Document:

EX-10.4 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

EXHIBIT 10.4

Form of Amended and Restated Employment Agreement between

Pension & Benefit Financial Services, Inc. and Ruth M. Roper

 

 

EXHIBIT 10.4

PENSION & BENEFIT FINANCIAL SERVICES, INC.

EMPLOYMENT AGREEMENT

(Amended and Restated as of January 1, 2006)

(Ruth M. Roper)

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of this first day of January,
2006 (the “Effective Date”), by and between Pension & Benefit Financial Services, Inc. (D/B/A
“Pension & Benefit Trust Company”), an Alabama corporation (the “Company”) and the wholly-owned
operating subsidiary of SouthFirst Bank, a federal savings association (the “Bank”), and Ruth M.
Roper (the “Employee”).

     WHEREAS, the Employee has heretofore been employed by the Company and is experienced in all
phases of the planning, designing, implementation, administration and duties required of a trustee,
of employee benefit plans; and

     WHEREAS, the parties desire by this writing to establish and to set forth the employment
relationship between the Company and the Employee.

     NOW, THEREFORE, it is AGREED as follows:

     1. Employment. The Employee is hereby employed as the Executive Vice President of the
Company. The Employee shall render such administrative and management services for the Company as
are currently rendered and as are customarily performed by persons situated in a similar executive
capacity. The Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. Further, the Employee may, from time to time, with
the approval of the Board of Directors of the Company (the “Board”), in her individual capacity as
a licensed insurance broker or insurance agent, enter into agreements with insurance companies and
insurance agencies (each an “Insurance Agreement”) and, thereby and thereunder, provide insurance
brokerage or insurance agency services and, further, may undertake to perform her obligations under
any such Insurance Agreement during Company business hours or otherwise; provided that,
during the term of this Agreement and thereafter, all compensation to which Employee is, or
becomes, entitled to receive under any such Insurance Agreement, for services rendered or insurance
products sold during the term of her employment with the Company, shall be for the benefit of the
Company and shall be either assigned to the Company (if permissible), paid over to the Company by
the Employee upon receipt, or, with explicit and particular approval of the Board, offset against
the Employee’s salary (as set forth in Section 2 of this Agreement). The Employee shall report on
a monthly basis, for so long as any Insurance Agreement is in effect, all such compensation earned
by Employee during the previous month. The Employee’s other duties shall be such as the Board may
from time to time reasonably direct, including normal duties as an officer of the Company. The
Employee’s obligations under this Section 1 shall survive termination of this Agreement.

1

 

     2. Compensation.

          (a) The Company agrees to pay the Employee during the term of this Agreement, a salary at the
rate of One Hundred Thousand Dollars ($100,000) per annum, payable in cash not less frequently than
monthly (the “Base Salary”), provided, however that the Company shall be entitled to offset
against the Employee’s salary, by up to $100,000 per annum, that amount of compensation which the
Employee receives under any Insurance Agreements, and which is neither assigned to the Company nor
paid over to the Company by the Employee upon receipt (the “Salary Offset”). If the Salary Offset
shall equal $100,000 for any one year, the Employee shall be obligated to assign or pay over to the
Company the excess of $100,000 of compensation received which otherwise would have been offset
against the Employee’s salary as a Salary Offset. For the purposes of Section 10 and 11 of this
Agreement, regardless of whether the Company offsets any amount against the Employee’s salary as a
Salary Offset, the Employee’s Base Salary shall equal $100,000. The Board shall review, not less
often than annually, the rate of the Employee’s salary, and, in its sole discretion, may decide to
increase her salary;

          (b) In further consideration of Employee’s services, Employee has, on April 11, 1997, received
Five Thousand Six Hundred Twenty-Three (5,623) shares (the “Compensatory Shares”) of $.01 par value
common stock (the “Common Stock”) of SouthFirst Bancshares, Inc., the parent and holding company of
the Bank (the “Corporation”), which shares vest in the Employee at a rate of one-fifteenth (1/15)
per year, beginning on the first anniversary of April 11, 1997, and upon each anniversary of that
date, until April 11, 2012, at which time the Compensatory Shares shall be fully vested; and

          (c) The Company further agrees to furnish the Employee a mutually acceptable automobile. The
cost of maintenance, fuel, insurance and upkeep to be borne by the Company.

     3. Earnings and Distribution of Compensatory Shares; Voting Rights.

          (a) Compensatory Shares; Forfeitures.

               (1) General Rules. The Compensatory Shares shall be earned and non-forfeitable by the
Employee at the rate of one-fifteenth per year until April 11, 2012.

               (2) Exception for Terminations Due to Death or Disability. Notwithstanding the
general rule contained in Section 3(a)(1) above, all Compensatory Shares held by the Employee at
the date of the termination of Employee’s service with the Company due to death, disability (as
determined by the Board), or the termination of her employment “without cause” under the provisions
of Section 10(d) of this Agreement, shall be deemed earned and fully vested as of such date and
shall be distributed as soon as practicable thereafter.

               (3) Exception for a Change in Control. Notwithstanding the general rule contained in
Section 3(a)(1) above, all Compensatory Shares held by the Employee shall be deemed to be
immediately 100% earned, fully vested and non-forfeitable in the event of a
“change in control” of the Company, the Bank or the Corporation (collectively and/or
separately,

2

 

as the context shall require, the “Relevant Corp”) and shall be distributed as soon as
practicable thereafter. For purposes of this paragraph, “change in control” shall mean the
occurrence of any one of the following events: (1) an increase in the ownership of, the holding
of, or the power to vote, by any person, or by any persons acting as a “group” (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934), the Relevant Corp’s voting stock, to an
amount which is more than 25% of the issued and outstanding shares thereof, (2) a change in the
ownership of, or possession of, the ability to control the election of a majority of the Relevant
Corp’s directors, (3) a change in the ownership of, or the possession of, the ability to exercise a
controlling influence over the management or policies of the Relevant Corp by any person, or by any
persons acting as a “group” within the meaning of Section 13(d) of the Securities Exchange Act of
1934 (except in the case of (1), (2) and (3) hereof, ownership or control of the Relevant Corp (or
its board of directors) by the Bank or by the Corporation, as the case may be, shall not constitute
a “change in control”), or (4) during any period of two consecutive years, individuals who at the
beginning of such period constitute the board of directors of the Relevant Corp. (the “Continuing
Directors”) cease for any reason to constitute at least two-thirds thereof, provided that any
individual whose election or nomination for election as a member of such board of directors was
approved by a vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. For purposes of this subparagraph only, the term “person” refers
to an individual (other that the Employee), individuals acting in concert or as a “group,” or a
corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not specifically listed herein.

               (4) Discretionary Acceleration of Vesting. In its sole and absolute discretion, the
Board may, at any time, with respect to the Employee, accelerate the vesting schedule according to
which the Employee’s Compensatory Shares become earned and becomes non-forfeitable by the Employee,
if the Board concludes that it is in the best interests of the Company to do so.

          (b) Accrual of Dividends. Whenever Compensatory Shares are distributed to the
Employee under Section 3(c) below, the Employee shall also be entitled to receive, with respect to
each Compensatory Share distributed, an amount equal to any cash dividends and a number of shares
of Common Stock equal to any stock dividends declared and paid with respect to a share of Common
Stock after the date the relevant Compensatory Shares were awarded.

          (c) Distribution of Compensatory Shares.

               (1) Timing of Distributions. Except as provided in Section 3(c)(2) below, the
Corporation shall distribute Compensatory Shares and accumulated cash from dividends and interest,
if any, to the Employee or her Beneficiary, as the case may be, as soon as practicable after they
have been earned. No fractional shares shall be distributed.

               (2) Form of Distribution. The Employee may file a written request with the
Corporation to have the Compensatory Shares distributed, as soon as practicable, in the form of a
transfer to the Employee of Common Stock subject to forfeiture of any portion thereof
which does not become vested under the applicable vesting provisions hereunder. In such
event,

3

 

the Corporation may, in its sole and absolute discretion, transfer to the Employee Common
Stock certificate(s) in the name of the Employee, whereupon the Employee shall become a stockholder
of the Corporation with respect to such Common Stock and shall have all the rights of a
stockholder, including but not limited to the right to receive all dividends paid on such shares
and the right to vote such shares. All shares of said Common Stock, which, pursuant to the
provisions of this Agreement, have not become vested on or before the Employee’s termination of
services with the Company, shall be forfeited by the Employee and returned to the Company or the
Corporation. The certificate(s) for the shares of the Common Stock distributed to the Employee
hereunder shall bear the following legend reflecting that the shares represented thereby are
subject to restrictions against transfer and to forfeiture, in accordance with this Agreement:

“The transferability of this certificate and the shares of stock
represented thereby are subject to the terms and conditions
(including forfeiture) contained in the Employee’s Employment
Agreement between Pension & Benefit Financial Services, Inc. and
Ruth M. Roper. Copies of such Employment Agreement are on file in
the offices of the Secretary of Pension & Benefit Financial
Services, Inc., 260 Commerce Street, Montgomery, Alabama 36104.”

     As the Employee earns the Common Stock, the Employee (or, in the event of the Employee’s
death, the legal representative of her estate, or if the personal representative of the Employee’s
estate shall have assigned the estate’s interest in the Common Stock, the person or persons to whom
her rights under such Common Stock shall have passed by assignment pursuant to her will or to the
laws of descent and distribution) may surrender the Common Stock certificates bearing the foregoing
legend, whereupon the Corporation shall cause such certificate(s) to be reissued without the
legend. If the Employee forfeits any or all of such Common Stock, the Employee shall, within
thirty (30) days after terminating employment, return to the Company or to the Corporation all
shares of the Common Stock which were forfeited and, further, pay to the Company or the Corporation
an amount equal to the dividends paid by the Corporation with respect to the shares of the
forfeited Common Stock.

               (3) Acquisition for Investment. Employee understands and acknowledges that the shares
of Common Stock which she may acquire pursuant to the terms of this Agreement are being acquired by
her solely for her own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the Securities Act of 1933
(the “Securities Act”).

               (4) Unregistered Securities. Employee further understands and acknowledges that the
shares of Common Stock which she may acquire under this Agreement have not been registered under
the Securities Act or the securities laws of any state, and will not at the time of issuance and
delivery of such shares as contemplated by the terms of this Agreement have been so registered, in
reliance upon certain exemptions from the registration and prospectus delivery requirements of the
Securities Act and such laws. Employee understands
that the shares of Common Stock so acquired by her must be held indefinitely, and that she
must

4

 

therefore bear the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act and any applicable state securities
laws, or is exempt from such registration to the satisfaction of counsel for the Corporation.
Employee further acknowledges that the availability of the exemptions described in the first
sentence of this Section depend upon, among other things, the bona fide nature of her investment
intent expressed herein, upon which the Company hereby expressly relies.

          (d) Voting of Compensatory Shares. All of the Compensatory Shares not otherwise
distributed to Employee hereunder shall be voted by the Company as directed by the Employee.

     4. Discretionary Bonuses. The Employee shall participate in an equitable manner with
all other senior management employees of the Company in discretionary bonuses that the Board may
award from time to time to the Company’s senior management employees. No other compensation
provided for in this Agreement shall be deemed a substitute for the Employee’s right to participate
in such discretionary bonuses.

     5. Participation in Retirement, Medical and Other Plans.

          (a) The Employee shall participate in any plan that the Company maintains for the benefit of
its employees if the plan relates to (i) pension, profit-sharing, or other retirement benefits,
(ii) medical insurance or the reimbursement of medical or dependent care expenses, or (iii) other
group benefits, including disability and life insurance plans.

          (b) The Employee shall participate in any fringe benefits which are or may become available to
the Company’s senior management employees, including for example: any stock option or incentive
compensation plans, club memberships, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this Agreement. The Employee
shall be reimbursed for all reasonable out-of-pocket business expenses which she shall incur in
connection with her services under this Agreement upon substantiation of such expenses in
accordance with the policies of the Company.

     6. Term. The Company hereby employs the Employee, and the Employee hereby accepts
such employment under this Agreement, for the period commencing on the Effective Date and ending 24
months thereafter (or such earlier date as is determined in accordance with Section 10).
Additionally, on each annual anniversary date from the Effective Date, this Agreement and the
Employee’s term of employment shall be extended for an additional one-year period beyond the then
effective expiration date, provided the Board determines in a duly adopted resolution that the
performance of the Employee has met the Board’s requirements and standards, and that this Agreement
shall be extended.

5

 

     7. Loyalty; Full Time and Attention.

          (a) During the period of her employment hereunder and except for illnesses, reasonable
vacation periods, and reasonable leaves of absence, the Employee shall devote all her full business
time, attention, skill, and efforts to the faithful performance of her duties hereunder; provided,
however, from time to time, Employee may serve on the boards of directors of, and hold any other
offices or positions in, companies or organizations, which will not present any conflict of
interest with the Company, the Bank or the Corporation or any of their respective subsidiaries or
affiliates, or unfavorably affect the performance of Employee’s duties pursuant to this Agreement,
or will not violate any applicable statute or regulation. “Full business time” is hereby defined
as that amount of time usually devoted to like companies by similarly situated executive officers.
During the term of her employment under this Agreement, the Employee shall not engage in any
business or activity contrary to the business affairs or interests of the Company, the Bank or the
Corporation, or be gainfully employed in any other position or job other than as provided above.

          (b) Nothing contained in this Paragraph 7 shall be deemed to prevent or limit the Employee’s
right to invest in the capital stock or other securities of any business dissimilar from that of
the Company, the Bank or the Corporation or, solely as a passive or minority investor, in any
business.

     8. Standards. The Employee shall perform her duties under this Agreement in
accordance with such reasonable standards as the Board may establish from time to time. The
Company will provide Employee with the working facilities and staff customary for similar
executives and necessary for her to perform her duties.

     9. Vacation and Sick Leave. The Employee shall be entitled, without loss of pay, to
absent herself voluntarily from the performance of her duties under this Agreement in accordance
with the terms set forth below, all such voluntary absences to count as vacation time; provided
that:

          (a) The Employee shall be entitled to an annual vacation in accordance with the policies that
the Board periodically establishes for senior management employees of the Company.

          (b) The Employee shall not receive any additional compensation from the Company on account of
her failure to take a vacation, and the Employee shall not accumulate unused vacation from one
fiscal year to the next, except in either case to the extent authorized by the Board.

          (c) In addition to the aforesaid paid vacations, the Employee shall be entitled without loss
of pay, to absent herself voluntarily from the performance of her employment obligations with the
Company for such additional periods of time and for such valid and legitimate reasons as the Board
may in its discretion approve. Further, the Board may grant to

6

 

the Employee a leave or leaves of absence, with or without pay, at such time or times and upon
such terms and conditions as the Board in its discretion may determine.

          (d) In addition, the Employee shall be entitled to an annual sick leave benefit as established
by the Board.

     10. Termination and Termination Pay. Subject to the provisions of Section 11 hereof,
the Employee’s employment hereunder may be terminated under the following circumstances:

          (a) Death. The Employee’s employment under this Agreement shall terminate upon her
death during the term of this Agreement, in which event the Employee’s estate shall be entitled to
receive the compensation due the Employee through the last day of the calendar month in which her
death occurred.

          (b) Disability. The Company may terminate the Employee’s employment after having
established, through a determination by the Board, the Employee’s Disability. For purposes of this
Agreement, “Disability” means a physical or mental infirmity which impairs the Employee’s ability
to substantially perform her duties under this Agreement and which results in the Employee becoming
eligible for long-term disability benefits under the Company’s long-term disability plan (or, if
the Company has no such plan in effect, which impairs the Employee’s ability to substantially
perform her duties under this Agreement for a period of one hundred eighty (180) consecutive days).
The Employee shall be entitled to the compensation and benefits provided for under this Agreement
for (i) any period during the term of this Agreement and prior to the establishment of the
Employee’s Disability during which the Employee is unable to work due to the physical or mental
infirmity, or (ii) any period of Disability which is prior to the Executive’s termination of
employment pursuant to this Section 10(b).

          (c) For Cause. The Board may, by written notice to the Employee, immediately
terminate her employment at any time, for Cause. The Employee shall have no right to receive
compensation or other benefits for any period after termination for Cause. Termination for “Cause”
shall mean termination because of, in the good faith determination of the Board, the Employee’s
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement. Notwithstanding the foregoing, the Employee
shall not be deemed to have been terminated for Cause unless there shall have been delivered to the
Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board (excluding the Employee if a member of the Board) at a meeting
of the Board called and held for the purpose (after reasonable notice to the Employee and an
opportunity for the Employee to be heard before the Board), finding that in the good faith opinion
of the Board the Employee was guilty of conduct set forth above in the second sentence of this
Subsection (c) and specifying the particulars thereof in detail.

7

 

          (d) Without Cause. Subject to the provisions of Section 11 hereof, the Board may, by
written notice to the Employee, immediately terminate her employment at any time for any reason;
provided that if such termination is for any reason other than pursuant to Sections 10 (a) (b) or
(c) above, the Employee shall be entitled to receive the following compensation and benefits: (i)
the base compensation provided pursuant to Section 2 hereof for a 12-month period, and (ii) the
average annual compensation less the base compensation for the 12-month period, based upon the
benefit levels substantially equal to those that the Company provided for the Employee at the date
of termination of employment. Said sum shall be paid, at the option of the Employee, either (I) in
periodic payments over the remaining term of this Agreement, as if the Employee’s employment had
not been terminated, or (II) in one lump sum within ten (10) days of such termination. The
Employee’s “average annual compensation” shall be the average of the total annual “compensation”
acquired by the Employee during each of the five (5) fiscal years (or the number of full fiscal
years of employment, if the Employee’s employment is less than five (5) years at the termination
thereof) immediately preceding the date of termination. The term “compensation” shall mean any
payment of money or provision of any other thing of value in consideration of employment,
including, without limitation, base compensation, health, life and disability benefits, bonuses,
pension and profit sharing plan, director fees or committee fees, fringe benefits and deferred
compensation accruals.

          (e) Voluntary Termination by Employee. Subject to the provisions of Section 11
hereof, the Employee may voluntarily terminate employment with the Company during the term of this
Agreement, upon at least 60 days’ prior written notice to the Board of Directors, in which case the
Employee shall receive only her compensation, vested rights and employee benefits accrued up to the
date of her termination.

     11. Change in Control.

          (a) Notwithstanding any provision herein to the contrary, if the Employee’s employment under
this Agreement is terminated by the Company, without the Employee’s prior written consent and for a
reason other than for Cause, death or disability, in connection with or within the period that is
twelve (12) months before to twenty-four (24) months after any change in control of the Company,
the Bank or the Corporation (collectively and/or separately, as the context shall require, the
“Relevant Corp”), the Employee shall be paid an amount equal to the difference between (i) the
product of 2.99 times her “base amount” as defined in Section 280G(b)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”), whereby, for purposes of this Section 11, the Employee’s
gross income for taxable years in the “base period” (as defined under Section 280G(d)(2) of the
Code) shall include compensation received under any Insurance Agreements against which the
Employee’s Base Salary was offset by a Salary Offset, and (ii) the sum of any other “parachute
payments” (as defined under Section 280G(b)(2) of the Code) that the Employee receives based on the
change in control and payments received under paragraph 10(d) if any. Said sum shall be paid in
one lump sum within ten (10) days of such termination. The term “change in control” shall have the
same meaning as contained in Section 3(a)(3) of this Agreement.

          (b) Notwithstanding any other provision of this Agreement to the contrary, the Employee may
voluntarily terminate her employment under this Agreement within twelve (12)

8

 

months following a change in control of the Relevant Corp, and the Employee shall thereupon be
entitled to receive the payment described in Section 11(a) of this Agreement, upon the occurrence
of any of the following events, or within ninety (90) days thereafter, which have not been
consented to in advance by the Employee in writing: (i) the requirement that the Employee move her
personal residence, or perform her principal executive functions, more than thirty-five (35) miles
from her primary office as of the date of the change in control; (ii) a material reduction in the
Employee’s base compensation as in effect on the date of the change in control, as the same may be
increased from time to time; (iii) the failure by the Company to continue to provide the Employee
with compensation and benefits provided for under this Agreement, as the same may be increased from
time to time, or with benefits substantially similar to those provided to her under any of the
employee benefit plans in which the Employee now or hereafter becomes a participant, or the taking
of any action by the Company which would directly or indirectly reduce any of such benefits or
deprive the Employee of any material fringe benefit enjoyed by her at the time of the change in
control; (iv) the assignment to the Employee of duties and responsibilities materially different
from those normally associated with her position as referenced at Section 1; (v) a failure to elect
or reelect the Employee to the board of directors of the Company, the Bank or the Corporation, as
the case may be, if the Employee is serving on such board of directors on the date of the change in
control; or (vi) a material diminution or reduction in the Employee’s responsibilities or authority
(including reporting responsibilities) in connection with her employment with the Company.

          (c) Notwithstanding any other provision of this Agreement to the contrary, the Employee may
voluntarily terminate her employment under this Agreement within twelve (12) months following a
change in control of the Company, the Bank or the Corporation, and the Employee shall thereupon be
entitled to receive the payment described in Section 11(a) of this Agreement.

          (d) Any payments made to the Employee 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.

          (e) In the event that any dispute arises between the Employee and the Company as to the terms
or interpretation of this Agreement, including this Section 11, the parties shall follow the
dispute resolution procedure specified in Section 16. The Employee shall be reimbursed for all
costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or
actions, provided that the Employee shall have obtained a final judgment by the arbitrator in favor
of the Employee. Such reimbursement shall be paid within ten (10) days of Employee’s furnishing to
the Company written evidence, which may be in the form, among other things, of a canceled check or
receipt, of any costs or expenses incurred by the Employee.

          (f) Any and all amounts paid to Employee under Section 11 shall be deemed to be paid in
satisfaction of, and shall therefore offset, any amounts to be paid to Employee pursuant to Section
10 hereunder, to the extent that any amounts paid under Section 11 are attributable to, or related
to, the base salary, or other compensation and amounts, paid to Employee under this Agreement.

9

 

     12. Requirements of Applicable Regulations of OTS.

          (a) The Company’s board of directors may terminate the Employee’s employment at any time, but
any termination by the Company’s board of directors, other than termination for cause, shall not
prejudice the Employee’s right to compensation or other benefits under this Agreement. The
Employee shall have no right to receive compensation or other benefits for any period after
termination for cause (as defined in Section 10(c) hereof).

          (b) If the Employee is suspended and/or temporarily prohibited from participating in the
conduct of the Company’s affairs by a notice served under section 8(e)(3) or (g)(1) of Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), the Company’s obligations under this
Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Company may in its discretion (i) pay the Employee
all or part of the compensation withheld while its obligations were suspended, and (ii) reinstate
(in whole or in part) any of its obligations which were suspended.

          (c) If the Employee is removed and/or permanently prohibited from participating in the conduct
of the Company’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)), all obligations of the Company under this
Agreement shall terminate as of the effective date of the order, but vested rights of the
contracting parties shall not be affected.

          (d) If the Company is in default (as defined in section 3(x)(1) of the Federal Deposit
Insurance Act), all obligations under this Agreement shall terminate as of the date of default, but
this Section 12(d) shall not affect any vested rights of the parties.

          (e) All obligations under this Agreement shall be terminated, except to the extent determined
that the continuation of this Agreement is necessary of the continued operation of the Company:

               (i) By the Director of the Office of Thrift Supervision (the “Director”) or his or her
designee, at the time the Federal Deposit Insurance Corporation or Resolution Trust Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under the authority
contained in 13(c) of the Federal Deposit Insurance Act; or

               (ii) By the Director or his or her designee, at the time the Director or his or her designee
approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank
is determined by the Director to be in an unsafe or unsound condition.

     Any rights of the Employee that have already vested, however, shall not be affected by such
action.

10

 

          (f) Should any provision of this Agreement give rise to a discrepancy or conflict with respect
to any applicable law or regulation, then the applicable law or regulation shall control the
relevant construction and operation of this Agreement.

     13. Non-Solicitation of Employees. Employee agrees that she will, for so long as she
is engaged hereunder, and for a period of three (3) years after termination of her employment,
refrain from recruiting or hiring, or attempting to recruit or hire, directly or by assisting
others, any other employee of the Company who is employed by the Company or any successor or
affiliate of the Company; provided, however, that the provisions of this Section 13 shall not
apply, and shall terminate, upon a termination of the Employee’s employment without cause, pursuant
to Section 10(d) hereof, or upon a “change in control” of the Company, the Bank and/or the
Corporation, as defined in, and contemplated by, Section 3(a)(3) hereof.

     14. No Mitigation. The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise, and no such
payment shall be offset or reduced by the amount of any compensation or benefits provided to the
Employee in any subsequent employment.

     15. Successors and Assigns.

          (a) This Agreement shall inure to the benefit of and be binding upon any corporate or other
successor of the Company which shall acquire, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the Company.

          (b) Since the Company is contracting for the unique and personal skills of the Employee, the
Employee shall be precluded from assigning or delegating her rights or duties hereunder without
first obtaining the written consent of the Company.

     16. Alternative Dispute Resolution. THE PARTIES TO THIS AGREEMENT HEREBY EXPRESS THAT
ALL DISPUTES, CONTROVERSIES OR CLAIMS OF ANY KIND AND NATURE BETWEEN THE PARTIES HERETO, ARISING
OUT OF OR IN ANY WAY RELATED TO THE WITHIN AGREEMENT, ITS INTERPRETATION, PERFORMANCE OR BREACH,
SHALL BE RESOLVED EXCLUSIVELY BY THE FOLLOWING ALTERNATIVE DISPUTE RESOLUTION MECHANISMS:

          (a) Negotiation — The parties hereto shall first engage in a good faith effort to negotiate
any such controversy or claim by communications between them. Said Negotiations may be oral or
written. To the extent that they are oral, they should be confirmed in writing.

          (b) Should the above-stated negotiations be unsuccessful, the parties shall engage in
mediation using one mediator pursuant to the American Arbitration Association Commercial Mediation
Rules, or such other mediation rule as the parties may otherwise agree to choose.

          (c) Should the above-stated mediation be unsuccessful, the parties shall agree to arbitrate
any such controversy or claim with the express understanding that this Agreement is

11

 

affected by interstate commerce in that the goods and services which are the subject matter of this
Agreement, pass through interstate commerce. Said arbitration shall be conducted pursuant to the
American Arbitration Association Commercial Arbitration Rules (the “Arbitration Rules”) or such
other arbitration rule as the parties may otherwise agree to choose.

          (d) The cost of the above-stated mediation shall be borne equally between the parties. The
cost of the above-stated arbitration shall be borne by the party against whom an award is issued
and in favor of the prevailing party. In either event, each party shall bear the cost of its own
attorney’s fees and costs.

     THE PARTIES UNDERSTAND AND AGREE (i) THAT EACH OF THEM IS WAIVING RIGHTS TO SEEK REMEDIES IN
COURT, INCLUDING THE RIGHT TO A JURY TRIAL; (ii) THAT PRE-ARBITRATION DISCOVERY IN ARBITRATION
PROCEEDINGS IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDINGS; AND (iii) THAT THE
ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND (iv) EITHER
PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS, IS STRICTLY LIMITED.

     The venue for mediation and/or arbitration under this paragraph shall be in the City of
Montgomery, State of Alabama.

     17. Amendments. No amendments or additions to this Agreement shall be binding unless
made in writing and signed by all of the parties, except as herein otherwise specifically provided.

     18. Applicable Law. Except to the extent preempted by Federal law, the laws of the
State of Alabama shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.

     19. Severability. 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.

     20. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement
between the parties hereto.

12

 

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

	 	 	 	 	 
	ATTEST:

	 	 	 	PENSION & BENEFIT FINANCIAL
SERVICES, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	Secretary

	 	 	 	J. Malcomb Massey

President and Chief Executive Officer
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Witness:

	 	 	 	Ruth M. Roper (“Employee”)
	 
	 	 	 	 
	 
 
	 	 	 	 

13Ex-10.1

 

EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (“Agreement”), is executed and delivered this ___day of May,
2006, effective as of April 22, 2006 (the “Effective Date”) by and between TIMCO AVIATION SERVICES,
INC., a Delaware corporation (the “Company”), and JOHN R. CAWTHRON (the “Employee”).

     In consideration of the mutual representations, warranties, covenants and agreements contained
in this Agreement and other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

     1. Employment.

          (a) Retention. The Company agrees to employ Employee as its Chairman of the Board and
Chief Executive Officer, and Employee agrees to accept such employment, subject to the terms and
conditions of this Agreement. Further, Employee shall serve pursuant to this Agreement as an
officer and director of each subsidiary of the Company.

          (b) Employment Period. The Employee commenced services as an employee of the Company
under this Agreement as of the Effective Date. This Agreement shall commence as of the Effective
Date and, unless earlier terminated pursuant to this Agreement or extended through agreement of the
parties, shall expire on April 30, 2008. Thereafter, this Agreement shall automatically renew for
consecutive one year periods unless terminated by either party by six months written notice prior
to the expiration of the initial term or any renewal term. For purposes of this Agreement, the
initial employment term and any renewal term thereof are collectively referred to herein as the
“Employment Period.”

          (c) Duties and Responsibilities. During the Employment Period, the Employee shall
serve as Chairman and Chief Executive Officer of the Company. In such role, Employee shall have
such authority and responsibility and perform such duties as are customary to Employee’s office and
as are necessary or appropriate to the business and operations of the Company, subject to the
direction of the Company’s Board of Directors (“Board”). During the Employment Period, the
Employee’s employment shall be full time. Employee shall perform his duties honestly, diligently,
in good faith and in the best interests of the Company, and Employee shall use his best efforts to
promote the interests of the Company.

          (d) Other Activities. Except upon the prior written consent of the Company, the
Employee, during the Employment Period, will not accept any other employment. The Employee shall
be permitted to serve in ventures such as passive real estate investments, serving on charitable
and civic boards and organizations, and similar activities, so long as such activities do not
materially interfere with or detract from the performance of Employee’s duties or constitute a
breach of any of the provisions contained in this Agreement.

     2. Compensation.

          (a) Base Salary. In consideration for the Employee’s services hereunder and the
restrictive covenants contained herein, the Employee shall be paid an annual base salary (“Salary”)
of $400,000 per annum from the Effective Date until the end of the Employment

 

 

Period. Payments hereunder shall be made in accordance with the Company’s customary payroll
practices. Notwithstanding the foregoing, Employee’s annual Salary may be increased at anytime and
from time to time to levels greater than the level set forth in the preceding sentence at the
discretion of the Compensation Committee (the “Committee”) of the Board of the Company to reflect
merit or other increases.

          (b) Bonus. In addition to the Salary, the Employee shall be eligible to receive an
annual bonus (“Bonus”) equal to 100% of the Employee’s Salary. The Bonus shall be based on the
achievement of corporate goals and objectives as established by the Committee or the Board. The
achievement of said goals and objectives shall be determined by the Committee or the Board. With
respect to any Fiscal Year during which the Employee is employed by the Company for less than the
entire Fiscal Year, the Bonus shall be prorated for the period during which the Employee was so
employed. Except as set forth above, all amounts of Bonus earned by Employee shall be payable
within thirty (30) days after completion of the audited financial statements for the previous
Fiscal Year. The term “Fiscal Year” as used herein shall mean each period of twelve (12) calendar
months commencing on January 1st of each calendar year during the Employment Period and expiring on
December 31st of such year.

          (c) Merit and Other Bonuses. Employee shall be entitled to such other bonuses,
payments and benefits as may be determined by the Committee or the Board, in their sole discretion.

          (d) Equity Incentives. Employee shall be eligible to receive grants of stock options,
restricted stock or other equity incentives, all at the discretion of the Committee or the Board.

          (e) Other Compensation Programs. The Employee shall be entitled to participate in
Company’s incentive and deferred compensation programs and such other programs as are established
and maintained generally for the benefit of Company’s employees or executive officers, subject to
the provisions of such plans or programs.

          (f) Vacations. The Employee shall be entitled to four weeks of vacation on an annual
basis. Employee shall be entitled to be reimbursed for any accrued and unused vacation time as of
the date he is no longer an employee of Company.

          (g) Other Benefits. During the term of this Agreement, the Employee shall also be
entitled to participate in any other health insurance programs, life insurance programs, disability
programs, stock option plans, bonus plans, pension plans and other fringe benefit plans and
programs as are from time to time established and maintained for the benefit of Company’s employees
or executive officers, subject to the provisions of such plans and programs.

          (h) Commuting Expenses. The Company shall provide, at its expense, a condominium in
which Employee may live while he is performing services hereunder in Greensboro, N.C., as well as a
vehicle for transportation when he is in Greensboro for purposes of his employment with the
Company. In addition, the Company will pay travel expenses from Waco, Texas to Greensboro and the
return trip, up to a maximum of 40 trips per calendar year.

2

 

          (i) Expenses. The Employee shall be reimbursed for all out-of-pocket expenses
reasonably incurred by him on behalf of or in connection with the business of the Company, pursuant
to the normal standards and guidelines followed from time to time by the Company.

          (j) Withholding. All payments made to the Employee hereunder shall be made net of any
applicable withholding for income taxes and the Employee’s share of FICA, FUTA or other taxes. The
Company shall withhold such amounts from such payments to the extent required by applicable law and
remit such amounts to the applicable governmental authorities in accordance with applicable law.

     3. Termination.

          (a) For Cause. The Company shall have the right to terminate this Agreement and to
discharge the Employee for Cause (as defined below), at any time during the term of this Agreement.
Termination for Cause shall mean, during the term of this Agreement, (i) Employee’s conduct that
would constitute under federal or state law either a felony or a misdemeanor involving moral
turpitude, or a determination by the Company’s Board of Directors, after consideration of all
available information and following the procedures set forth below, that Employee has willfully
violated Company policies or procedures involving discrimination, harassment, alcohol or substance
abuse, or work place violence causing material injury to the Company, (ii) Employee’s actions or
omissions that constitute fraud, dishonesty or gross misconduct, (iii) Employee’s knowing and
intentional breach of any fiduciary duty that causes material injury to the Company, and (iv)
Employee’s inability to perform his material duties, after reasonable notice and an opportunity to
resolve the issues, due to alcohol or other substance abuse. Any termination for Cause pursuant to
this Section shall be given to the Employee in writing and shall set forth in detail all acts or
omissions upon which the Company is relying to terminate the Employee for Cause.

          Upon any determination by the Company that Cause exists to terminate the Employee, the Company
shall cause a special meeting of the Board of Directors to be called and held at a time mutually
convenient to the Board of Directors and Employee, but in no event later than ten (10) business
days after Employee’s receipt of the notice that the Company intends to terminate the Employee for
Cause. Employee shall have the right to appear before such special meeting of the Board of
Directors with legal counsel of his choosing to refute such allegations and shall have a reasonable
period of time to cure any actions or omissions which provide the Company with a basis to terminate
the Employee for Cause (provided that such cure period shall not exceed 30 days). A majority of
the members of the Board of Directors must affirm that Cause exists to terminate the Employee. No
finding by the Board of Directors will prevent the Employee from contesting such determination
through appropriate legal proceedings provided that the Employee’s sole remedy shall be to sue for
damages, not reinstatement, and damages shall be limited to those that would be paid to the
Employee if he had been terminated without Cause. In the event the Company terminates the Employee
for Cause, the Company shall only be obligated to continue to pay in the ordinary and normal course
of its business to the Employee his Salary plus accrued but unused vacation time through the
termination date and the Company shall have no further obligations to Employee from and after the
date of termination.

3

 

          (b) Resignation by Employee. If the Employee shall resign or otherwise terminate his
employment with the Company at anytime during the term of this Agreement, the Employee shall only
be entitled to receive his accrued and unpaid Salary and vacation pay through the termination date,
and the Company shall have no further obligations under this Agreement from and after the date of
resignation.

          (c) Termination by Company Without Cause. At any time during the term of this
Agreement the Company shall have the right to terminate this Agreement and to discharge the
Employee without Cause effective upon delivery of written notice to the Employee. Upon any such
termination by the Company without Cause, or upon the Company’s failure to renew this Agreement,
the Company shall pay to the Employee all of the Employee’s accrued but unpaid Salary and vacation
pay through the date of termination, and thereafter, the Company: (i) shall continue to pay to the
Employee his Salary payable in accordance with Section 2(a) for a period of two (2) years, and (ii)
shall continue Employee’s health benefits under the Company’s then health insurance program(s) for
a period of two (2) years (or until Employee’s death or the date on which Employee becomes covered
by the health plan of a subsequent employer, to the extent that either of these events occurs
earlier). All payments made to the Employee pursuant to this Section 2(c) are collectively,
referred to herein as the “Severance Payment.” Other than the Severance Payment, the Company
shall have no further obligation to the Employee except for the obligations set forth in Section 14
of this Agreement after the date of such termination; provided, however, that the Employee shall
only be entitled to continuation of the Severance Payments as long as he is in compliance with the
provisions of Sections 7 and 8 of this Agreement.

          (d) Disability of the Employee. This Agreement may be terminated by the Company upon
the Disability of the Employee. “Disability” shall mean any mental or physical illness, condition,
disability or incapacity which prevents the Employee from reasonably discharging his duties and
responsibilities under this Agreement for a period of 180 consecutive days. In the event that any
disagreement or dispute shall arise between the Company and the Employee as to whether the Employee
suffers from any Disability, then, in such event, the Employee shall submit to the physical or
mental examination of a physician licensed under the laws of the State of North Carolina, who is
mutually agreeable to the Company and the Employee, and such physician shall determine whether the
Employee suffers from any Disability. In the absence of fraud or bad faith, the determination of
such physician shall be final and binding upon the Company and the Employee. The entire cost of
such examination shall be paid for solely by the Company. In the event the Company has purchased
Disability insurance for Employee, the Employee shall be deemed disabled if he is completely
(fully) disabled as defined by the terms of the Disability policy. In the event that at any time
during the term of this Agreement the Employee shall suffer a Disability and the Company terminates
the Employee’s employment for such Disability, the Company shall continue to pay to the Employee
his Salary, payable in accordance with Section 1(a) for three (3) months from the date of the
termination, when and as the same would have been due and payable hereunder but for such
termination, except that payment of the Salary in accordance with said paragraph shall be mitigated
to the extent payments are made to the Employee pursuant to disability insurance programs
maintained by the Company.

          (e) Death of the Employee. In the event of the death of Employee, the employment of
the Employee by the Company shall automatically terminate on the date of the

4

 

Employee’s death and the Company shall only be obligated to pay Employee’s estate Employee’s
accrued and unpaid Salary through the termination date plus accrued but unused vacation time
through the termination date and the Company shall have no further obligations to Employee from and
after the date of termination.

     4. Termination of Employment by Employee for Change of Control.

          (a) Termination Rights. Notwithstanding the provisions of Section 3 and Section 4 of
this Agreement, in the event that there shall occur a Change of Control (as defined below) of the
Company and within two years after such Change of Control the Employee’s employment hereunder is
terminated by the Company without Cause, or within such two year period the Employee terminates his
employment with the Company for Good Reason (as defined below), then the Company shall be required
to pay to the Employee all accrued but unpaid Salary and vacation pay through the date of
termination, plus the product of two (2) multiplied by the Employee’s then current Salary
(collectively, the foregoing consideration payable to the Employee shall be referred to herein as
the “Change in Control Payment”). The Change in Control Payment shall be made no later than 10
days after the Employee’s termination pursuant to this Section 4. To the extent that payments are
owed by the Company to the Employee pursuant to this Section 4, they shall be made in lieu of
payments pursuant to Section 3, and in no event shall the Company be required to make payments or
provide benefits to the Employee under both Section 3 and Section 4. Additionally, Employee shall
be entitled to receive the Change of Control Payment set forth above in the event that within one
year after the term of this Agreement, a Change of Control shall occur.

          (b) Change of Control of the Company Defined. For purposes of this Section 4, a
“Change of Control of the Company” shall be deemed to have occurred if:

               (i) Any “person” (as such term is defined in Sections 13(d)(3) and Section 14(d)(3) of the
Exchange Act), other than the Company, any majority owned subsidiary of the Company, any
compensation plan of the Company, any majority owned subsidiary of the Company or Lacy J. Harber
and his affiliates and/or heirs, becomes the “beneficial owner” (as such term is defined in Rule
13d 3 of the Exchange Act), directly or indirectly, of securities of the Company representing more
than 50% of the combined voting power of the Company; or

               (ii) Any “person” (as such term is defined in Sections 13(d)(3) and Section 14(d)(3) of the
Exchange Act), other than the Company, any majority owned subsidiary of the Company, any
compensation plan of the Company, any majority owned subsidiary of the Company or Lacy J. Harber
and his affiliates and/or heirs), becomes the “beneficial owner” (as such term is defined in Rule
13d 3 of the Exchange Act), directly or indirectly, of securities of the Company representing more
than 35% of the combined voting power of the Company provided: (A) such person or person are not
acting as a “group” (as such term is defined in Rule 13(d) under the Exchange Act) with respect to
the Company’s voting securities with Lacy J. Harber and his affiliates and/or heirs and (B) such
person or persons own Company securities with more of the combined voting power of the Company than
those held by Lacy J. Harber and his affiliates and/or heirs; or

               (iii) The shareholders of the Company approve (1) a reorganization, merger, or consolidation
with respect to which persons who were the shareholders of the

5

 

Company immediately prior to such reorganization, merger, or consolidation do not immediately
thereafter own more than 50% of the combined voting power entitled to vote generally in the
election of the directors of the reorganized, merged or consolidated entity; (2) a liquidation or
dissolution of the Company; or (3) the sale of all or substantially all of the assets of the
Company or of a subsidiary of the Company that accounts for more than 66 2/3% of the consolidated
revenues of the Company, but not including a reorganization, merger or consolidation of the
Company.

          (c) Good Reason Defined. For purposes of this Agreement, “Good Reason” shall mean a
termination by Employee of his employment with the Company after a Change of Control based upon a
significant demotion or material adverse change in Employee’s duties and responsibilities, unless
such change has been agreed to in writing by Employee.

     5. Successor To Company. The Company shall require any successor, whether direct or
indirect, to all or substantially all of the business, properties and assets of the Company whether
by purchase, merger, consolidation or otherwise, prior to or simultaneously with such purchase,
merger, consolidation or other acquisition to execute and to deliver to the Employee a written
instrument in form and in substance reasonably satisfactory to the Employee pursuant to which any
such successor shall agree to assume and to timely perform or to cause to be timely performed all
of the Company’s covenants, agreements and obligations set forth in this Agreement (a “Successor
Agreement”). The failure of the Company to cause any such successor to execute and deliver a
Successor Agreement to the Employee shall constitute a material breach of the provisions of this
Agreement by the Company.

     6. Restrictive Covenants. In consideration of his employment and the other benefits
arising under this Agreement, the Employee agrees that during the Employment Period and for a
period of two (2) years following the Employment Period, the Employee shall not directly or
indirectly:

          (a) alone or as a partner, joint venturer, officer, director, member, employee, consultant,
agent, independent contractor or stockholder of, or lender to, any company or business, engage in
any business which competes, directly or indirectly, with any business of the Company; provided,
however, that the beneficial ownership of less than one percent (1%) of the shares of stock of any
corporation having a class of equity securities actively traded on a national securities exchange
or over-the-counter market shall not be deemed, in and of itself, to violate the prohibitions of
this Section; or

          (b) for any reason, (i) induce any customer of the Company or any of its subsidiaries or
affiliates to patronize any business directly or indirectly in competition with the businesses
conducted by the Company or any of its subsidiaries or affiliates in any market in which the
Company or any of its subsidiaries or affiliates does business; (ii) canvass, solicit or accept
from any customer of the Company or any of its subsidiaries or affiliates any such competitive
business; or (iii) request or advise any customer or vendor of the Company or any of its
subsidiaries or affiliates to withdraw, curtail or cancel any such customer’s or vendor’s business
with the Company or any of its subsidiaries or affiliates; or

          (c) for any reason, employ, or knowingly permit any company or business directly or indirectly
controlled by him, to employ, any person who was employed by the

6

 

Company or any of its subsidiaries or affiliates at or within the prior six months, or in any
manner seek to induce any such person to leave his or her employment.

The provisions of this Section 6 shall apply to Employee whether or not Employee’s employment with
the Company has been terminated for Cause or without Cause and whether or not the Company is
required to pay Employee severance benefits under Section 3 of this Agreement. Notwithstanding the
foregoing, if this Agreement expires by its terms at the end of the Employment Period or if
Employee is terminated without Cause, then the provisions of this Section 6 shall only apply to
Employee if the Company provides Employee with all of the severance benefits which it would be
obligated to provide to him under Section 3(c) of this Agreement as if the Employee had been
terminated from his employment with the Company without Cause.

     7. Confidentiality. The Employee agrees that at all times during the term of this
Agreement and after the termination of employment for as long as such information remains
non-public information, the Employee shall (i) hold in confidence and refrain from disclosing to
any other party all information, whether written or oral, tangible or intangible, of a private,
secret, proprietary or confidential nature, of or concerning the Company or any of its subsidiaries
or affiliates and their business and operations, and all files, letters, memoranda, reports,
records, computer disks or other computer storage medium, data, models or any photographic or other
tangible materials containing such information (“Confidential Information”), including without
limitation, any sales, promotional or marketing plans, programs, techniques, practices or
strategies, any expansion plans (including existing and entry into new geographic and/or product
markets), and any customer lists, (ii) use the Confidential Information solely in connection with
his employment with the Company or any of its subsidiaries or affiliates and for no other purpose,
(iii) take all precautions necessary to ensure that the Confidential Information shall not be, or
be permitted to be, shown, copied or disclosed to third parties, without the prior written consent
of the Company or any of its subsidiaries or affiliates, and (iv) observe all security policies
implemented by the Company or any of its subsidiaries or affiliates from time to time with respect
to the Confidential Information. In the event that the Employee is ordered to disclose any
Confidential Information, whether in a legal or regulatory proceeding or otherwise, the Employee
shall provide the Company or any of its subsidiaries or affiliates with prompt notice of such
request or order so that the Company or any of its subsidiaries or affiliates may seek to prevent
disclosure. In addition to the foregoing the Employee shall not at any time libel, defame, ridicule
or otherwise disparage the Company.

     8. Specific Performance; Injunction. The parties agree and acknowledge that the
restrictions contained in Sections 6 and 7 are reasonable in scope and duration and are necessary
to protect the Company or any of its subsidiaries or affiliates. If any provision of Section 6 or
7 as applied to any party or to any circumstance is adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other circumstance or the validity or
enforceability of any other provision of this Agreement. If any such provision, or any part
thereof, is held to be unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have the power to reduce
the duration and/or area of such provision, and/or to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced. The Employee agrees
and acknowledges that the breach of Section 6 or 7 will cause irreparable injury to the Company or
any of its subsidiaries or affiliates and upon breach of any provision of

7

 

such Sections, the Company or any of its subsidiaries or affiliates shall be entitled to
injunctive relief, specific performance or other equitable relief, without being required to post a
bond; provided, however, that, this shall in no way limit any other remedies which the Company or
any of its subsidiaries or affiliates may have (including, without limitation, the right to seek
monetary damages).

     9. Notices. All notices, requests, demands, claims and other communications hereunder
shall be in writing and shall be deemed given if delivered by hand delivery, by certified or
registered mail (first class postage pre-paid), guaranteed overnight delivery or facsimile
transmission if such transmission is confirmed by delivery by certified or registered mail (first
class postage pre-paid) or guaranteed overnight delivery to, the following addresses and telecopy
numbers (or to such other addresses or telecopy numbers which such party shall designate in writing
to the other parties): (a) if to the Company, at its principal executive offices, addressed to the
President and Vice President, Legal, with a copy to Philip B. Schwartz, Esq., Akerman, Senterfitt &
Eidson, P.A., One Southeast Third Avenue, Miami, Florida 33156; and (b) if to the Employee, at the
address listed on the signature page hereto.

     10. Amendment; Waiver. This Agreement may not be modified, amended, or supplemented,
except by written instrument executed by all parties. No failure to exercise, and no delay in
exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder preclude the exercise of
any other right, power or privilege. No waiver of any breach of any provision shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any
waiver be implied from any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any other agreement shall be deemed
to be an extension of the time for performance of any other obligations or any other acts. The
rights and remedies of the parties under this Agreement are in addition to all other rights and
remedies, at law or equity, that they may have against each other.

     11. Assignment; Third Party Beneficiary. This Agreement, and the Employee’s rights
and obligations hereunder, may not be assigned or delegated by him. The Company may assign its
rights, and delegate its obligations, hereunder to any affiliate of the Company, or any successor
to the Company or its aviation services business, specifically including the restrictive covenants
set forth in Section 6 hereof. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and be binding upon its respective successors and assigns.

     12. Severability; Survival. In the event that any provision of this Agreement is
found to be void and unenforceable by a court of competent jurisdiction, then such unenforceable
provision shall be deemed modified so as to be enforceable (or if not subject to modification then
eliminated herefrom) to the extent necessary to permit the remaining provisions to be enforced in
accordance with the parties intention. The provisions of Sections 5, 6 and 7 will survive the
termination for any reason of the Employee’s relationship with the Company.

     13. Indemnification. The Company agrees to indemnify the Employee during the term and
after termination of this Agreement in accordance with the provisions of the Company’s certificate
of incorporation and bylaws and the Delaware General Corporation Law.

8

 

     14. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and the same instrument.

     15. Governing Law. This Agreement shall be construed in accordance with and governed
for all purposes by the laws of the State of North Carolina applicable to contracts executed and to
be wholly performed within such State.

     16. Entire Agreement. This Agreement contains the entire understanding of the parties
in respect of its subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter.

     17. Headings. The headings of Paragraphs and Sections are for convenience of
reference and are not part of this Agreement and shall not affect the interpretation of any of its
terms.

     18. Construction. This Agreement shall be construed as a whole according to its fair
meaning and not strictly for or against any party. The parties acknowledge that each of them has
reviewed this Agreement and has had the opportunity to have it reviewed by their respective
attorneys and that any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not apply in the interpretation of this Agreement.

     19. Resolution of Disputes. Any disputes arising under or in connection with this
Agreement shall be resolved by third party mediation of the dispute and, failing that, by binding
arbitration to be held in Greensboro, North Carolina in accordance with the rules and procedures of
the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.

[Signatures on Next Page]

9

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above
written.

	 	 	 	 	 
	 	TIMCO AVIATION SERVICES, INC.,

a Delaware corporation

 	 
	 	By:  	/s/
Ron Utecht 	 
	 	 	Ron Utecht, President 	 
	 	 	 	 
	 

	 	 	 	 	 	 	 
	 

	 	EMPLOYEE:	 	 	 	 
	 
	 	 	/s/
John R. Cawthron 	 	 
	 

	 	JOHN R. CAWTHRON	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address for Notices:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]