(h) The Executive agrees to repay any compensation previously paid or otherwise made available to the Executive under this Agreement that is subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Company are then traded), including, but not limited to, the following circumstances:
(i) where such compensation was in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Company or the Bank, including but not limited to, when the Company or the Bank shall have a restatement of financial results attributable to the Executive’s actions, whether intentional or negligent;
(ii) where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Section 263;
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(iii) where the Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); and
(iv) if, while the Executive is also a senior executive officer of the Bank, the Bank becomes, and for so long as the Bank remains, subject to the provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.
The Executive agrees to return promptly any such compensation identified by the Employer by written notice provided pursuant to Section 11. If the Executive fails to return such compensation promptly, the Executive agrees that the amount of such compensation may be deducted from any and all other compensation owed to the Executive by the Employer. If the Executive is then employed by the Employer, the Executive acknowledges that the Employer may take appropriate disciplinary action (up to, and including, Termination of Employment) if the Executive fails to return such compensation. The Executive acknowledges the Employer’s rights to engage in any legal or equitable action or proceeding in order to enforce the provisions of this Section 3(h). The provisions of this Section 3(h) shall be modified to the extent, and remain in effect for the period, required by applicable law.
4. Termination.
(a) The Executive’s employment under this Agreement may be terminated prior to the end of the term of this Agreement, if applicable, only as follows (each a “Terminating Event”):
(i) upon the death of the Executive. If the Executive’s employment is terminated because of the Executive’s death, the Employer shall pay the Executive’s estate any sums due his as base salary or reimbursement of expenses through the end of the month during which death occurred in accordance with the Employer’s standard payroll procedures. The Employer shall also pay the Executive’s estate any bonus earned through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in Section 3(b) of this Agreement. Any bonus that is earned in the year of death will be paid on the earlier of (i) 70 days after the year end in which the Executive died or (ii) the first pay period following the Company’s press release announcing its financial performance for the year in which the Executive died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Company or the Bank for the entire year and prorated through the date of the Executive’s death.
(ii) upon the Disability of the Executive for a period of 90 days, which includes any period of payment under the Employer’s accident and health plan. During the period of any Disability leading up to the termination of the Executive’s employment under this provision, the Employer shall continue to pay the Executive his full base salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with the Employer’s standard payroll procedures until the Executive becomes eligible for benefits under any long-term disability plan or insurance program maintained by the Employer; provided, however that, the amount of any such payments to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive for the same period under any other disability benefit or pension plan covering the Executive. Furthermore, the Employer shall pay the Executive any bonus earned through the date of onset of the physical or mental impairment that led to the Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in Section 3(b) of this Agreement. Any bonus that is earned in the year which includes the date of onset of the physical or mental impairment that led to the Disability will be paid on the earlier of (i) 70 days after the year end in which the Executive became Disabled or (ii) the first pay period following the Company’s press release announcing its financial performance for the year in which the Executive became Disabled.
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Execution Version
(iii) by the Employer for Cause upon delivery of a Notice of Termination to the Executive. If the Executive’s employment is terminated for Cause under this provision, the Executive shall receive only any sums due his as base salary and reimbursement of expenses through the date of such termination, which shall be paid in accordance with the Employer’s standard payroll procedures.
(iv) by the Employer without Cause upon delivery of a Notice of Termination. If the Executive’s employment is terminated without Cause under this provision, the Executive shall receive any sums due him as base salary or reimbursement of expenses through the date of such termination, which shall be paid in accordance with the Employer’s standard payroll procedures.
(v) by the Executive effective upon the 30th day after delivery of a Notice of Termination. If the Executive resigns under this provision, the Executive shall receive any sums due him as base salary or reimbursement of expenses through the date of such termination, which shall be paid in accordance with the Employer’s standard payroll procedures.
(b) With the exceptions of the provisions of this Section 4, and the express terms of any benefit plan under which the Executive is a participant, it is agreed that, upon termination of the Executive’s employment, the Employer shall have no obligation to the Executive for, and the Executive waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this Section 4, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within 60 days of termination of the Executive’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employer and the Executive shall enter into a release in the form provided by the Employer, and Executive may not revoke such release within the revocation period stated in such release, which shall acknowledge such remaining obligations and discharge the Employer and its officers, directors and employees with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Executive’s employment by the Employer, including the circumstances of such termination. In addition, if such severance payment is made by the Employer, and if the 60 day period spans two calendar years, regardless of when such release is executed by the Executive, such severance payment must be made in the subsequent calendar year, regardless of when the release is executed by the Executive.
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(c) Notwithstanding anything contained in this Agreement to the contrary,
(i) if the Executive is suspended or temporarily prohibited from participating, in any way or to any degree, in the conduct of the Company’s or the Bank’s affairs by (1) a notice served under Section 8(e) or (g) of Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. Section 1818 (e) or (g)) or (2) as a result of any other regulatory or legal action directed at the Executive by any regulatory or law enforcement agency having jurisdiction over the Executive (each of the foregoing referred to herein as a “Suspension Action”), and if this Agreement is not terminated, the Employer’s obligations under this Agreement shall be suspended as of the earlier of the effective date of such Suspension Action or the date on which the Executive was provided notice of the Suspension Action, unless stayed by appropriate proceedings. If the charges underlying the Suspension Action are dismissed, the Employer shall (i) pay on the first day of the first month following such dismissal of charges (or as provided elsewhere in this Agreement) the Executive all of the compensation withheld while the obligations under this Agreement were suspended; and (ii) reinstate any such obligations which were suspended.
(ii) if the Executive is removed or permanently prohibited from participating, in any way or to any degree, in the conduct of the Company’s or the Bank’s affairs by (1) an order issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. Section 1818 (e)(4) or (g)(1)) or (2) any other legal or law enforcement action (each of the foregoing referred to herein as a “Removal Action”), all obligations of the Executive under this Agreement shall terminate as of the effective date of the Removal Action, but any vested rights of the parties hereto shall not be affected.
(iii) if the Company or the Bank is in default (as defined in Section 3(x)(1) of the FDIA, 12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall terminate as of the date of default, but this Section (4)(f) shall not affect any vested rights of the parties hereto.
(iv) if the FDIC is appointed receiver or conservator under Section 11(c) of the FDIA (12 U.S.C. Section 1821(c)) of the Bank, the Company shall have the right to terminate all obligations of the Company under this Agreement as of the date of such receivership or conservatorship, other than any rights of the Executive that vested prior to such appointment. Any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
(d) If the FDIC provides open bank assistance under Section 13(c) of the FDIA (12
U.S.C. 1823(c)) to the Company or the Bank, but excluding any such assistance provided to the industry generally, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such assistance, other than any rights of the Executive that vested prior to the FDIC action. Any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
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Execution Version
(e) If the FDIC requires a transaction under Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Company or the Bank, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such transaction, other than any rights of the Executive that vested prior to the transaction. Any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.
(f) Notwithstanding anything contained in this Agreement to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder. In addition, all obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.
(g) In the event that the Company or the Bank is subject to Part 359 of the FDIC Rules and Regulations (12 C.F.R. Section 359, et seq.), then notwithstanding the timing for the payment of any severance amounts described in this Section 4, no such payments shall be made or commence, as applicable, that require the concurrence or consent of the appropriate federal banking agency of the Company or the Bank pursuant to Part 359 prior to the receipt of such concurrence or consent. Any payments suspended by operation of this Section 4(g) shall be paid as a lump sum within 30 days following receipt of the concurrence or consent of the appropriate federal banking agency of the Company or the Bank or as otherwise directed by such federal banking agency.
5. Ownership of Work Product. The Employer shall own all Work Product arising during the course of the Executive’s employment (prior, present or future). For purposes hereof, “Work Product” shall mean all intellectual property rights, including all Trade Secrets, U.S. and international copyrights, patentable inventions, and other intellectual property rights in any programming, documentation, technology or other work product that relates to the Company or any Affiliates, their business or customers and that the Executive conceives, develops, or delivers to the Employer at any time during his employment, during or outside normal working hours, in or away from the facilities of the Employer, and whether or not requested by the Employer. If the Work Product contains any materials, programming or intellectual property rights that the Executive conceived or developed prior to, and independent of, the Executive’s work for the Employer, the Executive agrees to point out the pre-existing items to the Employer and the Executive grants the Employer a worldwide, unrestricted, royalty-free right, including the right to sublicense such items. The Executive agrees to take such actions and execute such further acknowledgments and assignments as the Employer may reasonably request to give effect to this provision.
6. Protection of Trade Secrets. The Executive agrees to maintain in strict confidence and, except as necessary to perform his duties for the Employer, the Executive agrees not to use or disclose any Trade Secrets of the Company or any Affiliates during or after his employment. “Trade Secret” means information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list, that (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
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7. Protection of Other Confidential Information. In addition, the Executive agrees to maintain in strict confidence and, except as necessary to perform his duties for the Employer, not to use or disclose any Confidential Business Information of the Company or any Affiliates during his employment and for a period of 24 months following termination of the Executive’s employment. “Confidential Business Information” shall mean any internal, non-public information (other than Trade Secrets already addressed above) concerning the Company’s or its Affiliate’s financial position and results of operations (including revenues, assets, net income, etc.); annual and long-range business plans, product or service plans; marketing plans and methods; training, education and administrative manuals; customer and supplier information and purchase histories; and employee lists. The provisions of Sections 6 and 7 shall also apply to protect Trade Secrets and Confidential Business Information of third parties provided to the Employer under an obligation of secrecy.
8. Return of Materials. The Executive shall surrender to the Employer, promptly upon its request and in any event upon termination of the Executive’s employment, all media, documents, notebooks, computer programs, handbooks, data files, models, samples, price lists, drawings, customer lists, prospect data, or other material of any nature whatsoever (in tangible or electronic form) in the Executive’s possession or control, including all copies thereof, relating to the Company or its Affiliates, their businesses or customers. Upon the request of the Employer, the Executive shall certify in writing compliance with the foregoing requirement.
9. Withholding. The Employer may deduct from each payment of compensation hereunder all amounts required to be deducted and withheld in accordance with applicable federal and state income, FICA and other withholding requirements.
10. Successors; Binding Agreement. The rights and obligations of this Agreement shall bind and inure to the benefit of the surviving entity in any merger or consolidation in which the Company or the Bank is a party, or any assignee of all or substantially all of the Company’s or the Bank’s business and properties. The Executive’s rights and obligations under this Agreement may not be assigned by him, except that his right to receive accrued but unpaid compensation, unreimbursed expenses and other rights, if any, provided under this Agreement, which survive termination of this Agreement shall pass after death to the personal representatives of his estate.
11. Notice. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other; provided however that all notices to the Employer shall be directed to the attention of the Employer with a copy to the Chief Executive Officer. All notices and communications shall be deemed to have been received on the date of delivery thereof.
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12. Governing Law. This Agreement and all rights hereunder shall be governed by the laws of the State of South Carolina, except to the extent governed by the laws of the United States of America in which case federal laws shall govern. The parties agree that any appropriate state court located in Horry County, South Carolina or federal court for the District of South Carolina shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement shall be a proper forum in which to adjudicate such case or controversy. The parties consent and waive any objection to the jurisdiction or venue of such courts.
13. Non-Waiver. Failure of the Employer to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered to be a waiver of such provisions or rights, or in any way affect the validity of this Agreement.
14. Saving Clause. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held by any court or other tribunal of competent jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void, or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.
15. Compliance with Internal Revenue Code Section 409A. All payments that may be made and benefits that may be provided pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code. Any payments made under Sections 3 and 4 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Any remaining payments under Sections 3 and 4 are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9). Each payment made under Sections 3 and 4 shall be treated as a "separate payment", as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A. Further, notwithstanding anything to the contrary, all severance payments payable under the provisions of Section 4, if any, shall be paid to the Executive no later than the last day of the second calendar year following the calendar year in which occurs the date of Executive's termination of employment. None of the payments under this Agreement are intended to result in the inclusion in Executive's federal gross income on account of a failure under Section 409A(a)(1) of the Code. The parties intend to administer and interpret this Agreement to carry out such intentions. However, the Employer does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in the Executive's gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation. Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment shall be paid (or provided) in accordance with the following:
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Execution Version
(a) If the Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s termination (the “Separation Date”), and if an exemption from the six month delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no such payment that is payable on account of the Executive's termination shall be made or commence during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of the Executive’s death. The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period.
(b) Payments with respect to reimbursements of expenses or benefits or provision of fringe or other in-kind benefits shall be made on or before the last day of the calendar year following the calendar year in which the relevant expense or benefit is incurred. The amount of expenses or benefits eligible for reimbursement, payment or provision during a calendar year shall not affect the expenses or benefits eligible for reimbursement, payment or provision in any other calendar year.
16. Compliance with the Dodd–Frank Wall Street Reform and Consumer Protection Act. Notwithstanding anything to the contrary herein, any incentive payments to the Executive shall be limited to the extent required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), including, but not limited to, clawbacks for such incentive payments as required by the Dodd-Frank Act and Section 10D of the Securities Exchange Act of 1934. The Executive agrees to such amendments, agreements, or waivers that are required by the Dodd-Frank Act or requested by the Employer to comply with the terms of the Dodd-Frank Act.
17. Compliance with Regulatory Restrictions. Notwithstanding anything to the contrary herein, and in addition to any restrictions stated above, any compensation or other benefits paid to the Executive shall be limited to the extent required by any federal or state regulatory agency having authority over the Bank or, if applicable, the Company. The Executive agrees that compliance by the Bank or the Company with such regulatory restrictions, even to the extent that compensation or other benefits paid to the Executive are limited, shall not be a breach of this Agreement by such entity. The Executive agrees that such restrictions include any restrictions applicable due to the Company’s participation in the Treasury’s Troubled Asset Relief Program - Capital Purchase Program (the “CPP”).
18. Certain Definitions.
(a) “Affiliate” shall mean any business entity controlled by, controlling or under common control with the Company, including but not limited to the Bank.
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Execution Version
(b) “Cause” shall consist of any of (i) the commission by the Executive of a willful act (including, without limitation, a dishonest or fraudulent act) or a grossly negligent act, or the willful or grossly negligent omission to act by the Executive, which is intended to cause, does cause or is reasonably likely to cause material harm to the Company or any Affiliate (including harm to its business reputation); (ii) the indictment of the Executive for the commission or perpetration by the Executive of any felony or any crime involving dishonesty, moral turpitude or fraud; (iii) the material breach by the Executive of this Agreement that, if susceptible of cure, remains uncured 10 days following written notice to the Executive of such breach; (iv) the receipt of any formal written notice that any regulatory agency having jurisdiction over the Company or the Bank intends to institute any form of formal regulatory action against the Executive, the Company or the Bank (provided that the Board determines in good faith, with the Executive abstaining from participating in the consideration of and vote on the matter, that the subject matter of such action involves acts or omissions by the Executive and further provided that, the parties acknowledge that any regulatory action currently issued to the Company or the Bank shall not constitute the basis for a determination of cause by the Board); (v) the exhibition by the Executive of a standard of behavior within the scope of his employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance abuse or sexual misconduct) to a level which, in the Board’s good faith and reasonable judgment, with the Executive abstaining from participating in the consideration of and vote on the matter, is materially detrimental to the Employer’s best interest, that, if susceptible of cure remains uncured 10 days following written notice to the Executive of such specific inappropriate behavior; or (vi) the failure of the Executive to devote his full business time and attention to his employment as provided under this Agreement that, if susceptible of cure, remains uncured 30 days following written notice to the Executive of such failure. In order for the Board of Directors to make a determination that termination shall be for Cause, the Board must provide the Executive with notice of the grounds providing the purported basis for termination and provide the Executive an opportunity to meet with the Board in person to address the proposed grounds.
(c) “Code” shall mean the Internal Revenue Code of 1986.
(d) “Disability” or “Disabled” shall mean as defined by Treasury Regulation § 1.409A-3(i)(4); provided however that, for purposes of this definition, the accident and health plan covering the Executive shall only be the long term disability plan and not any other the accident and health plan.
(e) “Notice of Termination” shall mean a written notice of termination from the Employer or the Executive which specifies an effective date of termination (not less than 30 days from the date of the notice), indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.
(f) “Standard payroll procedures” shall mean payment no less frequently than monthly.
(g) “Terminate,” “terminated,” “termination,” or “termination of the Executive’s employment” shall mean separation from service as defined by Treasury Regulation § 1.409A-1(h).
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Execution Version
19. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any understandings and arrangements, oral or written, including the Consulting Agreement, between the parties hereto with respect the subject matter hereof.
20. Survival. The obligations of the parties pursuant to Sections 3(h), 5 through 8, and 12, as applicable, shall survive the Executive’s Termination of Employment hereunder for the period designated under each of those respective sections.
23. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
[signatures appear on following page]
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Execution Version
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and its seal to be affixed hereunto by its officers thereunto duly authorized and the Executive has signed and sealed this Agreement, effective as of the date described above.
| HORRY COUNTY STATE BANK | |||||
| ATTEST: | |||||
| By: | By: | /s/ Jan H. Hollar | |||
| Name: | Name: | Jan H. Hollar | |||
| Title: | Chief Executive Officer | ||||
| EXECUTIVE | |||||
| /s/ J. Ricky Patterson | |||||
| J. Ricky Patterson | |||||
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Execution Version
AMENDED AND RESTATED CONSULTING AGREEMENT
THIS AMENDED AND RESTATED CONSULTING AGREEMENT (this “Agreement”) dated as of May 13, 2016, is made by and between Horry County State Bank, a South Carolina state-chartered commercial bank (the “Bank”), which is a wholly owned subsidiary of the HCSB Financial Corporation (the “Company”), and James R. Clarkson, an individual resident of South Carolina.
WHEREAS, Mr. Clarkson has served as President and Chief Executive Officer of the Company and the Bank for the past 29 years;
WHEREAS, on April 11, 2016, the Company completed a private offering of its common stock in which it raised approximately $45 million in new capital (the “Offering”), and upon the closing of the Offering, Mr. Clarkson retired as the President and Chief Executive Officer of the Company and the Bank;
WHEREAS, Mr. Clarkson remains an employee of the Company and the Bank and will continue to serve as an advisor to the Chief Executive Officer of the Company and the Bank through June 30, 2016;
WHEREAS, Mr. Clarkson has significant and valuable institutional knowledge of the Company, the Bank, and the Bank’s customers and employees and his continued assistance and support will be very important to the success of the Bank, and therefore, effective as of July 1, 2016, the Bank desires to retain Mr. Clarkson to provide consulting services to it pursuant to the terms and conditions set forth herein; and
WHEREAS, Mr. Clarkson desires to accept such engagement on the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows:
1. Engagement; Consultant Relationship; Duties. Effective as of July 1, 2016, the Bank hereby engages Mr. Clarkson to provide, and he hereby agrees to render, at the request of the Bank, those consulting services to the Bank as set forth on Appendix A hereto and subject to the terms, conditions, work schedules, and performance objectives described therein.
2. Term and Termination. The term of this Agreement (the “Term”) shall commence on July 1, 2016 and shall continue until the earliest of: (i) the close of business on the last business day immediately preceding the first anniversary of the effective date of this Agreement; (ii) Mr. Clarkson’s death; (iii) upon the Disability (as defined below) of Mr. Clarkson for a period of 90 consecutive days; (iv) Mr. Clarkson’s termination of this Agreement by providing two weeks’ prior written notice; or (v) the Bank’s termination of this Agreement at any time upon Mr. Clarkson’s material breach of this Agreement by failing to adequately provide the services set forth on Appendix A, which failure has not been cured within 30 days of notice from the Bank and provided that the Mr. Clarkson has not previously given the Bank notice that he has terminated this Agreement pursuant to this Section 2. Notwithstanding anything in this Agreement to the contrary, the Bank’s obligations to make payments to Mr. Clarkson hereunder shall also terminate effective immediately upon Mr. Clarkson’s indictment for a crime involving dishonesty, moral turpitude or fraud or any felony, or the Bank’s receipt of formal written notice that any regulatory agency having jurisdiction over the Company or the Bank intends to institute any form of formal regulatory action against Mr. Clarkson. Certain rights and obligations of the parties shall continue following the termination of this Agreement as stated in Section 19 hereof.
3. Compensation. During the Term of this Agreement, as compensation for all services rendered by Mr. Clarkson under this Agreement, the Bank shall pay him the sum of $3,648.60 per month, or for the first and last months of the Term, a pro rata portion for any partial month. Payments will be made approximately every two weeks in arrears at the same time as the Bank processes its periodic payroll disbursements. All such compensation shall be payable without deduction for federal income, social security, or state income taxes or any other amounts. Mr. Clarkson acknowledges and agrees that he shall be solely responsible for making all such filings and payments and shall indemnify and hold harmless the Bank for any liability, claim, expense, or other cost incurred by the Bank arising out of or related to his obligations pursuant to this Section.
4. Expenses. During the Term of this Agreement, Mr. Clarkson shall be reimbursed by the Bank for all reasonable business expenses incurred in connection with the performance of his duties hereunder, and all such reimbursements shall be paid in accordance with the reimbursement policies of the Bank in effect from time to time.
5. Independent Contractor. Mr. Clarkson is an independent contractor providing services to the Bank. The Bank will report all payments to be made hereunder on IRS Forms 1099 as payments to Mr. Clarkson for independent contracting services.
6. Ownership of Work Product. The Bank shall own all Work Product arising during the period Mr. Clarkson is providing services to the Bank. For purposes hereof, “Work Product” shall mean all intellectual property rights, including all Trade Secrets, U.S. and international copyrights, patentable inventions, and other intellectual property rights in any programming, documentation, technology or other work product that relates to the Bank or any Affiliates (as defined below), their business, or customers and that Mr. Clarkson conceives, develops, or delivers to the Bank at any time during the period he is providing services to the Bank, during or outside normal working hours, in or away from the facilities of the Bank, and whether or not requested by the Bank.
7. Protection of Trade Secrets. Mr. Clarkson agrees to maintain in strict confidence and, except as necessary to perform his duties for the Bank, he agrees not to use or disclose any Trade Secrets of the Bank or any Affiliates during or after the period he is providing services to the Bank. “Trade Secret” means information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data, or customer list, that (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
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8. Protection of Other Confidential Business Information. In addition, Mr. Clarkson agrees to maintain in strict confidence and, except as necessary to perform his duties for the Bank, not to use or disclose any Confidential Business Information of the Bank during Mr. Clarkson’s engagement pursuant to this Agreement and for a period of 24 months thereafter. “Confidential Business Information” shall mean any internal, non-public information (other than Trade Secrets already addressed above) concerning the Bank’s financial position and results of operations (including revenues, assets, net income, etc.); annual and long-range business plans, product or service plans; marketing plans and methods; training, education and administrative manuals; customer and supplier information and purchase histories; and employee lists. The provisions of Sections 7 and 8 shall also apply to protect Trade Secrets and Confidential Business Information of third parties provided to the Bank under an obligation of secrecy.
9. Return of Materials. Mr. Clarkson shall surrender to the Bank, promptly upon its request and in any event upon cessation of his services to the Bank, all media, documents, notebooks, computer programs, handbooks, data files, models, samples, price lists, drawings, customer lists, prospect data, or other material of any nature whatsoever (in tangible or electronic form) in his possession or control, including all copies thereof, relating to the Bank, its business, or customers. Upon the request of the Bank, Mr. Clarkson shall certify in writing compliance with the foregoing requirement. Mr. Clarkson may retain a copy of this Agreement after the expiration of the Term or any earlier termination of this Agreement.
10. Notice. For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other; provided however that all notices to the Bank shall be directed to the attention of the Chief Executive Officer of the Bank. All notices and communications shall be deemed to have been received on the date of delivery thereof.
11. Governing Law. This Agreement and all rights hereunder shall be governed by the laws of the State of South Carolina, except to the extent governed by the laws of the United States of America in which case federal laws shall govern. The parties agree that any appropriate state court located in South Carolina or federal court for the District of South Carolina shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement shall be a proper forum in which to adjudicate such case or controversy. The parties consent and waive any objection to the jurisdiction or venue of such courts.
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12. Non-Waiver. Failure of the Bank to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered to be a waiver of such provisions or rights, or in any way affect the validity of this Agreement.
13. Saving Clause. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held by any court or other tribunal of competent jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void, or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.
14. Successors; Binding Agreement. The rights and obligations of this Agreement shall bind and inure to the benefit of the surviving entity in any merger or consolidation in which the Bank is a party, or any assignee of all or substantially all of the Bank’s business and properties. Mr. Clarkson’s rights and obligations under this Agreement may not be assigned by him, except that his right to receive accrued but unpaid compensation, unreimbursed expenses, and other rights, if any, provided under this Agreement, which survive termination of this Agreement shall pass after death to the personal representatives of his estate.
15. Compliance with Regulatory Restrictions. Notwithstanding anything to the contrary herein, and in addition to any restrictions stated above, this Agreement shall be modified, or any compensation or other benefits to be paid to Mr. Clarkson hereunder shall be limited, to the extent required by any federal or state regulatory agency having authority over the Company or the Bank. Mr. Clarkson agrees that compliance by the Company or the Bank with such modifications or limitations, even to the extent that compensation or other benefits paid to him are limited, shall not be a breach of this Agreement by the Bank. The Bank and Mr. Clarkson agree, however, that if this Agreement is modified or any of the compensation or other benefits to be paid to Mr. Clarkson hereunder are prohibited by any federal or state regulatory agency having authority over the Company or the Bank, Mr. Clarkson shall have the right to terminate this Agreement effective immediately.
16. Compliance with Internal Revenue Code Section 409A. All payments that may be made and benefits that may be provided pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code. Any payments made under Section 3 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Each payment made under Section 3 shall be treated as a “separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A. None of the payments under this Agreement are intended to result in the inclusion in Mr. Clarkson’s federal gross income on account of a failure under Section 409A(a)(1) of the Code. The parties intend to administer and interpret this Agreement to carry out such intentions. However, the Bank does not represent, warrant, or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in Mr. Clarkson’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation. In addition, the Bank shall pay all reimbursements hereunder as soon as administratively practicable, but in no event shall any such reimbursements be paid after the last day of the taxable year following the year in which the expense was incurred.
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17. Certain Definitions.
(a) “Affiliate” shall mean any business entity controlled by, controlling or under common control with the Bank, including, but not limited to, the Company.
(b) “Code” shall mean the Internal Revenue Code of 1986.
(c) “Disability” or “Disabled” shall mean as defined by Treasury Regulation § 1.409A-3(i)(4).
18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof.
19. Survival. The obligations of the parties pursuant to Sections 6 through 9 and 11, as applicable, shall survive the termination of this Agreement hereunder for the period designated under each of those respective sections.
20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and its seal to be affixed hereunto by an officer thereunto duly authorized and Mr. Clarkson has signed and sealed this Agreement, effective as of the date described above.
| HORRY COUNTY STATE BANK | |||||
| ATTEST: | |||||
| By: | By: | /s/ Michael S. Addy | |||
| Name: | Name: | Michael S. Addy | |||
| Title: | Chairman | ||||
| /s/ James R. Clarkson | |||||
| James R. Clarkson | |||||
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APPENDIX A
In his role as a consultant, Mr. Clarkson shall devote appropriate time, efforts, and abilities to the performance of the following activities, the advancement of the interests of the Bank, and the achievement of the goals and objectives of the Bank, including, without limitation:
| · | assisting with unresolved issues from the Bank’s past operations, such as resolving, strengthening and/or collecting non-performing assets and collecting previously charged off loans; |
| · | advising Bank management as to matters of Bank institutional knowledge such as prior Bank philosophy, the competitive factors of the Bank’s market, current personnel qualifications and utilization as well as historical effectiveness of Bank product and services offerings; |
| · | advising Bank management and the Board on matters relating to the Bank’s market area learned while serving as a community banker over the past 42 years in the Bank’s market area. |
| · | providing such other consulting services as may be requested by the Chief Executive Officer of the Bank from time to time. |
In performing these services, Mr. Clarkson shall comply with all of the Bank’s policies and procedures and report to the Chief Executive Officer of the Bank on an every other week basis and at such other times as may be required to address material matters. Upon no less than 72 hours’ notice, Mr. Clarkson shall provide written or oral report(s) to the Board of Directors of the Bank regarding his activities as may be requested by the Chief Executive Officer from the Bank. The parties agree that Mr. Clarkson shall, on average, dedicate eight hours per week, for 48 work weeks during the Term, to performing these services. Mr. Clarkson’s performance of the above-listed activities shall be assessed by the Board of Directors in accordance with the following performance objectives: response time between information being requested by the Bank and provided by Mr. Clarkson, utility of the information provided by Mr. Clarkson regarding the Bank and its market area, effectiveness of Mr. Clarkson in assisting Bank management with addressing unresolved issues in the Bank’s past operations.
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Horry County State Bank
Press Release
FOR IMMEDIATE RELEASE
May 13, 2016
Contact:
Jan H. Hollar
Chief Executive Officer
HCSB Financial Corporation/Horry County State Bank
(843) 716-6117
J. Rick Patterson Joins Horry County State Bank as Executive Vice President and Chief Operating Officer
Loris, SC, May 13, 2016----Horry County State Bank is pleased to announce the addition of J. Rick Patterson as Executive Vice President and Chief Operating Officer. In this role, Patterson will oversee all commercial and retail banking activities for the Bank, as well as loan and deposit operations. He will be based out of the Horry County State Bank office in Myrtle Beach.
Patterson comes to Horry County State Bank with 36 years of banking experience, most recently as Executive Vice President and Chief Banking Officer at Yadkin Bank. In his previous role, he was responsible for oversight and management of the bank’s commercial and retail activities, to include its expansive North and South Carolina branch network. Prior to that, he was the South Carolina Community Banking Director for Wachovia Bank, managing all community banking activities for the company throughout the state.
Notably, Patterson also actively serves as an official in the National Football League, a position he has held for the past 20 years, and one of only two active NFL officials from South Carolina. Patterson has officiated in two Super Bowls, an honor reserved for those with the highest performance ratings.
Patterson served as the chairman of the Cherokee County Community Foundation in 2015 and currently serves as a Trustee and chairman of the finance committee at Limestone College.
“We are excited to have Rick on our executive team as Chief Operating Officer. With his banking experience and deep knowledge of our South Carolina markets, we will ensure that our customer experience is leading the way among community banks in our region,” said Jan Hollar, Chief Executive Officer at Horry County State Bank.
A native of Gaffney, South Carolina, Patterson resides with his family in Surfside Beach, South Carolina.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements preceded by, followed by, or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. These statements are based upon the current belief and expectations of the Company’s management team and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control). Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved. Additional factors that could cause other Company’s results to differ materially from those described in the forward-looking statements can be found in the Company’s reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s Internet site (http://www.sec.gov). All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.