Exhibit 10.16
Park Sterling Corporation
 
May 11, 2012

Kim S. Price

Dear Kim:
 
The purpose of this consulting agreement (the “Agreement”) is to set forth our
agreement and understanding regarding the terms of your retention as a
consultant to Park Sterling Corporation (the “Corporation”) following the
consummation of the transactions contemplated by the Agreement and Plan of
Merger dated as of May 13, 2012 (the “Merger Agreement”) between the Corporation
and Citizens South Banking Corporation (“Citizens South”).
 
The parties agree and acknowledge that this Agreement shall become effective as
of the “Effective Time” (as defined in the Merger Agreement).  In the event that
the “Effective Time” does not occur for any reason, this Agreement shall be
deemed null and void and of no force and effect.
 
1.           Consulting Arrangement. The Corporation shall engage your services,
and you shall provide services, as a consultant on the terms and conditions set
forth in this Agreement. The term of this arrangement shall be for a period of
five years commencing at the Effective Time, unless sooner terminated in
accordance with this Agreement.  The period of time you are engaged to perform
services under this Agreement is referred to as the “Consulting Period”.  You
agree that your employment with Citizens South will end as of the Effective
Time.
 
2.           Services. You agree to provide such consulting and advisory
services to the Corporation and its affiliates during the Consulting Period as
the Corporation shall reasonably request. Without limiting the generality of the
foregoing, it is understood that you will, upon reasonable request, be available
to support the Corporation’s and its affiliates’ merger activities, government
relations, community relations, industry group associations, professional
associations, business development efforts and other matters identified from
time-to-time. Such services will be provided at times and location(s) or by
teleconference as may be reasonably requested by the Corporation, and such
services will not exceed twenty (20) hours per week. The Corporation agrees to
cooperate with you in scheduling the time and place for any services to be
performed under this Agreement in order to accommodate, to the extent
practicable, your personal schedule and other commitments.  During the
Consulting Period, you also agree: (a) not to engage in any activities related
to the Corporation or its affiliates beyond those requested by the Corporation
under this Agreement and those properly undertaken as a director of the
Corporation or an affiliate while serving as one; and (b) to remain supportive
of the Corporation and its affiliates’ business and the transaction under the
Merger Agreement both publically and with employees and customers.
 
3.           Independent Contractor Status. You shall perform services under
this Agreement as an independent contractor and not as an employee, agent or
representative of the Corporation or any of its affiliates. Unless authorized in
writing by the Corporation, you shall not have the power or authority to act on
behalf of, or bind in any way, the Corporation or any of its affiliates.
 
4.           Fees.
 
 (a)           Consulting Fees. As compensation for your consulting services,
you will receive a consulting fee of $250,000 per year during the Consulting
Period.  Such fee shall be paid in equal monthly installments of $20,833.33
during the Consulting Period and pursuant to the Corporation’s customary
practices for independent contractors.  These fees may be paid by the
Corporation or one of its affiliates.
 
  (b)           Expense Reimbursement. Upon submission of the appropriate
documentation and in accordance with the Corporation’s and its affiliates’
policies in effect from time to time, the Corporation will reimburse you for
your reasonable business expenses incurred during the Consulting Period in
connection with your performance of services at the request of the Corporation.
 
5.           Termination of Consulting Arrangement. The parties hereto expect
this consulting arrangement to continue for a full 5 year term.  The Corporation
may, however, choose to end the arrangement prior to the 5 year anniversary of
the Effective Time, subject to the following provisions:
 
 
 

--------------------------------------------------------------------------------

 
 
(a)           Termination By The Corporation. The Corporation may provide notice
and terminate this engagement at any time during the Consulting Period with or
without Cause (as defined below). If the consulting arrangement is terminated
without Cause, the Corporation will be obligated to pay you the Consulting Fees
through the 5 year anniversary of the Effective Time.  If the consulting
arrangement is terminated for Cause, the Corporation’s obligation to pay any
remaining Consulting Fees hereunder will cease immediately. For purposes of this
Agreement, “Cause” shall exist based upon your action or omission constituting:
(i) gross negligence or willful misconduct that is demonstrably injurious to the
Corporation or one of its affiliates (excluding any driving related violations
or offenses); (ii) fraud, misappropriation of funds or other assets or theft
that, in each case, is either in connection with the performance of services or
demonstrably injurious to the Corporation or one of its affiliates;
(iii) willful breach of fiduciary duty or a willful dishonest act that, in each
case, is demonstrably injurious to the Corporation or one of its affiliates; or
(iv) material breach of your obligations contained in this Agreement or your
Noncompetition Agreement with the Corporation.  “Cause” shall also exist if:
(vi) you are indicted for, convicted of, or plea guilty or nolo contendere to a
felony (excluding any driving related violations or offenses); or (vii) you are
removed or prohibited from participating in the conduct of the Corporation’s or
one of its affiliates’ affairs, or this Agreement is lawfully terminated, by a
regulatory, administrative, court or similar order.  If the Corporation
terminates the Consulting Period for Cause, then you agree to immediately resign
from any directorship and any similar position you hold with the Corporation or
any of its affiliates.  In addition, if the Executive is convicted or pleads
guilty or nolo contendre to a driving related violation or offense that does not
constitute Cause, which is demonstrably injurious to the Corporation or one its
affiliates, the Executive agrees to immediately resign from any directorship and
any similar position he holds with the Corporation or any of its affiliates.
 
(b)            Mutual Agreement. You and the Corporation may mutually agree in
writing at any time to terminate the engagement, and the terms of that
termination.
 
6.           Confidentiality. You shall hold for the benefit of the Corporation
and its affiliates and shall not disclose to others, copy, use, transmit,
reproduce, summarize, quote or make commercial, directly or indirectly, any
secret or confidential information, knowledge or data relating to the
Corporation and its affiliates and their businesses (including without
limitation information about their respective clients’ and customers’ and their
proprietary knowledge and trade secrets, software, technology, research, secret
data, customer lists, investor lists, business methods, business plans, training
materials, operating procedures or programs, pricing strategies, employee lists
and other business information) that you have obtained during your engagement by
the Corporation, provided, however, that the foregoing shall not apply to
information that is generally known to the public other than as a result of the
breach of this Agreement by you or one of your representatives (“Confidential
Information”). You acknowledge that such Confidential Information is
specialized, unique in nature and of great value to the Corporation and its
affiliates, and that such information gives the Corporation and its affiliates a
competitive advantage. Upon termination of your engagement hereunder, you shall
surrender immediately to the Corporation, except as specifically provided
otherwise herein, all Confidential Information and all other property of the
Corporation and its affiliates in your possession and all property made
available to you in connection with your engagement by the Corporation.
Notwithstanding the foregoing provisions, if you are required to disclose any
such Confidential Information pursuant to applicable law or a subpoena or court
order, you shall promptly notify the Corporation in writing of any such
requirement, unless you are requested not to do so by any governmental official
or are otherwise prohibited from doing so by law, so that the Corporation and/or
its affiliate(s) may seek an appropriate protective order or other appropriate
remedy. You shall reasonably cooperate with the Corporation (at the
Corporation’s expense) to obtain such protective order or other remedy.
 
7.           Enforcement Provisions. You and the Corporation understand and
agree to the following provisions regarding enforcement of this Agreement:
 
  (a)           Governing Law.  The Agreement is governed by and is to be
construed under the laws of North Carolina, without regard to conflict of laws
rules.  Any litigation concerning or related to this Agreement must be brought
exclusively in Mecklenburg County, North Carolina.  The parties irrevocably
consent to the jurisdiction of the courts in Mecklenburg County, North Carolina
(whether federal or state) for all such disputes and irrevocably consent to
service via nationally recognized overnight carrier, without limiting other
service methods allowed by applicable law.
 
  (b)           Equitable Remedies.  A breach of Section 6 of this Agreement
will cause the Corporation and/or its affiliates irreparable harm, and the
Corporation and its affiliates will therefore be entitled to (in addition to any
monetary damages available to them) issuance of immediate, as well as permanent,
injunctive relief restraining you, and each and every person and entity acting
in concert or participating with you, from initiation and/or continuation of
such breach, and also to cease paying you any further Consulting Fees, whether
or not accrued.
 
  (c)           No Waiver.  Failure of you or the Corporation or its affiliates
to demand strict compliance with any of the terms, covenants or conditions of
this Agreement shall not be deemed a waiver of such term, covenant or condition,
nor shall any waiver or relinquishment of any such term, covenant or condition
on any occasion or on multiple occasions be deemed a waiver or relinquishment of
such term, covenant or condition.
 
 
 

--------------------------------------------------------------------------------

 
 
(d)           Severability.  You and the Corporation further agree that the
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision or
provisions of this Agreement, which shall remain in full force and effect.
 
8.           Application of Policies.  During the Consulting Period, the general
policies and practices of the Corporation and its affiliates (as such policies
may exist from time to time) that are generally applicable to similarly situated
consultants of the Corporation will apply to you with the same force and effect.
 
9.           Taxes.  As a consultant and independent contractor of the
Corporation, you will be responsible for, and will duly and timely comply with,
all applicable laws relating to, the collection, payment, reporting and
remittance of any and all Federal, state or local taxes, charges or fees
(“Taxes”) resulting from the receipt of amounts described in this
Agreement.  Neither the Corporation nor any of its affiliates shall be liable
for any Taxes resulting from the receipt of amounts described in this Agreement,
or your failure to comply with applicable laws.
 
10.           Entire and Final Agreement. This Agreement, along with the written
agreements referenced herein, shall supersede any and all prior oral or written
representations, understandings and agreements of the parties with respect to
the matters addressed herein and contain the entire agreement of the parties
relating to the payments and benefits that you are entitled to receive as a
consultant.  No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement or the written
agreements referenced herein.  Once signed by the parties hereto, no provision
of this Agreement may be modified or amended unless agreed to in writing, signed
by you and a duly authorized officer of the Corporation.
 
11.            Assignment.  Neither this Agreement nor any of the rights,
obligations or interests arising hereunder may be assigned by you. Neither this
Agreement nor any of the rights, obligations or interests arising hereunder may
be assigned by the Corporation without your prior written consent, to a person
or entity other than an affiliate or parent entity of the Corporation or its
successors or assigns; provided, however, that, in the event of the merger,
consolidation, transfer, or sale of all or substantially all of the assets of
the Corporation with or to any other individual or entity, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Corporation hereunder.
 
12.           Section Headings.  The section headings contained in this
Agreement are inserted for purposes of convenience only, and shall not affect
the meaning or interpretation of this Agreement.
 
13.           Notices.  All notices required by this Agreement shall be sent in
writing and delivered by one party to the other by overnight express mail to the
following persons and address.
 
If to the Corporation:           Park Sterling Corporation
Attn: Chief Executive Officer
1043 E. Morehead Street, Suite 201
Charlotte, North Carolina 28204

If to you:  At the most recent address on file with the Corporation.
 
14.           Execution in Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which shall be considered an original
for all purposes.
 
15.           Release of Claims.  You, on behalf of yourself and your agents,
attorneys, heirs and assigns, hereby fully release and forever discharge, to the
fullest extent permitted by applicable law, the Corporation, the Bank, Citizens
South and their respective affiliated entities, as well as all of such entities’
respective present and former officers, directors, employees, agents,
predecessors, successors and assigns, from any and all claims, actions, damages
of all types, fines, interest, injunctive relief, attorneys’ fees, costs and
demands of any kind whatsoever, whether known or unknown, and whether under
tort, contract, statute or otherwise. Without limiting the generality of the
foregoing, this full and general release includes any claims under or related to
your employment with or separation from Citizen South, alleged discrimination or
harassment, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Employee Retirement Income Security Act, the Family and
Medical Leave Act, and any other federal, state or local statute, law,
regulation or constitutional provision.  For the avoidance of doubt, this
release shall not impair your rights under this Agreement, the Settlement
Agreement or the Noncompetition Agreement you are entering into with the
Corporation in connection with the transaction under the Merger
Agreement.  Notwithstanding anything herein to the contrary, this Release does
not cover any claims that may arise after the Effective Time of the merger of
Citizens South Banking Corporation with and into Park Sterling with Park
Sterling as the surviving corporation, pursuant to the merger agreement between
the parties dated May 13, 2012, as defined therein.
 
[Signature Page Follows]
 
 
 

--------------------------------------------------------------------------------

 
 

 

 
If the foregoing is satisfactory, please so indicate by signing and returning
one original copy of this consulting agreement to the Corporation, whereupon
this will constitute our agreement on the subject.
 

 
Sincerely,

/s/ JAMES C. CHERRY                                                      
James C. Cherry,
Chief Executive Officer 

Accepted and Agreed:

 
/s/ Kim S. Price
 
 
May 13, 2012
Date