Document:

Exhibit 10.36

 Exhibit 10.36 
  
 CONSULTING AND NON-COMPETITION AGREEMENT 
  
 THIS CONSULTING AND NON-COMPETITION AGREEMENT (the “Agreement”), dated as of May 25, 2005, by and between Citizens
South Bank, a federally-chartered stock savings bank (the “Bank)”, and David C. McGuirt, an individual residing at 2542 Roundtable Road, Monroe, North Carolina 28110 (the “Consultant”). 
  
 RECITALS 
  
 WHEREAS, immediately prior to the Merger (as defined below), Consultant was the Chief Executive Officer of Trinity Bank;

  
 WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of May 25, 2005 (the “Merger Agreement”), by and among (a) Citizens South Banking Corporation, a federally-chartered stock holding company (b) the Bank, a wholly owned subsidiary of Citizens South Banking Corporation; and (c) Trinity Bank,
a North Carolina chartered bank, the following merger (“Merger’) shall occur: (i) Trinity Bank will merge with and into the Bank, with the Bank as the surviving entity; 
  
 WHEREAS, the Bank wishes to engage Consultant as a consultant to Citizens South, and Consultant is willing to be engaged as
a consultant to the Bank, upon the terms, covenants and conditions of this Agreement; 
  
 NOW, THEREFORE, the parties hereto, in consideration of the foregoing recitals and the mutual covenants and promises set forth herein, do hereby agree as follows: 
  
 Article 1 – DEFINITIONS 
  
 1.1 Definitions. As used in this Agreement, the following terms have
the following meanings. Capitalized terms used but not defined in this Agreement have the meanings given to such terms in the Merger Agreement. 
  
 (a) “Aggregate Fee” means the sum of all fees payable to Consultant during the Contract Term. 
  
 (b) “Beginning Date” means the first day of
the month immediately following the month in which the second anniversary of the effective date of the Merger occurs. 
  
 (c) “Consulting Services” has the meaning set forth in Section 2.1(b). 
  
 (d) “Competing Business” shall mean any
person, corporation, partnership, institution, association or other entity which provides, performs or engages in lending, depository or other business activities substantially similar to those provided, performed and engaged in (i) by the Bank
and/or Citizens South Banking Corporation, or (ii) by Trinity Bank prior to the Merger. 
  
 (e) “Confidential Information” shall mean information disclosed to Consultant or known by Consultant as a consequence of,
or through, his engagement with the 

 
Bank (including information conceived, originated, discovered, or developed in whole or in part by Consultant) of unique value to Citizens South and not
generally known in the relevant trade or industry, including, without limitation, information concerning the investment strategies, sales, sales volume, sales methods, sales proposals, marketing and selling strategies, pricing techniques, customers
and Prospective Customers, identity of key personnel in the employ of customers and Prospective Customers, computer programs, system documentation, special hardware, related software development, manuals, formulae, processes, methods, machines,
compositions, ideas, improvements, inventions, intellectual property or other confidential or proprietary information belonging to or relating to the affairs of Citizens South or a customer or Potential Customer of Citizens South. “Confidential
Information” shall not include (i) information in the public domain other than by virtue of a breach of this Agreement by Consultant, (ii) information rightfully received by Consultant from a third party without limitation on disclosure or
(iii) information generally made available by Citizens South, or a customer of Citizens South, to third parties without restriction on disclosure. 
  
 (f) “Contract Term” has the meaning set forth in Section 2.2 hereof. 
  
 (g) “Fee” has the meaning set forth in
Section 2.3 hereof. 
  
 (h) “Citizens
South” means, collectively, the Bank, Citizens South Banking Corporation and any direct or indirect Subsidiary of such entities. 
  
 (i) “Prospective Customer” means a person, entity, institution, organization with which Consultant, the Bank, has
actively pursued, via proposals, meetings or other written or face-to-face contact, the opportunity to perform services. 
  
 (j) “Restricted Territory” means all areas within (i) fifteen (15) miles of any existing branch of the Bank or (ii)
twenty-five (25) miles of any office for which the Bank, has filed an application for regulatory approval to establish an office prior to termination of Consultant’s engagement under Section 3.1 hereof. 
  
 (k) “Termination Date” means the date that
is two (2) years from the Beginning Date. 
  
 Article 2 –
SERVICES, COVENANTS AND COMPENSATION 
  
 2.1 Covenant Not
to Compete; Services and Duties. 
  
 (a)
Covenant Not to Compete. Consultant agrees that during the Contract Term, Consultant shall not, directly or indirectly, usurp any corporate opportunity of Citizens South or engage in any business which would detract from Consultant’s
ability to apply his best efforts to the performance of his duties hereunder. 
  
 (b) Consulting Services. Subject to and upon the terms and conditions contained in this Agreement, (i) the Bank hereby agrees to engage Consultant as an independent contractor and (ii) Consultant agrees to be
engaged by the Bank for the Contract Term, and to render the Consulting Services to the Bank. The Consulting Services shall consist of assisting the Bank as requested in connection with any personnel and business integration issues which 

  

 -2- 

 
may arise in connection with the Merger, and any other matters related to the conduct of the Bank’s businesses in Trinity Bank’s market area as the
Bank may reasonably request. Without limiting the generality of the foregoing, the Consulting Services will include assisting the Bank in the evaluation of business opportunities available to it in the market area formerly served by Trinity Bank and
elsewhere, assisting the Bank in establishing and fostering a positive relationship between the Bank and the communities served by Trinity Bank prior to the Merger, and introducing the Bank’s representatives to persons in the community served
by Trinity Bank prior to the Merger. Consultant shall use his best energies and abilities in the performance of the Consulting Services. 
  
 2.2 Contract Term. Consultant’s engagement pursuant to this Agreement, and Consultant’s obligation to comply with the provisions of
Article 4 hereof, shall commence as of the Beginning Date and shall terminate at 5:30 p.m., North Carolina time, on the Termination Date (the “Contract Term”). 
  
 2.3 Consideration. 
  

(a) Consideration for Consulting Services and Covenant Not to Compete. In consideration for the Consulting Services and for
Consultant’s agreement to comply with the provisions of Article 4 hereof, Consultant be paid no less than $141,000.00 (the “Fee”) per year for each full year during the Contract Term if Consultant Services are performed for the
entirety of the year. 
  
 (b) Expenses.
The Bank shall reimburse Consultant for all reasonable business expenses incurred by Consultant in connection with the performance of his duties in accordance with the Bank’s expense reimbursement policies for senior executive officers that
shall be communicated to Consultant in writing within thirty (30) days of entering into this Agreement. 
  
 2.4 Payment of Fee. Consultant shall be paid the Fee in equal monthly installments of $11,750.00, at the beginning of the month, for each month
during which Consultant renders Consulting Services. All payments provided in this Agreement shall be timely paid in cash or by check from the general funds of the Bank. 
  
 Article 3 – TERMINATION 
  

3.1 The Bank Termination. The Bank may terminate Consultant’s engagement as a consultant hereunder at any time and for any reason (or for
no reason) by delivering to him a written notice of such termination. Such written notice shall terminate Consultant’s engagement effective as of the date set forth in the notice and all obligations of the parties hereto under this Agreement
shall thereupon terminate, except (i) the obligations of Consultant under Article 4 hereof and (ii) the obligation of the Bank to pay Consultant the Aggregate Fee. Following the Bank’s termination of Consultant’s engagement hereunder,
neither the Bank nor Consultant will make any written or oral statement, representation or affirmation to the effect that Consultant is a representative of, or provides services to, the Bank. 
  
 3.2 Continuation of Consultant’s Obligations Under Article 4.
Consultant’s obligations under Article 4 shall continue notwithstanding termination of Consultant’s 

  

 -3- 

 
engagement hereunder (regardless of the reason for or the cause of such termination) pursuant to this Article 3. 
  
 Article 4 – COVENANTS AND AGREEMENTS OF CONSULTANT 
  
 4.1 Non-Disclosure of Confidential Information. 
  
 (a) Consultant recognizes and acknowledges that: (i) from
time to time during the course of Consultant’s engagement by the Bank it will be necessary for Consultant to acquire information which could include, in whole or in part, Confidential Information; (ii) the Confidential Information is the
property of Citizens South (and in some cases is the property of a customer of the Bank Affiliate to which it relates); (iii) the misappropriation or unauthorized use or disclosure of the Confidential Information would constitute a breach of trust
and could cause irreparable injury to Citizens South; and (iv) it is essential to the protection of the goodwill and to the maintenance of the competitive position of Citizens South that the Confidential Information be kept secret and that, except
as required in Consultant’s duties to the Bank, Consultant not disclose the Confidential Information to others or use the Confidential Information to Consultant’s own advantage or the advantage of others. 
  
 (b) Consultant agrees to hold and safeguard the Confidential
Information in trust for Citizens South, and its respective successors and assigns, and agrees that he shall not, without the prior written consent of the Bank, use to the Consultant’s own advantage or the advantage of others, misappropriate or
disclose or make available to anyone for use outside of Citizens South at any time during his engagement with the Bank hereunder or at any time thereafter, any of the Confidential Information, whether or not developed by Consultant, except as
required in the performance of Consultant’s duties to the Bank. 
  
 4.2 Return of Materials. Upon termination of Consultant’s engagement with the Bank for any reason whatsoever, including termination or expiration of this Agreement, Consultant shall promptly deliver to the Bank all
correspondence, drawings, manuals, letters, notes, notebooks, reports, flow-charts, programs, proposals and any documents concerning the customers and Prospective Customers of Citizens South, customer lists and lists of Prospective Customers and all
other paper and/or electronic documents, records or files, and all copies thereof, relating to the operations, products, processes, business or customers of Citizens South and, without limiting the foregoing, will promptly deliver to the Bank any
and all documents, electronic records or materials containing or constituting Confidential Information. 
  
 4.3 Restrictions on Competition. Consultant covenants and agrees that during the Contract Term and for a period of one (1) year thereafter,
Consultant shall not, in the Restricted Territory, engage, directly or indirectly, in any capacity whatsoever (whether as proprietor, partner, investor, shareholder, director, officer, employer, employee, consultant, independent contractor,
co-venturer, financier, agent, representative or otherwise), in any Competing Business; provided that the foregoing shall not prohibit Consultant from owning up to 5% of the outstanding capital stock of a public or non-public company that is
a Competing Business (but without otherwise participating in the activities of such company). 
  

 -4- 

 4.4 Restriction on Solicitations of Customers and Consultants. Consultant covenants and agrees
that during the Contract Term and for a period of one (1) year thereafter, Consultant shall not, directly or indirectly, (i) in any capacity whatsoever (whether as proprietor, partner, investor, shareholder, director, officer, employer, employee,
consultant, independent contractor, co-venturer, financier, agent, representatives or otherwise), solicit business from or perform services for any customer or Prospective Customer of Citizens South; or (ii) encourage, solicit, counsel or induce any
employee to leave the employ of Citizens South, assist any person, company or entity in any such conduct, or solicit for employment, employ, attempt to employ, or engage the services of any employee of Citizens South, or assist any person, company
or entity to engage in any such conduct. 
  
 Article 5 –
REPRESENTATIONS AND WARRANTIES OF CONSULTANT 
  
 5.1 No
Prior Agreements. Consultant represents and warrants to Citizens South that from the Beginning Date, he is not a party to or otherwise subject to or bound by the terms of any contract, agreement or understanding which in any manner would limit
or otherwise affect his ability to perform his obligations hereunder, including without limitation any contract, agreement or understanding containing terms and provisions similar in any manner to those contained in Article 4 hereof. Consultant has
been advised by Citizens South that at no time should Consultant divulge to or use for the benefit of Citizens South any trade secret or confidential or proprietary information of any previous employer, except for such trade secret or confidential
or proprietary information that has become the property of Citizens South in connection with the merger transactions contemplated by the Merger Agreement. 
  
 5.2 Consultant’s Abilities. Consultant represents and warrants to Citizens South that his experience and
capabilities are such that the provisions of Article 4 of this Agreement, and any enforcement of Article 4 by way of an injunction or similar equitable remedy, will not prevent him from earning a livelihood. 
  
 5.3 Opportunity for Review by Counsel. Consultant represents and
warrants to the Bank and Citizens South Banking Corporation that he has been provided with the opportunity to have this Agreement reviewed by Consultant’s competent counsel. 
  
 5.4 Reasonableness of Restrictions. Consultant agrees that: (i) the provisions of Article 4 of this Agreement are
necessary and reasonable to protect Citizens South’s Confidential Information, business interests and goodwill; (ii) the specific temporal, geographic and substantive provisions set forth in Article 4 are reasonable and necessary to protect
Citizens South’s business interests and goodwill; (iii) the consideration provided for Consultant under this Agreement in exchange for Consultant’s agreement to abide by the provisions of Article 4 is fair and adequate; and (iv) in the
event of any breach of any of the covenants set forth in Article 4, would suffer serious and irreparable harm and would not have an adequate remedy at law for such breach. 
  

 -5- 

 Article 6 – MISCELLANEOUS 
  
 6.1 Authorization to Modify Restrictions; Remedies. 
  
 (a) It is the intention of the parties that the provisions hereof shall be enforceable to the fullest extent
permissible under applicable law, but that the unenforceability (or modification to conform to such law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder thereof. If any provision or provisions hereof
shall be deemed invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to delete or modify, as necessary, the offending provision or provisions and to alter the bounds thereof in order to render it valid and
enforceable. 
  
 (b) In the event of a breach by
Consultant of the terms of this Agreement, the Bank shall be entitled, if it shall so select, to institute legal proceedings to obtain damages for any such breach, or to enforce the specific performance of this Agreement by Consultant and to enjoin
Consultant from any further violation of this Agreement and to exercise such remedies cumulatively or in conjunction with all other rights and remedies provided by law. Consultant acknowledges, however, that the remedies at law for any breach by him
of the provisions of this Agreement may be inadequate and that the Bank shall be entitled to injunctive relief against him in the event of any breach. 
  
 (c) Notwithstanding anything in this Agreement to the contrary, the Bank’s obligations to make any payments during the Contract Term
pursuant to Section 2 shall terminate if, before the date any such payment becomes due and payable, Consultant violates any of his obligations under Article 4. If a dispute exists, payments shall be held in escrow during the resolution of the
dispute. 
  
 6.2 Entire Agreement; Amendment. This
Agreement represents the entire agreement of the parties with respect to the subject matter hereof and may be amended only by a writing signed by each of them. 
  

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

  
 6.4 Arbitration. Except for an action by Citizens South
for temporary, preliminary or permanent injunctive relief, or for a similar equitable remedy, to restrain breach of this Agreement by Consultant, any dispute arising hereunder, including, but not limited to, matters of validity, interpretation, and
application, shall be determined exclusively by and through final and binding arbitration in North Carolina, each party hereto expressly and conclusively waiving its right to proceed to a judicial determination with respect to the merits of such
arbitrable matters. Such arbitration shall be conducted in accordance with any applicable rules of the American Arbitration Association then in effect before a panel of three arbitrators, one of whom shall be selected by Citizens South, the second
of whom shall be selected by Consultant and the third of whom shall be selected by the other two arbitrators. If for any reason arbitration under the rules of the American Arbitration Association cannot be initiated, the necessary arbitrator or
arbitrators shall be selected by a court of competent jurisdiction. It is expressly understood and agreed by the parties that a party may compel arbitration pursuant to this Section 6.4 through an 

  

 -6- 

 
action for specific performance and that any award entered by the arbitrators may be enforced, without further evidence or proceedings, in any court of
competent jurisdiction. 
  
 6.5 Agreement Binding;
Assignment. The obligations of both parties under this Agreement shall be binding on their respective heirs, executors, legal representative, successors and assigns and shall inure to the benefit of any heirs, executors, legal representatives,
successors and assigns of the parties hereto; provided, that the rights and duties of Citizens South and Consultant under this Agreement shall not be assigned without the prior written consent of the other party except that Citizens South may,
without the consent of Consultant, assign its rights and duties under this Agreement to any Citizens South Affiliate. 
  
 6.6 Counterparts; Section Headings; Facsimile. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same instrument. The section headings of this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any of the provisions hereof.
All signatures of signatories to this Agreement may be transmitted by facsimile, and such facsimile will, for all purposes, be deemed to be the original signature of such signatory whose signature it reproduces, and will be binding upon such
signatory. 
  
 6.7 Notices. All notices, requests, demands
and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed, registered mail, first class postage paid, return receipt requested, or any other delivery service with proof of delivery:

  
 if to the Bank, to: 
  
 519 South New Hope Road 
 P.O. Box 2249 
 Gastonia, North Carolina
28054-4040 
 Attention: Kim S. Price 
  
 with a copy to: 
  
 Luse Gorman Pomerenk & Schick, P.C. 
 5335
Wisconsin Avenue, N.W. 
 Suite 400 
 Washington, D.C. 20015 
 Telecopy: (202) 362-2902 
 Attention: John J. Gorman 
  
 if to Consultant, at the address set forth in the preamble or to such other address or to such other person as either party hereto shall have last designated by written notice to the other party. 
  
 CONSULTANT ACKNOWLEDGES THAT HE HAS READ AND UNDERSTANDS THE FOREGOING
PROVISIONS OF THIS AGREEMENT 
  

 -7- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be
executed by their duly authorized officers the day and year first above written. 
  

											
	 Witness:
	 	 	 	 Consultant:

			
	 /s/ Lynn H. Boyles
	 	 	 	 /s/ David C. McGuirt

	 	 	 	 	 	 	 David C. McGuirt

				
	 	 	 	 	 	 	 CITIZENS SOUTH BANK

					
	 	 	 	 	 	 	 By:
	 	 /s/ Kim S. Price

	 	 	 	 	 	 	 	 	 Name:
	 	 Kim S. Price

	 	 	 	 	 	 	 	 	 Title:
	 	 President / CEO

  

 -8-Exhibit 10.37

 Exhibit 10.37 
  
 TRINITY BANK 
  
 SUPPLEMENTAL AGREEMENT 
  
 This SUPPLEMENTAL AGREEMENT (this “Agreement”) is executed as of this 25th day of May 2005, by and between Trinity Bank, Citizens South Bank (the “Bank”) and David C. McGuirt (the “Executive”). 
  
 WHEREAS, the Executive is employed by Trinity Bank as its Chief
Executive Officer; and 
  
 WHEREAS, it is expected that
Trinity Bank will be acquired by and merged into the Bank (“Merger”) pursuant to that Agreement and Plan of Merger by and between Citizens South Banking Corporation, the Bank and Trinity Bank, dated May 25, 2005; and 
  
 WHEREAS, in accordance with the Employment Agreement entered into
between Trinity Bank and the Executive, dated November 2, 1999 (the “Employment Agreement”), Executive shall be entitled to a payment in the event of his termination of employment in connection with a Change in Control; and 
  
 WHEREAS, the Bank and Trinity Bank have agreed that the Merger shall
constitute a Change in Control and Executive shall be entitled to a payment in accordance with Section 10 of the Employment Agreement; and 
  
 WHEREAS, consistent with the requirements of Section 409A of the Internal Revenue Code (“Code”) and Treasury Notice 2005-01, Trinity Bank
and the Executive wish to amend and supplement the Employment Agreement by this Agreement to provide that the payment to which the Executive shall become entitled as a result of the Change in Control shall be deferred and paid commencing in 2010,
over a period of ten (10) years; and 
  
 WHEREAS, this
Supplemental Agreement shall also provide that at the effective time of the Merger, the Employment Agreement shall terminate and Trinity Bank and the Executive shall have no further obligations thereunder, the only continuing obligations being those
set forth in this Supplemental Agreement; and 
  
 WHEREAS,
none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of the Bank, is contemplated insofar as either of the Bank or any of its subsidiaries is concerned. 
  
 NOW THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows. 

 1. Section 10(e) of the Employment Agreement shall be rescinded. In lieu thereof, the payments required
by Section 10(c) of the Employment Agreement, as modified by Section 10(g) of the Employment Agreement (the “Payment”) shall be deferred and paid as follows: 
  
 (a) From the Effective Time until January 2010, the amount deferred shall be accrued on a general ledger
account at the Bank and shall be credited with interest annually at the applicable long-term applicable federal rate (“AFR”), as determined in accordance with Section 280G of the Internal Revenue Code (“Code”) at the Effective
Time. (In May 2005, the applicable long-term federal rate is 5.72%) 
  
 (b) Thereafter, the amount deferred shall be annuitized using the AFR and shall be paid in equal annual installments for a period of ten years, commencing on the first business day in January 2010 and continuing
through the first business day in January 2019. 
  
 (c) In the event of the Executive’s death prior to the final payment set forth herein, the remaining payments shall be made to the Executive’s beneficiary(ies) designated by the Executive in writing and attached to this
Supplemental Agreement as Exhibit A. 
  
 2. Termination of
Employment Agreement; Release and Waiver. Executive hereby agrees that at the Effective Time, the Employment Agreement between Trinity Bank and Executive shall terminate and be of no further force and effect. Upon the payment to Executive of the
amounts set forth in Paragraph 1 above, Executive releases, waives, discharges and acquits Trinity Bank, the Bank, and Citizens South Banking Corporation (collectively, the “Employer”), and their respective directors, officers, employees
and agents, and the heirs, successors and assigns of all of them, from any and all claims, known or unknown, which the Executive, his heirs, successors and assigns, have or might have arising from or relating to this Agreement and the payments set
forth in Paragraph 1 hereof. This Agreement and Release shall not affect Executive’s rights or benefits under any tax-qualified employee benefit plan of the Employer or under the Trinity Bank Supplemental Retirement Plan for David McGuirt
adopted as of 2003. 
  
 3. General Provisions. 

 
 (a) Heirs, Successors and Assigns. The terms of
this Supplemental Agreement shall be binding upon the parties hereto and their respective heirs, successors and assigns, including but not limited to the Employer. 
  
 (b) Final Agreement. This Supplemental Agreement represents the entire understanding of the parties
with respect to the subject matter hereof and thereof and, together, supersede all prior understandings, written or oral. The terms of this Supplemental Release may be changed, modified or discharged only by an instrument in writing signed by the
parties hereto. 
  
 (c) Governing Law.
This Supplemental Agreement shall be construed, enforced and interpreted in accordance with and governed by the laws of the State of North Carolina, without reference to its principles of conflicts of law. 
  
 (d) Counterparts. This Supplemental Agreement may be
executed in one or more counterparts, each of which counterpart, when so executed and delivered, shall be deemed 

  

 2 

 
an original and all of which counterparts, taken together, shall constitute but one and the same agreement. 
  
 (e) Severability. Any term or provision of this
Supplemental Agreement which is held to be invalid or unenforceable shall be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provision of this Supplemental
Agreement. 
  
 IN WITNESS WHEREOF, the parties hereto have
signed this Supplemental Agreement. 
  

					
	EXECUTIVE	 	 	 	 DATE: May 25, 2005

			
	 /s/ David C. McGuirt
	 	 	 	  
			
	TRINITY BANK	 	 	 	 DATE: May 25, 2005

			
	 /s/ Dennis Livingston
	 	 	 	  
			
	CITIZENS SOUTH BANK	 	 	 	 DATE: May 25, 2005

			
	 /s/ Kim S. Price
	 	 	 	  
	 President / CEO
	 	 	 	  

  

 3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]