Ex-10.4



 





Exhibit 10.4




AMENDED AND RESTATED

EMPLOYMENT AND NONCOMPETITION AGREEMENT




          This
AGREEMENT made this 1st day of May 2003 by and between GLL &
Associates, Inc., a North Carolina corporation (the “Company”), and Gary L.
Lackey (“Employee”) amends and restates in its entirety that certain Employment
and Noncompetition Agreement dated June 1, 1999 between the Company and the
Employee. In consideration of the mutual covenants expressed herein, the
parties agree for themselves, their heirs, successors and assigns, as follows:



W I T N E S S E T H:




          1. Employment. The Company shall continue to employ Employee, and
Employee continues his employment, upon the terms and conditions as set forth
in this Agreement.



          2. Term. Employee’s employment hereunder shall be for a term of 1094
days; provided, however, that unless and until notice of termination is given
by the Company or Employee pursuant to this Agreement (or notice is given by
the Company under Paragraph 3(a)(ii) below), the term of Employee’s employment
shall be automatically extended each day, so as to make the term constant at
1094 days.



          3. Termination.



          (a) Employee’s employment may be terminated by the Company, without
advance notice (except as provided below in Subclause (ii)), for Cause, which
shall include (i) the commission of a wrongful act or acts by Employee that
have or could have an adverse effect on the business, operations, financial
condition or reputation of the Company, as determined by the Company in its
discretion or (ii) the failure of Employee to perform diligently the duties
required of him under this Agreement, as determined by the Company in its
discretion, which failure has not been remedied, as determined by the Company
in its discretion, within 30 days after the Company has given notice of such
failure to Employee.



          (b) Employee’s employment under this Agreement may be terminated by the
Company without advance notice at any time for any reason and without cause.



          (c) In the event that Employee’s employment hereunder is terminated by the
Company other than for a reason set forth in Subparagraph (a) of this Paragraph
3, the Company shall, for the remainder of the current term of this Agreement,
pay to Employee his salary and bonus (as set forth in Paragraph 4) under this
Agreement through the end of its term; otherwise the Company shall have no
further payment obligations hereunder after such date of termination.



          (d) If Employee becomes “permanently disabled,” the Company may give
notice to Employee of such fact and upon such notice, his employment hereunder
shall be terminated. For purposes of this Agreement, Employee shall be deemed
“permanently disabled” if he suffers a physical or mental condition that
prevents him from performing the material and substantial duties of his
employment, as determined in accordance with the terms and conditions of the



 









 





long-term disability insurance plan maintained by the Company for the benefit
of Employee, or if Employee is not covered by such a plan, in accordance with
guidelines adopted for such circumstances by the Company’s Board of Directors
to be consistently applied among similarly situated employees, and such
disability has continued uninterrupted for six months. This Agreement shall
terminate upon the death of the Employee.



          (e) Employee may terminate his employment as follows: (i) at any time
upon 1094 day’s notice; (ii) at any time on or after September 1, 2010 upon one
year’s notice; and (iii) at any time Employee’s monthly base salary is reduced
below $10,000 or his incentive payment with respect to Paragraph 4(iii) below
is reduced below 10% of net operating income before taxes in excess of
$2,000,000 upon 1 year’s notice.



          4. Compensation. As compensation for all services rendered by Employee
pursuant to this Agreement, the Company shall pay Employee a monthly base
salary of $12,000 and a monthly incentive payment. The formula for the
calculation of the monthly incentive payment shall be determined annually by
the Company based on goals and/or targets established by the Company for the
calendar year. For the period beginning May 1, 2003 and ending on December 31,
2006, the incentive payment shall be calculated based on (i) 5% of the first
$500,000 of net operating income before income taxes, (ii) 10% of the net
operating income before taxes in excess of $500,000 and less than or equal to
$2,000,000, and (iii) 12% of net operating income before taxes in excess of
$2,000,000. Net operating income before taxes is solely comprised of such
income arising from the business of the Company and shall be calculated in
accordance with generally accepted accounting principles consistently applied.
All of such payments shall be made in accordance with the Company’s general
payroll policies then in effect.



          5. Benefits and Perquisites. During his term of employment hereunder,
Employee shall be entitled to fringe benefits in accordance with the Company’s
general policies. In addition, during the term of the Employee’s employment
hereunder, the Company shall provide the Employee with the following:



          (a) three weeks of vacation per year;



          (b) $600 monthly automobile allowance;



          (c) $185 per month for local country club dues, and expenses for usage of
the club as permitted by the Company in accordance with its general policies;



          (d) expenses for attendance at Company meetings and conventions as
permitted by the Company in its discretion; and



          (e) health benefits on a family coverage basis under the Company’s
standard health insurance plan.



          6. Duties. Employee shall perform such duties as are from time to time
assigned to him by the Board of Directors of the Company, which shall include
serving as the President of the Company, to be developed and managed in
accordance with the Company’s overall objectives, policies, principles and
practices.



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          7. Extent of Service. Employee shall devote his entire time, attention
and energies to the business of the Company and shall not during the term of
this Agreement and the employment hereunder engage in any other business
activity, whether such business activity is pursued for gain, profit or other
pecuniary advantage, without the prior written approval of the Board of
Directors of the Company.



          8. Restrictive Covenants.



          (a) In the course of Employee’s employment with the Company, Employee
will be provided with and have access to trade secrets of the Company,
including without limitation knowledge and information involving customer lists
and other confidential information and aspects of the business operations of
the Company upon which the business success and competitive advantage of the
Company depend. Employee acknowledges that such information, as well as all
other matters of Company practices, procedure and policy, are highly
confidential. Employee agrees that he will not use, divulge, publish or
otherwise reveal, either directly or through another, to any person, firm or
organization, during and after the term of his employment with the Company, any
such knowledge or information and shall retain such knowledge and information
in trust in a fiduciary capacity for the sole benefit of the Company, its
successors and assigns. Upon expiration or termination of his employment by
the Company, Employee agrees to return to the Company all documents (both
originals and copies), including without limitation customer lists, books and
records, form agreements, manuals, and other information (whether in
electronic, paper or other form) that come into his possession during, by
virtue of and in the course of his employment and that are in any way connected
with or related to the Company’s business.



          (b) Based upon Employee’s acknowledgment of the confidential nature and
unique value to the Company of the knowledge and information hereinabove
referred to, and for the valuable consideration provided herein, Employee
agrees (i) that during the term of his employment with the Company and for a
term of two (2) years after the termination of Employee’s employment with the
Company (or its successor or assigns), whether under this Agreement or
otherwise, Employee will not, without the prior written consent of the
Company’s Board of Directors, directly or indirectly, either as principal,
agent, manager, employee, owner (if the percentage of ownership exceeds one
percent (1%) of the net worth of the business), partner (general or limited),
director or officer, consultant or in any other capacity participate in any
business in competition with the Company or its affiliates (including Bank of
Granite Corporation and its subsidiaries) within 50 miles of any North Carolina
office of Bank of Granite Corporation or any of its subsidiaries, such
determination as to the geographic scope of this covenant to be made as of the
date of this Agreement (the “Territory”) and (ii) that for a period of two (2)
years following termination of Employee’s employment with the Company, whether
under this Agreement or otherwise, Employee shall not solicit business, in
competition with the Company, from any customer or potential customer contacted
by Employee during the term of his employment with the Company. Employee
further acknowledges that the actual, intended or reasonably contemplated
business activities and operations of the Company presently encompass the
Territory and that the restrictive covenants contained in this Paragraph are
fair and reasonable as applied to Employee within the Territory, and accurately
reflect Employee’s intention to be bound thereby.



          Notwithstanding the foregoing, the covenants in Paragraph 8(b) shall not
apply:



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          (i) upon the sale or transfer of all or substantially all of the assets of
Bank of Granite Corporation (except to an affiliate thereof) or upon the
occurrence of a transaction, including a sale or transfer of capital stock or a
merger involving Bank of Granite Corporation, after which a person or entity
(other than an entity controlled by or under common control with Bank of
Granite Corporation) acquires more than 50% of the voting capital stock of Bank
of Granite Corporation;



          (ii) to Employee’s ownership and passive, non-management, involvement in
the operations of and business conducted by Salem Mortgage Corporation
(including acting as chairman of the board of directors); provided, however,
that this exception shall only apply for so long as the business conducted by
Salem Mortgage Company consists of the dealing of Subprime Paper (as defined
below); and



          (iii) to Employee’s engagement and involvement in the dealing of Subprime
Paper (as defined below) upon the termination of Employee’s employment under
this Agreement other than for Cause (as defined in Paragraph 3).



          “Subprime Paper” means any loans that are not Fannie Mae or Freddie Mac
conforming loans or FHA/VA loans.



          (c) The provisions of this Paragraph 8 shall be specifically enforceable.



          9. This Agreement supersedes any and all prior understandings, agreements
and arrangements relating to and embodies the entire agreement and
understanding of the parties with respect to the subject matter hereof.



          10. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if delivered personally or
served by certified or registered mail, return receipt requested, to the
addresses listed below:



	 	 	 	 	 
	

	 	Company’s Address:
	 	Bank of Granite

P.O. Box 128

Granite Falls, North Carolina 28630

Attn: Chief Executive Officer
	 
	 	 	 	 
	

	 	Employee’s Address:
	 	Gary L. Lackey

GLL & Associates, Inc.

154 Charlois Boulevard (27103)

Post Office Box 25027

Winston-Salem, North Carolina 27114-5027







          11. Waiver of Breach. The waiver by the Company of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.



          12. Written Agreement. The terms of agreement incorporated in this
writing may not be changed orally, but only by an agreement in writing signed
by the parties against whom enforcement of any waiver, change, modification,
extension or discharge is sought.



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          13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.



          14. Survival. Any provision herein that by its nature and effect is to be
observed, performed or kept after the termination of the employment
relationship between the Company and Employee shall survive and be binding upon
and for the benefit of the parties after such termination until fully observed,
performed or kept.



          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.



	 	 	 	 	 
	 

	 	 	 	GLL & ASSOCIATES, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ Charles M. Snipes
	

	 	 	 	
 
	

	 	 	 	Charles M. Snipes, Chairman
	 
	 	 	 	 
	

	 	 	 	EMPLOYEE:
	 
	 	 	 	 
	

	 	 	 	/s/ Gary L. Lackey
	

	 	 	 	
 
	

	 	 	 	Gary L. Lackey








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