Document:

Exhibit 10.5

 

SECOND
AMENDED AND RESTATED

EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

THIS
SECOND AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (this
“Agreement”), dated as of December 31, 2008, by and between ROBERT R. HILL, JR.,  an individual
resident of Richland County, South Carolina (“Employee”), and SCBT FINANCIAL CORPORATION, a bank holding corporation
organized under the laws of South Carolina (the “Company”).

 

Background
Statement

 

The
board of directors of the Company (the “Board”) believes it is in the best
interest of the Company and its subsidiaries to restrict competition with the
Company and its subsidiaries by key management personnel upon termination of
their employment.  For the purpose of
establishing certain terms of Employee’s employment with the Company, the
Company and the Employee entered into an Employment Agreement on September 30,
1999.  On May 6, 2006, the Company
and Employee entered into an Amended and Restated Employment Agreement in order
to, among other things, extend the term of the original Employment Agreement
and provide additional benefits to Employee. 
The purpose of this second amendment and restatement is to further
revise the employment arrangement so that amounts of compensation potentially
due to Employee hereunder either comply with, or are exempt from, Internal
Revenue Code Section 409A.

 

Statement of
Agreement

 

In
consideration of the mutual covenants herein, Employee and the Company agree as
follows:

 

1.             Employment.  The Company agrees to employ Employee, and
Employee agrees to serve the Company, upon the terms and conditions set forth
in this Agreement.

 

2.             Term
of Employment.  The
term of Employee’s employment hereunder shall commence immediately upon the
date hereof and shall continue until the third anniversary of the date hereof,
unless terminated earlier as provided in Section 6 or 7 hereof (the “Term”);
provided, however, that on each anniversary date of this Agreement, the Term
shall be extended for one year (so that on each anniversary date the Term will
be three years) unless at least sixty (60) days prior to any such anniversary
date either party gives to the other notice in writing of non-renewal.

 

3.             Position
and Responsibilities. 
During the period of employment hereunder, Employee shall serve as, and
with the title, office, and authority of, President and Chief Executive Officer
of the Company and Chief Executive Officer of SCBT, N.A. (the “Bank”), and
shall report to the Board and the board of directors of the Bank (the “Bank
Board”).  Employee 

 

NOTICE

 

THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT TO
THE UNIFORM ARBITRATION ACT AS ADOPTED IN SOUTH CAROLINA AT SECTION 15-48-10
THROUGH SECTION 15-48-240, SOUTH CAROLINA CODE OF LAWS (1976, AS AMENDED).

 

 

shall have the duties, responsibilities, rights, power and authority as
President and Chief Executive Officer of the Company and Chief Executive
Officer of the Bank that may from time to time be delegated or assigned to him
by the Board and the Bank Board.

 

4.             Duties.  During the period of employment hereunder,
Employee shall devote substantially all of his business time, attention, skills
and efforts to the business of the Company and the Bank and the faithful
performance of his duties and responsibilities hereunder.  Employee shall be loyal to the Company and
the Bank and shall refrain from rendering any business services to any person
or entity other than the Company and its affiliates without the prior written
consent of the Company.  Employee may,
and is encouraged to, participate in such civic, charitable, and community
activities that do not substantially interfere with the performance of his
duties under this Agreement.  Employee
shall be permitted to make private investments so long as these investments do
not materially and adversely affect his employment hereunder.

 

5.             Compensation
and Benefits.  For
all services rendered by Employee to the Company hereunder, the Company shall
compensate Employee as follows:

 

(a)           Base
Salary.  During the
period of employment hereunder, the Company shall pay Employee an annual salary
(as increased by the Company from time to time in its sole discretion, the “Base
Salary”), which currently is $408,000 per year, subject to applicable federal
and state income and social security tax withholding requirements.  The Base Salary shall be payable in
accordance with the Company’s customary payroll practices.

 

(b)           Reimbursement
of Expenses.  The
Company shall pay or reimburse Employee for all reasonable travel and other
business related expenses incurred by him in performing his duties under this
Agreement.  Such expenses shall be
appropriately documented and submitted to the Company in accordance with the
Company’s policies and procedures as established from time to time.  The Company shall make all reimbursements to
Employee under this paragraph no later than March 15 of the year following
the year in which Employee incurred the related expense.

 

(c)           Vacation
and Sick Leave. 
Employee shall be provided with vacation and sick leave in accordance
with the Company’s policies and procedures for senior executives as established
from time to time.

 

(d)           Employee
Benefit Plans.  During
the period of employment hereunder, Employee shall be entitled to participate
in the employee benefit plans of the Company or its successors or assigns, as
presently in effect or as they may be modified or added to from time to time,
to the extent such benefit plans are provided to other senior executives.

 

(e)           Incentive
Bonus Plans.  During
the period of employment hereunder, Employee shall be entitled to participate
in the Company’s incentive-based bonus plans, applicable to his employment
position, in accordance with both the terms and conditions of such plans and
the Company’s policies and procedures as established from time to time.

 

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(f)            Other
Fringe Benefits. 
During the period of employment hereunder, the Company shall (i) provide
Employee with the use of an automobile, (ii) reimburse Employee for the
expense of his attendance at such meetings and conventions as may be approved
by the Board, and (iii) reimburse Employee for Country Club and such other
dues and fees as may be approved by the Board. 
The Company shall make all reimbursements to Employee under this
paragraph no later than March 15 of the year following the year in which
Employee incurred the related expense.

 

(g)           Total
Compensation.  Employee’s
Base Salary, the greater of Employee’s annual bonus for the fiscal year
preceding the fiscal year in which Employee’s employment terminates or the
average bonus for the five years preceding the year of termination, Employee’s
health, medical and dental insurance, and the fringe benefits provided in
Subsection (f) of this Section 5 (or a lump sum payment equal to the
value of such benefits without commutation to present value) are together
hereinafter referred to as Employee’s “Total Compensation.”  Total Compensation does not include any
payments under the Company’s long term incentive program paid in Company common
stock.

 

6.             Termination
of Employment.

 

(a)           Termination
Upon Death, Disability, or For Cause.  The Company shall have the right to terminate
Employee’s employment hereunder upon the death or Disability (as defined below)
of Employee or for Cause (as defined below). 
If Employee’s employment is terminated upon Employee’s death or
Disability, the Company will pay to or for the benefit of Employee or his
estate an amount equal to Employee’s Total Compensation for the twelve month
period preceding death or Disability in a lump sum, and in the case of
Disability the Company will continue Employee’s health, medical, and dental
insurance coverages for such twelve month period on the same basis as in effect
on the date of Disability.  If Employee’s
employment is terminated for Cause, the Company shall have no further
obligation to Employee under this Agreement. 
Termination for Disability or for Cause shall be effective immediately
or upon notice to Employee of such termination as may be determined by the
Board.  For purposes of this Agreement:

 

(i)            “Termination” means a termination
that qualifies as a “separation from service” under Treasury Regulation Section 1.409A-1(h) and
occurs when the level of bona fide services that Employee is performing for the
Company has decreased to a level equal to 20% or less of the average level of
services performed by Employee during the immediately preceding 36-month period
(or the full period of service with the Company, if less than 36 months).

 

(ii)           “Disability” means “disability” (as
defined under the Company’s disability insurance policy maintained for Bank
executives from time to time) suffered by Employee for a continuous period of
at least six months or any impairment of mind or body that is likely to result
in a “disability” of Employee for more than three months during any
twelve-month period.

 

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(iii)          “Cause” means: (A) the repeated
failure of Employee to perform his responsibilities and duties hereunder after
Employee has been given written notice by the Chairman of the Board specifying
in general the reasons Employee is failing to perform his duties and
responsibilities hereunder, (B) the commission of an act by Employee
constituting dishonesty or fraud against the Company or any of its affiliates; (C) the
conviction for or the entering of a guilty or no contest plea with respect to a
felony; (D) habitual absenteeism, reporting to work under the influence of
alcohol or unlawful use of controlled substances; or (E) the commission of
an act by Employee involving gross negligence or moral turpitude that brings
the Company or any of its affiliates into public disrepute or disgrace or
causes material harm to the customer relations, operations or business
prospects of the Company or any of its affiliates.

 

In the event of the
termination of Employee’s employment for Cause under this Section 6(a),
Employee shall be entitled only to the Base Salary earned through the date of
termination.

 

(b)           Termination
Without Cause.  The
Company shall have the right to terminate Employee’s employment at any time and
for any reason subject to the provisions of this Section 6(b).  In the event that the Company shall terminate
Employee’s employment for any reason other than as provided in Section 6(a),
the Company shall as its sole obligation hereunder continue to pay to
Employee his Total Compensation, subject to applicable federal and state
income and social security tax withholding requirements and in accordance with
the Company’s customary payroll practices, and shall continue Employee’s
health, medical and dental insurance and other benefits on the same basis as in
effect at the time of termination, in each case during the twelve month period
following termination.  In addition,
Employee shall receive compensation for two years for Employee’s covenant not
to compete with the Company as provided in Section 9(f) below.

 

(c)           Termination
by Employee for Good Reason.  Employee shall have the right to terminate
his employment hereunder for Good Reason. 
For purposes of this Agreement, “Good Reason” shall mean, without
Employee’s express written consent, the occurrence of any of the following
circumstances unless such circumstances are fully corrected within thirty days
after Employee notifies the Company in writing of the existence of such
circumstances as hereinafter provided:

 

(i)            the assignment to Employee of any
duties, functions or responsibilities other than those contemplated by Section 3
hereof or materially inconsistent with the position with the Company that
Employee held immediately prior to the assignment of such duties or
responsibilities or any adverse alteration in the nature or status of Employee’s
responsibilities or the condition of Employee’s employment from those
contemplated in Section 3 hereof;

 

(ii)           a material reduction by the Company
in Employee’s total compensation as in effect on the date hereof or as it may
be increased from time to time, except for across-the-board salary reductions
similarly affecting all management personnel of the Company;

 

4

 

(iii)          the relocation of the Company’s
headquarters to a location more than fifty miles from its current location in
Columbia, South Carolina, or the Company’s requiring Employee to be based
anywhere other than the Company’s offices at such location, except for required
travel on Company business;

 

(iv)          the failure by the Company to pay
Employee any portion of Employee’s compensation within the time guidelines
established pursuant to standard Company policies, or any other material breach
by the Company of any other material provision of this Agreement; or

 

(v)           the giving of notice by the Company
of non-renewal of this Agreement pursuant to Section 2 hereof, it being
acknowledged by the parties that such non-renewal would materially reduce the
compensation payable to Employee under certain circumstances.

 

Employee
shall notify the Company in writing that he believes that one or more of the
circumstances described above exists, and of his intention to terminate this
Agreement for Good Reason as a result thereof, within sixty days of the time
that he gains knowledge of such circumstances. 
Employee shall not deliver a notice of termination of this Agreement
until thirty days after he delivers the notice described in the preceding
sentence, and Employee may do so only if the circumstances described in such
notice have not been corrected in all material respects by the Company.

 

In the
event Employee terminates his employment pursuant to this Section 6(c) for
Good Reason, and subject to Section 7(a) below in the event of
termination within two years after a Change of Control, the Company shall
continue to pay to Employee his Total Compensation, subject to applicable
federal and state income and social security tax withholding and in accordance
with the Company’s customary payroll practices, and shall continue Employee’s
health, medical and dental insurance and other benefits on the same basis as in
effect at the time of such termination, in each case during the twelve month
period following termination of employment. 
In addition, Employee shall receive compensation for two years for
Employee’s covenant not to compete with the Company as provided in Section 9(f) below.

 

(d)           If
the amount otherwise payable to Employee under Section 6(b) or Section 6(c) during
the first six months following the date of his termination exceeds the
Threshold Amount (defined below), the Company shall pay during the first six
months following the date of termination a portion of the amount otherwise
payable under Section 6(b) or Section 6(c) in such
six-month period not exceeding the Threshold Amount, and pay in a single lump
sum on the first day after such six-month period any previously unpaid portion
otherwise payable during such six-month period. 
The “Threshold Amount” is an amount equal to two times the maximum
amount that may be taken into account under a qualified plan pursuant to
Internal Revenue Code Section 401(a)(17) for the year in which the
termination occurred.

 

(e)           Termination by Employee without Good Reason.  Employee
shall have the right at any time voluntarily to terminate his employment and
this Agreement, in which case (except as otherwise provided in Section 6(c) above)
Employee shall be entitled only to 

 

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Employee’s Base Salary through the date of termination, plus Employee’s
Total Compensation for two years for Employee’s covenant not to compete with
the Company as provided in Section 9(f) below.

 

(f)            Resignation from Boards.  Upon termination of Employee’s employment for
any reason, Employee by execution of this Agreement resigns as a member of the
Board and the Bank Board, such resignation to be effective immediately at the
time Employee’s employment terminates.

 

7.             Change
of Control.

 

(a)           If

 

(i)            a Change of Control (as defined
below) occurs during the Term of this Agreement or any extension thereof, and

 

(ii)           (A) Employee’s employment is
terminated in anticipation of a Change of Control, or (B) Employee is
employed by the Company or an affiliate thereof at the time such Change of
Control occurs, and at any time during the two-year period following
such Change of Control,

 

(1)           Employee is given notice of
non-renewal of this Agreement pursuant to Section 2 hereof, or his employment
is terminated by the Company or an affiliate or successor thereof for any
reason other than for death, Disability or Cause, or

 

(2)           Employee terminates his employment
during the Window Period, as hereinafter defined, for any reason other than
death or Disability, or Employee terminates his employment for Good Reason,

 

the Company (or its successors) shall pay Employee, or
his beneficiary in the event of his subsequent death, subject to applicable
federal and state income, social security and other employment tax withholding,
an amount (the “Change of Control Payment”) equal to .99 times Employee’s Total
Compensation in effect at the date of termination of employment.

 

The
Change of Control Payment is in lieu of and not in addition to any
payments provided for under Section 6 of this Agreement, but the Change of
Control Payment is in addition to the payment for Employee’s covenant
not to compete provided for under Section 9(f) of this
Agreement.  The Change of Control Payment
shall be paid in a lump sum at the time of termination without any reduction
for commutation to present value.

 

(b)           Notwithstanding
anything in this Agreement to the contrary, in the event it shall be determined
that any payment or distribution to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 7(b) (a “Payment”)) would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Employee with respect to such excise
tax (such 

 

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excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Employee
shall be entitled to receive (to the extent not paid directly by the Company as
withholding taxes) an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Employee of all taxes (including any interest or
penalties imposed with respect to such taxes) with respect to Payments
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.

 

All
determinations required to be made under this Section 7(b), including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by the accounting firm (the “Accounting Firm”) conducting the
audit of the Company at the time in question; provided, however, that the
Accounting Firm shall not determine that no Excise Tax is payable by the
Employee unless it delivers to the Employee a written opinion (the “Accounting
Opinion”) that failure to report the Excise Tax on the Employee’s applicable
federal income tax return would not result in the imposition of a negligence or
similar penalty.  In the event that the
Accounting Firm has served, at any time during the two years immediately
preceding a Change of Control, as accountant or auditor for the individual,
entity or group that is involved in effecting or has any material interest in a
Change of Control, the Employee shall appoint a nationally recognized
accounting firm that is reasonably acceptable to the Company to make the
determinations and perform the other functions specified in this Section 7(b) (which
accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Within fifteen days of the receipt of notice
from the Employee that there has been a Payment, or such earlier time as is
requested by the Company, the Accounting Firm shall make all determinations
required under this Section 7(b), shall provide to the Company and the
Employee a written report setting forth such determinations, together with
detailed supporting calculations, and, if the Accounting Firm determines that
no Excise Tax is payable, shall deliver the Accounting Opinion to the
Employee.  Any Gross-Up Payment, as
determined pursuant to this Section 7(b), shall be (i) paid by the
Company to taxing authorities to the extent required by applicable law and (ii) to
the extent not so paid and not required to be so paid in the future, paid by
the Company to the Employee at such times as the Accounting Firm determines that
the related tax payments by the Employee are due.  Subject to the remainder of this Section 7(b),
any determination by the Accounting Firm shall be binding upon the Company and
the Employee.  As a result of uncertainty
in the application of Section 4999 of the Internal Revenue Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Company
should have been made (“Underpayment”) consistent with the calculations
required to be made hereunder.  In the
event that it is ultimately determined in accordance with the procedures set
forth in this Section 7(b) that the Employee is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Employee.  Any Gross-Up Payment or Underpayment required
to be paid by the Company to Employee shall be paid by the end of Employee’s
taxable year following the taxable year in which Employee remits the related
taxes.

 

7

 

The
Employee shall notify the Company in writing of any claims by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than thirty
days after the Employee actually receives notice in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid; provided, however, that the failure of the
Employee to notify the Company of such claim (or to provide any required
information with respect thereto) shall not affect any rights granted to the
Employee under this Section 7(b) except to the extent that the
Company is materially prejudiced in the defense of any such claim as a direct
result of such failure.  The Employee
shall not pay such claim prior to the expiration of the thirty day period
following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due).  If the Company
notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:

 

(i)                  give the Company any
information reasonably requested relating to such claim;

 

(ii)                 take such action in connection
with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by the
Company and reasonably acceptable to the Employee;

 

(iii)                cooperate with the Company in
good faith to effectively contest such claim; and

 

(iv)                if the Company elects not to
assume and control the defense of such claim, permit the Company to participate
in any proceedings relating to such claim;

 

provided, however,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limiting the foregoing
provisions of this Section 7(b), the Company shall have the right, at its
sole option, to assume the defense of and control all proceedings in connection
with such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may either direct the Employee to pay
the tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Employee to pay such claim and sue for
a refund, the Company shall advance the amount of such payment to the Employee
on an interest-free basis, and shall indemnify and hold the Employee harmless,
on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance.  Furthermore, the 

 

8

 

Company’s right to
assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder, and the
Employee shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

 

During the lifetime of
Employee, if the Company is required to reimburse Employee under this Section 7(b) for
any legal fees or other expenses related to a Gross-Up Payment or Underpayment,
or to provide similar in-kind benefits, then (1) the expenses eligible for
reimbursement, or in-kind benefits provided, in a taxable year may not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in
any other taxable year and (2) the reimbursement shall be made on or
before the last day of Employee’s taxable year following the taxable year in
which the expense was incurred.  Employee’s
right to reimbursement or in-kind benefits under this Section 7(b) is
not subject to liquidation or exchange for another benefit.

 

If, after the receipt by
the Employee of an amount advanced by the Company pursuant to this Section 7(b),
the Employee becomes entitled to receive any refund with respect to such claim,
the Employee shall (subject to the Company’s complying with the requirements
hereof) promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto).

 

(c)           For
purposes of this Agreement, “Window Period” shall mean the thirty-day period
immediately following elapse of six months after the occurrence of any Change
of Control (as defined below).

 

(d)           For
purposes of this Agreement, “Change of Control” means the occurrence of
one of the following:

 

(i)                  any person acquires, or more
than one person acting as a group (as defined under Internal Revenue Code Section 409A)
acquires, directly or indirectly, of more than 50% of the total fair market
value or total voting power of the stock of the Company or the Bank or their
respective successors other than (A) with respect to the Bank and its
successors, the Company or any of its successors, (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company, (C) Employee
or a group of persons including Employee, and (D) an underwriter or group
of underwriters owning shares of common voting stock in connection with a bona
fide public offering of such shares and the sale of such shares to the public;

 

(ii)                 during a period of less than or
equal to 12 months (ending on the date of the most recent acquisition) any person
acquires, or more than one person or entity acting as a group (as defined under
Internal Revenue Code Section 409A) acquires, assets of the Company or the
Bank that have a total gross fair market value greater than or equal to 40% of
the total gross fair market value of all of the assets of the Company or the
Bank.  For this purpose, “gross fair
market value” of assets means the assets’ value determined without regard to
any liabilities associated with such assets; or

 

9

 

(iii)                a majority of the individuals
who constitute the Board as of the effective date of this Agreement is replaced
during any 12-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board before the date of such
appointment or election.

 

8.             Confidential Information.  Employee acknowledges that during, and as a
result of, Employee’s employment with the Company and the Bank, Employee will
acquire, be exposed to and have access to, material, data and information of
the Company and its affiliates and/or its customers, suppliers or clients that
is confidential or proprietary.  At all
times, both during and after the period of employment hereunder, Employee shall
keep and retain in confidence and shall not disclose, except as required in the
course of Employee’s employment with the Company and the Bank, to any person or
entity, or use for his own purposes, any of this proprietary or confidential
information.  For purposes of this Section 8,
such information shall include, but shall not be limited to:  (i) the
Company’s or the Bank’s standard operating procedures, processes, know-how and
technical and product information, any of which is of value to the Company or
the Bank and not generally known by the Company’s or the Bank’s competitors or
the public; (ii) all confidential information obtained from third parties
and customers concerning the business of the Company or its affiliates,
including any customer lists or data; and (iii) confidential business
information of the Company or its affiliates, including marketing and business
plans, strategies, projections, business opportunities, client lists, sales and
cost information and financial results and performance.  Such information shall not include
information that is disclosed pursuant to issuance of legal process or
regulatory action, information that is in the public domain, or information
disclosed to Employee by a person who has no duty to the Company or its
affiliates to keep the information confidential.  Employee acknowledges that the obligations
pertaining to the confidentiality and non-disclosure of information shall
remain in effect indefinitely, or until the Company has released any such
information into the public domain, in which case Employee’s obligation
hereunder shall cease with respect only to such information so released.

 

9.             Noncompetition.

 

(a)           Noncompetition.  Employee shall not take any of the following
actions during the applicable Noncompetition Period (as defined below):

 

(i)                  Become employed by (as an
officer, director, employee, consultant or otherwise), involved or engaged in,
or otherwise commercially interested in or affiliated with (other than as a
less than 5% equity owner of any corporation traded on any national, international
or regional stock exchange or in the over-the-counter market) any person or
entity that competes with the Company or an affiliate thereof (each, a “Company
Affiliate”) in the business of providing traditional banking services or other
services provided by the Company and its affiliates during the Term.

 

(ii)                 Solicit or attempt to solicit,
for competitive purposes, the business of any of the clients or customers of
any Company Affiliate, or otherwise induce such customers or clients or
prospective customers or clients to reduce, terminate, 

 

10

 

restrict or alter their
business relationship with any Company Affiliate in any fashion; or

 

(iii)                Induce or attempt to induce any
employee of any Company Affiliate to leave the Company for the purpose of
engaging in a business operation that is competitive with the Company.

 

(b)           Noncompetition
Period.  For purposes
of this Section 9 “Noncompetition Period” shall mean the period of
employment hereunder and the period commencing on the date of termination of
employment and ending twenty four months thereafter; provided, however, that in
the event Employee is terminated for Cause pursuant to the provisions of Section 6(e) hereof,
the Noncompetition Period shall mean the period commencing on the date of
termination and ending twelve months thereafter.

 

(c)           Geographic
Scope.  The restrictions on competition
and solicitation set forth in this Section 9
shall apply to any county in the State of South Carolina or in any other state
in which the Company or a Company Affiliate is conducting business operations
during the Noncompetition Period. 
However, the restrictions are intended to apply only with respect to
personal activities of Employee within any such county and shall not be deemed
to apply if Employee is employed by a corporation that has branch offices
within any such county but Employee does not personally work in or have any
business contacts with persons in such county.

 

(d)           Providing
Copy of Agreement. 
Employee shall provide a copy of this Agreement to any person or entity
with whom Employee interviews that is in competition with the Company during
the Noncompetition Period.

 

(e)           Obligations
Survive.  Employee’s
obligations under this Section 9
shall survive any termination of his employment with the Company.

 

(f)            Payment for Noncompetition.  In
addition to the payments to Employee provided by Sections 6(b) (the
Company’s termination of Employee without Cause), 6(c) (termination of
employment by Employee for Good Reason), 6(d) (Employee’s voluntary
termination of employment), or 7 (termination of employment after a Change of
Control), Employee shall be paid for not competing with the Company as above
provided Employee’s Total Compensation in effect at the time of termination of
his employment for a period of two years, such payment to be made in two equal
lump sum payments with no reduction for commutation to present value, with the
first payment of one-half the total amount to be paid to be made six months and
one day following the date of termination of Employee’s employment and the
second payment of one-half the total amount to be paid to be made on the first
anniversary of termination of Employee’s employment.

 

10.          Company’s
Right to Obtain an Injunction.  Employee acknowledges that the Company will
have no adequate means of protecting its rights under Sections 8
and 9 other than by securing an
injunction.  Accordingly, Employee agrees
that the Company is entitled to enforce this Agreement by obtaining a preliminary
and permanent injunction and any other appropriate equitable relief in any
court of competent jurisdiction. 
Employee acknowledges that the 

 

11

 

Company’s recovery of damages will not be an adequate means to redress
a breach of this Agreement.  Nothing
contained in this Section 10
shall prohibit the Company from obtaining any appropriate remedies in addition
to injunctive relief, including recovery of damages.

 

11.          Waiver
of Rights.  In
consideration of the employment offered hereunder and the payments made
pursuant to Section 5 and the other terms
of this Agreement, Employee acknowledges that the Employment Agreement dated September 30,
1999, between Employee and the Company is hereby terminated, and Employee
forever waives, releases and discharges the Company, any Company Affiliate, and
any of their subsidiaries, shareholders or affiliates and any of their
successors and assigns from any claims, rights and privileges under such
agreement.

 

12.          General
Provisions.

 

(a)           Entire
Agreement.  This
Agreement contains the entire understanding between the parties hereto relating
to the employment of Employee by the Company and supersedes any and all prior
employment or compensation agreements between the Company and Employee.

 

(b)           Assignability.  Neither this Agreement nor any right or
interest hereunder shall be assignable by Employee, his beneficiaries or legal
representatives, without the Company’s prior written consent; provided, however,
that nothing shall preclude (i) Employee from designating a beneficiary to
receive any benefit payable hereunder upon his death or Disability, or (ii) the
executors, administrators or other legal representatives of Employee or his
estate from assigning any rights hereunder to the person or persons entitled
thereunto.

 

(c)           Binding
Agreement.  This
Agreement shall be binding upon, and inure to the benefit of, Employee and the
Company and their permitted successors and assigns.

 

(d)           Amendment
of Agreement.  This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.

 

(e)           Insurance.  The Company, at its discretion, may apply for
and procure in its own name and for its own benefit, life insurance on Employee
in any amount or amounts considered advisable; and Employee shall have no
right, title or interest therein. 
Employee shall submit to any medical or other examination and execute
and deliver any applications or other instruments in writing as may be reasonably
necessary to obtain such insurance.

 

(f)            Severability.  If any provision contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained
herein.  If a court determines that this
Agreement or any covenant contained herein is unreasonable, void or
unenforceable, for any reason whatsoever, then in such event the parties hereto
agree that the duration, geographical or other limitation imposed herein should
be such as the court, or jury, as the case may be, determines to be fair and
reasonable, it being the intent of each of the parties hereto to be subject to
an agreement that is necessary for the protection of the legitimate interest 

 

12

 

of the Company and its successors or assigns and that is not unduly
harsh in curtailing the legitimate rights of the Employee.

 

(g)           Notices.  All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person (with respect to
the Company, to the Company’s secretary) or when mailed, if mailed by certified
mail, return receipt requested.  Notices
mailed shall be addressed, in the case of Employee, to his last known
residential address, and in the case of the Company, to its corporate
headquarters, attention of the Secretary, or to such other address as Employee
or the Company may designate in writing at any time or from time to time to the
other party in accordance with this Section.

 

(h)           Waiver.  No delay or omission by either party hereto
in exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any right,
power or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.  The
provisions of this Section 12(h) cannot
be waived except in writing signed by both parties.

 

(i)            Governing
Law.  This agreement
shall be governed and construed in accordance with the laws of the State of
South Carolina.

 

(j)            Arbitration.  This
contract is subject to arbitration pursuant to the Uniform Arbitration Act, as
adopted in South Carolina at Section 15-48-10 through Section 15-48-240,
South Carolina Code of Laws (1976, as amended). 
Any controversy or claim arising out of or relating to this
Agreement or the validity, interpretation, enforceability or breach thereof,
which is not settled by agreement among the parties, shall be settled by
arbitration in Columbia, South Carolina, in accordance with the Rules of
the American Arbitration Association, and judgment upon the award rendered in
such arbitration may be entered in any court having jurisdiction.  All expenses (including, without limitation,
legal fees and expenses) incurred by Employee in connection with, or in
prosecuting or defending, any claim or controversy arising out of or relating
to this Agreement following a Change of Control shall be paid by the Company,
unless Employee fails to prevail in any such claim or controversy and the
Company receives a written opinion of independent legal counsel, selected by
the Board of Directors of the Company, to the effect that such expenses were
not incurred by Employee in good faith. 
Pending any such determination, such expenses shall be paid by the
Company on a monthly basis, upon an undertaking by Employee to repay to the
Company amounts so advanced if Employee fails to prevail in any such claim or
controversy, and it should be thus determined that the expenses were not
incurred by Employee in good faith.

 

(k)           Internal
Revenue Code Section 409A.  The parties intend that each element of
compensation potentially payable to Employee hereunder either be exempt from,
or comply with, the requirements of Internal Revenue Code Section 409A,
and that any ambiguities in construction be interpreted to give effect to such
intent.  In no event shall any payment
under this Agreement be accelerated to a time earlier than that at which it
would otherwise have been paid, or delayed to a time later than that at which
it would otherwise have been paid, whether by amendment of this Agreement,
exercise of the Company’s discretion, or otherwise, except as permitted by
regulations issued under Internal Revenue Code Section 409A.

 

13

 

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

 

	
   

  	
  SCBT
  FINANCIAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Robert R. Horger

  
	
   

  	
   

  	
  Chairman of the
  Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Robert R.
  Hill, Jr.

  

 

14Exhibit 10.6

 

SECOND AMENDED AND RESTATED

EMPLOYMENT AND NON-COMPETITION AGREEMENT

 

THIS AGREEMENT, dated and effective this 31st day of
December, 2008, between SCBT Financial Corporation, which was formerly known as
First National Corporation, a bank holding company organized and existing under
the laws of the State of South Carolina (the “Company”), and John C. Pollok
(the “Employee”).

 

WHEREAS, the Company and Employee formerly entered into an Agreement
entitled Employment Agreement dated October 23, 2002 and thereafter
entered into an Amended and Restated Employment and Non-Competition Agreement
effective September 1, 2006; and

 

WHEREAS,
Company and Employee wish to terminate the Amended and Restated Employment and
Non-Competition Agreement effective September 1, 2006, and enter into this
Agreement under the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of mutual covenants contained herein,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties do mutually agree as follows:

 

1.             Employment.  The Company agrees to employ Employee, and
Employee agrees to serve the Company, upon the terms and conditions set forth
in this Agreement.

 

2.             Term. 
The term of this employment hereunder shall commence immediately upon
the date hereof and shall continue for a period of three year unless terminated
earlier as provided herein (the “Term”); provided, however, that on each
anniversary date of this Agreement, the Term shall be extended for one year (so
that on each anniversary date the Term will be three years) unless at least
sixty (60) days prior to any such anniversary date either party gives to the
other notice in writing of non-renewal. 
If one of the parties provides notice in accordance with this Section 2
but the parties do not enter into a new Agreement prior to the expiration of
the Term, the Employee’s employment shall become one of at-will.

 

3.             Position and Responsibilities.  During the period of employment hereunder,
Employee shall serve as Chief Operating Officer and Chief Financial Officer of
the Company and SCBT, N.A., a wholly-owned subsidiary of the Company (the “Bank”),
or in such other office and authority as may be designated by the Board of
Directors of the Company and SCBT, N.A.  Employee shall have the duties,
responsibilities, rights, power and authority that may be from time to time
delegated or assigned to him by the Board of Directors of the Company and the
Bank.

 

4.             Duties. 
During the period of employment hereunder, Employee shall devote all of
his business time, attention, skills and efforts to the business of the Company
and the faithful performance of his duties and responsibilities hereunder.  Employee shall be loyal to the

 

THIS AGREEMENT IS SUBJECT TO BINDING

ARBITRATION PURSUANT TO S. C. CODE §15-48-10 ET
SEQ.,

AS AMENDED FROM TIME TO TIME

 

 

Company and shall refrain from rendering any business services to any
person or entity other than the Company and its affiliates without the prior
written consent of the Company.  Employee
may, and is encouraged to participate in such civic, charitable, and community
activities that do not substantially interfere with the performance of his
duties under this Agreement.  Employee
shall be permitted to make private investments so long as these investments do
not materially and adversely affect his employment hereunder.

 

5.                                       Compensation and Benefits.  For all services rendered by Employee to the
Company hereunder, the Company shall compensate Employee as follows:

 

(a)           Base
Salary.  During the period of
employment hereunder, the Company shall pay Employee an annual salary (as
increased by the Company from time to time in its sole discretion, “Base Salary”),
which currently is $261,120.00 per year, subject to applicable federal and
state income and social security tax withholding requirements.  The Base Salary shall be payable in
accordance with the Company’s customary payroll practices.

 

(b)           Reimbursement of Expenses.  The Company shall pay or reimburse Employee
for all reasonable travel and other business related expenses incurred by him
in performing his duties under this Agreement. 
Such expenses shall be appropriately documented and submitted to the
Company in accordance with the Company’s policies and procedures as established
from time to time.  In no event, however, shall reimbursement of
expenses be paid later than the end of the year following the year in which the
expense was incurred.

 

(c)           Vacation and Sick Leave.  Employee shall be provided with vacation and
sick leave in accordance with the Company’s policies and procedures for senior
executives as established from time to time.

 

(d)           Employee Benefit Plans.  During the period of employment hereunder,
Employee shall be entitled to participate in the employee benefit plans of the
Company or its successors or assigns, as presently in effect or as they may be
modified or added to from time to time, to the extent such benefit plans are
provided to other similarly situated employees.

 

(e)           Incentive Bonus Plans.  During the period of employment hereunder,
Employee shall be entitled to participate in the Company’s incentive-based
bonus plans, applicable to his employment position, in accordance with both the
terms and conditions of such plans and the Company’s policies and procedures as
established and amended from time to time.

 

(f)            Other Fringe Benefits. During the period of
employment hereunder, the Company shall (i) provide Employee with the use
of an automobile, (ii) reimburse Employee for the expense of his
attendance at such meetings and conventions the Company requires him to attend,
and (iii) pay on behalf of Employee dues required to maintain membership
during his employment in a country club in Columbia, South Carolina to be
determined by Company and Employee.  Any and all reimbursements payable to the
Employee for attending meetings and conventions which Employee is required
by the Company to attend shall be paid no later than the end of the year
following the year in which the expense was incurred.

 

2

 

(g)           Total Compensation.  As used herein, the term Total Compensation
shall refer to the aggregate total of: (i) the Employee’s Base Salary at
the time the Employee’s employment terminates, (ii) the greater of the
Employee’s annual bonus for the fiscal year immediately preceding the fiscal
year in which Employee’s employment terminates or the average of the annual
bonus for the prior five fiscal years preceding termination, and (iii) the
amount the Company contributes towards Employee’s health and dental insurance
on a monthly basis as of the time the Employee’s employment terminates.

 

6.                                       Termination of Employment.

 

(a)                                  Termination Upon Death, Disability or For Cause.  The Company shall have the right to terminate
Employee’s employment hereunder upon the death or Disability (as defined below)
of Employee or for Cause (as defined below). 
If Employee’s employment is terminated due to death, Disability or for
Cause, the Company shall have no further obligation to Employee under this Agreement.  Termination for Disability or for Cause shall
be effective immediately or upon such notice to Employee of such termination as
may be determined by the Board of Directors. 
For the purpose of this Agreement:

 

(i)            “Disability” means “disability”
(as such term is defined under the Company’s disability insurance policy
maintained for Bank executives from time to time) suffered by Employee for a
continuous period of at least six months or any impairment of mind or body that
is likely to result in a “disability” of Employee for more than three months
during any twelve-month period.

 

(ii)           “Cause” means: (A) the repeated
failure of Employee to perform his responsibilities and duties hereunder; (B) the
commission of an act by Employee constituting dishonesty or fraud against the
Company or the Bank; (C) being charged with a felony; (D) habitual
absenteeism; (E) Employee is determined to have been on the job
while under the influence of alcohol, unauthorized or illegal drugs,
prescription drugs that have not been prescribed for the Employee, or other
substances that have the potential to impair the Employee’s judgment or
performance; (F) the commission of an act by Employee involving gross
negligence or moral turpitude that brings the Company or any of its affiliates
into public disrepute or disgrace or causes material harm to the customer
relations, operations or business prospects of the Company or its affiliates; (G) bringing
firearms or weapons into the workplace; (H) the Employee’s failure to
comply with policies, standards, and regulations of Company; (I) the Employee’s engagement in conduct which is
in material contravention of any federal, state or local law or ordinance other
than a minor offense which does not reflect or impact upon the Employer or Bank;
(J) the Employee’s engagement in conduct which is unbecoming to or
inconsistent with the duties and responsibilities of a member of management of
the Employer; or (K) the Employee engaging in sexual or other form of
illegal harassment.

 

In the event
of termination of Employee’s employment for death, Disability or Cause under
this Section 6(a), Employee shall be entitled only to the Base Salary
earned through the date of termination. 
In the case of the Employee’s death such payment shall be made to Employee’s
estate unless the Employee has directed otherwise in a writing directed to the
Company prior to 

 

3

 

his death.

 

(b)           Termination Without Cause.  The Company shall have the right to terminate
Employee’s employment at any time and for any reason subject to the provisions
of this Section 6(b).  In the event
that the Company shall terminate Employee’s employment for any reason other
than as provided in Section 6(a), the Company shall as its sole obligation
hereunder pay to Employee the Base Salary, subject to applicable federal and
state income and social security tax withholding requirements and in accordance
with the Company’s customary payroll practices, for the six month period
immediately following termination.  To the extent that any amount payable during
this six month period following termination exceeds the lesser of (1) two
times the employee’s annual rate of compensation for the taxable year before
the taxable year in which the termination occurs, or (2) two times
the then current compensation limit set for tax-qualified retirement plans
under Internal Revenue Code Section 401(a)(17), such excess
amount shall not be paid to Employee before the date that is six months
after the date of termination of the Employee (or, if earlier than the end of
the six month period, the date of death of the Employee).  In addition, for a period of six months, the Company shall
contribute towards Employee’s COBRA premium, i.e., pay the same monthly amount
for family coverage as it would if he were an active employee, if
Employee is covered under Company or
Bank’s health welfare benefit plan prior to the cessation of his employment and
elects to maintain coverage through COBRA.  Employee shall be responsible
for the remaining portion of the monthly COBRA premium during this period.  If Employee fails to make his portion of the
COBRA payment before the 10th of the month for which coverage is
sought (i.e. January 10th for January coverage), Company’s
obligation under this Section 6(b) to pay toward Employee’s monthly
COBRA premium shall cease.  If Employee
elects to extend coverage under Company or Bank’s health welfare benefit plan
after six months, Employee will be responsible for the payment of the entire
applicable COBRA premium.  If Employee
becomes eligible to enroll in another employer-sponsored health welfare benefit
plan prior to end of the six months, Company’s obligation under this Section 6(b) to
pay toward Employee’s monthly COBRA premium shall cease.  The Company’s obligations to make certain
payments to or on behalf of the Employee under this Section 6(b) is
expressly conditioned upon the Employee executing and returning to Company a
settlement agreement that will include a full waiver and release of all claims,
including potential claims known or unknown, against Company, Bank, their
officers, directors, agents, employees, etc.

 

(c)           Termination by Employee.  Employee shall have the right at any time
voluntarily to terminate his employment, upon 30 days written notice, in which
event Employee shall be entitled only to the Base Salary through the date of
termination.

 

7.                                       Change of Control.

 

(a)           If

 

(i)  a Change of Control (as defined below) occurs during the Term
of this Agreement or any extension thereof; and 

 

4

 

(ii)           (A) Employee’s employment is
terminated in anticipation of a Change in Control, or (B) Employee is
employed by the Company or an affiliate thereof at the time such Change of
Control occurs, and at anytime within one year after the Change in
Control occurs

 

(1)           the Employee is given notice of
non-renewal of this Agreement pursuant to Section 2 hereof, or his
employment is terminated by the Company or an affiliate or successor thereof
for any reason other than for death, Disability or Cause, or

 

(2)           Employee voluntarily
terminates his employment during the Window Period, as hereinafter defined, for
any reason other than death or Disability, or Employee terminates his
employment for Good Reason, as hereinafter defined,

 

the Company
(or its successors) shall pay to Employee, or his beneficiary in the event of
his subsequent death, subject to applicable federal and state income, social
security and other employment tax withholding, an amount (the “Change in Control
Payments”) equal to two and one-half (21⁄2) times the Employee’s Total
Compensation.

 

(b)           The
Change of Control Payment is in lieu of and not in addition to any
payments provided for under Section 6 of this Agreement.  Such amount shall be paid in two equal
payments each consisting of one-half the total Change of Control Payments with
the first payment to made immediately upon the cessation of employment and the
second to be made exactly one year later. 
To the extent that any amount
payable immediately upon the cessation of employment exceeds the
lesser of (1) two times the employee’s annual rate of compensation for the
taxable year before the taxable year in which the termination occurs, or (2) two
times the then current compensation limit set for tax-qualified retirement
plans under Internal Revenue Code Section 401(a)(17), such excess
amount shall not be paid to Employee before the date that is six months
after the date of termination of the Employee (or, if earlier than the end of
the six month period, the date of death of the Employee).  The Company or its successor’s obligations to make certain payments to
or on behalf of the Employee under this Section 7 is expressly conditioned
upon the Employee executing and returning to Company or its successor a settlement
agreement that will include a full waiver and release of all claims, including
potential claims known or unknown, against Company, Bank, successors, assigns,
their officers, directors, agents, employees, etc.

 

(c)           Notwithstanding
anything in this Agreement to the contrary, in the event it shall be determined
that any payment or distribution to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 7(c) (a “Payment”)) would be
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Employee with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Employee
shall be entitled to receive (to the extent not paid directly by the Company as
withholding taxes) an additional payment (a “Gross-Up 

 

5

 

Payment”).  As used herein, the term Gross-Up Payment refers to a payment to reimburse the Employee in
an amount equal to all or a designated portion of the Federal, state, local, or
foreign taxes imposed upon the Employee as a result of compensation paid or
made available to the Employee by the Company, including the amount of
additional taxes imposed on the Employee due to the Company’s payment of the
initial taxes on such compensation.  The
Gross-Up Payment shall be the amount such that after payment by the Employee of
all taxes (including any interest or penalties imposed with respect to such
taxes) with respect to Payments including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

 

All determinations required to be made under this Section 7(c),
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the accounting firm (the “Accounting Firm”)
conducting the audit of the Company at the time in question; provided, however,
that the Accounting Firm shall not determine that no Excise Tax is payable by
the Employee unless it delivers to the Employee a written opinion (the “Accounting
Opinion”) that failure to report the Excise Tax on the Employee’s applicable
federal income tax return would not result in the imposition of a negligence or
similar penalty.  In the event that the
Accounting Firm has served, at any time during the two years immediately
preceding a Change of Control, as accountant or auditor for the individual,
entity or group that is involved in effecting or has any material interest in a
Change of Control, the Employee shall appoint a nationally recognized
accounting firm that is reasonably acceptable to the Company to make the
determinations and perform the other functions specified in this Section 7(c) (which
accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Within fifteen days of the receipt of notice
from the Employee that there has been a Payment, or such earlier time as is
requested by the Company, the Accounting Firm shall make all determinations
required under this Section 7(c), shall provide to the Company and the
Employee a written report setting forth such determinations, together with
detailed supporting calculations, and, if the Accounting Firm determines that
no Excise Tax is payable, shall deliver the Accounting Opinion to the
Employee.  Any Gross-Up Payment, as
determined pursuant to this Section 7(c), shall be (i) paid by the
Company to taxing authorities to the extent required by applicable law and (ii) to
the extent not so paid and not required to be so paid in the future, paid by
the Company to the Employee at such times as the Accounting Firm determines
that the related tax payments by the Employee are due.  Subject to the remainder of this Section 7(c),
any determination by the Accounting Firm shall be binding upon the Company and
the Employee.  As a result of uncertainty
in the application of Section 4999 of the Internal Revenue Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Company
should have been made (“Underpayment”) consistent with the calculations
required to be made hereunder.  In the
event that it is ultimately determined in accordance with the procedures set
forth in this Section 7(c) that the Employee is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred, and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Employee.

 

6

 

The Employee shall notify the Company in writing of any claims by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than thirty
days after the Employee actually receives notice in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid; provided, however, that the failure of the
Employee to notify the Company of such claim (or to provide any required
information with respect thereto) shall not affect any rights granted to the
Employee under this Section 7(c) except to the extent that the
Company is materially prejudiced in the defense of any such claim as a direct
result of such failure.  The Employee
shall not pay such claim prior to the expiration of the thirty day period
following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due).  If the Company
notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:

 

(i)            give the Company any information
reasonably requested relating to such claim;

 

(ii)           take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney selected by the Company and
reasonably acceptable to the Employee;

 

(iii)          cooperate with the Company in good
faith to effectively contest such claim; and

 

(iv)          if the Company elects not to assume
and control the defense of such claim, permit the Company to participate in any
proceedings relating to such claim;

 

provided, however,
that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limiting the foregoing
provisions of this Section 7(b), the Company shall have the right, at its
sole option, to assume the defense of and control all proceedings in connection
with such contest, in which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may either direct the Employee to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and the
Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Employee on an
interest-free basis, and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance.  Furthermore, the Company’s right to assume
the defense of and control the contest shall be limited to issues with

 

7

 

respect to which a
Gross-Up Payment would be payable hereunder, and the Employee shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

 

If,
after the receipt by the Employee of an amount advanced by the Company pursuant
to this Section 7(c), the Employee becomes entitled to receive any refund
with respect to such claim, the Employee shall (subject to the Company’s
complying with the requirements hereof) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto).

 

In
no event shall the Gross-Up Payment be made payable, and payment actually be
made, by the Company any later than by the end of the Employee’s taxable
year next following the Employee’s taxable year in which the Employee remits
the related taxes.  In addition, any reimbursement by the Company of
expenses incurred due to a tax audit or litigation addressing the existence or
amount of a tax liability, whether Federal, state, local, or foreign, shall be
made payable and actually paid by the end of the Employee’s taxable year
following the Employee’s taxable year in which the taxes that are the subject
of the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, the end of the
Employee’s taxable year following the Employee’s taxable year in which the
audit is completed or there is a final and non-appealable settlement or other
resolution of the litigation.

 

(d)                                 For purposes of
this Section, “Window Period” shall mean the thirty-day period
immediately following elapse of six months after the occurrence of any Change
of Control (as defined below).

 

(e)                                  For purposes of
this Section, “Good Reason” shall mean, without Employee’s express
written consent the occurrence of any of the following circumstances unless
such circumstances are fully corrected within thirty days after Employee
notifies the company in writing of the existence of such circumstances as
hereinafter provided:

 

(i)                                     a material
diminution in the employee’s authority, duties, or responsibilities other than
those contemplated by Section 3 hereof or materially inconsistent with the
position with the Company that Employee held immediately prior to the
assignment of such duties or responsibilities or the condition of Employee’s
employment from those contemplated in Section 3 hereof;

 

(ii)                                  a material
diminution in the authority, duties, or responsibilities of the supervisor to
whom the Employee is required to report;

 

(iii)                               a material
diminution in the budget (if any) over which the Employee retains authority;

 

(iv)                              a reduction by
the Company in Employee’s total compensation as in effect on the date hereof or
as it may be increased from time to time, except for across-the-board salary
reductions similarly affecting all management personnel of the Company;

 

8

 

(v)                                 the relocation
of the Company’s headquarters to a location more than fifty miles from its
current location in Columbia, South Carolina, or the Company’s requiring
Employee to be based anywhere other than the Company’s offices at such
location, except for required travel on Company business;

 

(vi)                              the failure by
the Company to pay Employee any portion of Employee’s compensation within the
time guidelines established pursuant to standard Company policies, or any other
material breach by the Company of any other material provision of this
Agreement; or

 

(vii)                           any other
action or inaction that constitutes a material breach of the terms of the
Employee’s employment agreement.

 

Employee
shall notify the Company in writing that he believes that one or more of the
circumstances described above exists, and of his intention to terminate this
Agreement for Good Reason as a result thereof, within ninety days of the time
that he gains knowledge of such circumstances. 
Employee shall not deliver a notice of termination of this Agreement
until thirty days after he delivers the notice described in the preceding
sentence, and the Employee may do so only if the circumstances described in
such notice have not been corrected in all material respects by the Company.

 

(f)                                    For purposes of
this Agreement, “Change of Control” means the occurrence of one of the
following:

 

(i) A change in
ownership of the Company occurs on the date that any one person, or more than
one person acting as a group (as determined in Paragraph (i)(5)(v)(B) of
Treasury Regulation Section 1.409A-3), acquires ownership of more than 50% of the total fair market
value or total voting power of the Company or Bank other than (A) with
respect to the Bank, the Company (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, (C) employee or
a group of persons including Employee, and (D) an underwriter or group of
underwriters owning shares of common voting stock in connection with a bona
fide public offering of such shares and the sale of such shares to the public;

 

(ii) A change in the
effective control of the Company occurs on the date that (a) a person, or
more than one person acting as a group (as determined in Paragraph (i)(5)(v)(B) of
Treasury Regulation Section 1.409A-3), acquires
ownership (or having acquired during the 12-month period ending on the date
of his most recent acquisition) of 30%
or more of the total voting power of the stock of the Company or Bank, or (b) a
majority of the members of the Company’s board of directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Company’s board of directors prior to the
date of appointment or election, provided that the Company is a corporation for
which there is no majority shareholder.

 

9

 

(iii) A change in the
ownership of a substantial portion of the Company’s assets occurs on the date
that any one person, or more than one person acting as a group (as determined
in Paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3),
acquires (or having acquired during the 12-month period ending on the date
of his most recent acquisition) assets
from the Company that have a total gross fair market value equal to or more
than 40 percent of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition.  For purposes of this provision, gross fair
market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.

 

This
definition of Change in Control is intended to fully comply with the definition
of a change in control event as set forth in Treasury Regulation Section 1.409A-3(i)(5).

 

8.                                       Confidential Information.  Employee acknowledges that during, and as a
result of, Employee’s employment with the Company and the Bank, Employee will
acquire, be exposed to and have access to, material, data and information of
the Company and its affiliates and/or its customers or clients that is
confidential or proprietary.

 

(a)                                  Use and Maintenance of Confidential Information.  At
all time, both during and after the period of employment hereunder, Employee
shall keep and retain in confidence and shall not disclose, except as required
in the course of Employee’s employment with the Company and the Bank, to any
person or entity, or use for his own purposes, any of this proprietary or
confidential information.  For purposes
of this Section 8, such information shall include, but shall not be
limited to:  (i) the Company’s or
Bank’s standard operating procedures, processes, know-how and technical and
product information, any of which is of value to the Company or the Bank and
not generally known by the Company’s or Bank’s competitors or the public; (ii) all
confidential information obtained by the Company or the Bank from third parties
and customers concerning the business of the Company, including any customer
lists or data; and (iii) confidential business information of the Company
or its affiliates, including marketing and business plans, strategies,
projections, business opportunities, client lists, customer list, confidential
information by customers or clients, sales and cost information and financial
results and performance.  Employee
acknowledges that the obligations pertaining to the confidentiality and
non-disclosure of information shall remain in effect indefinitely, or until the
Company has released any such information into the public domain, in which case
Employee’s obligation hereunder shall cease with respect only to such
information so released.

 

(b)                                 Return of information.  The Employee acknowledges that all
information, the disclosure of which is prohibited by Section 8(a) above,
is of a confidential and proprietary character and of great value to the
Company and shall remain the exclusive property of the Company.  Upon the termination of employment with the
Company, the Employee agrees to immediately deliver to the Company all records,
calculations, memoranda, papers, data, lists, and documents of any description
which refer to or relate in any way to such information and to return to the
Company any of its equipment and property which may then be in the Employee’s
possession or under his control.

 

10

 

(c)                                  No Removal of Information.  Except as necessary to perform his job, under
no circumstances shall the Employee remove from the Company’s or Bank’s office
any of the Company’s books, records, documents, blueprints, customer lists, any
other stored information whether stored as paper, electronically or otherwise,
or any copies thereof, without the written permission of the Company; nor shall
the Employee make any copies of such books, records, documents, blueprints,
customer lists, or other stored information for use outside of the Company’s
offices except as specifically authorized by the Company or as necessary to
perform his job.

 

9.                                       Noncompetition.

 

(a)                                  Noncompetition.  Employee
shall not take any of the following actions during the applicable
Noncompetition Period (as defined below).

 

(i)                         Become employed
by (as an officer, director, employee, consultant or otherwise), involved or
engaged in, or otherwise commercially interested in or affiliated with (other
than as a less than 5% equity owner of any corporation traded on any national,
international or regional stock exchange or in the over-the-counter market) any
person or entity that competes with the Company or an affiliate thereof (each,
a “Company Affiliate”) in the business of providing traditional banking
services.   Further, Employee shall not
without the written permission of the Company become employed by (as an
officer, director, employee, consultant or otherwise), involved or engaged in,
or otherwise commercially interested in or affiliated with (other than as a
less than 5% equity owner of any corporation traded on any national,
international or regional stock exchange or in the over-the-counter market) any
person or entity that competes with the Company or an affiliate thereof (each,
a “Company Affiliate”) with respect to any of the other services provided by
the Company and its affiliates during the Term, but such permission by the
Company shall not be unreasonably denied.

 

(ii)                      Solicit or
attempt to solicit, for competitive purposes, the business of any of the
clients or customers of any Company Affiliate, or otherwise induce such
customers or clients or prospective customers or clients to reduce, terminate,
restrict or alter their business relationship with any Company Affiliate in any
fashion; or

 

(iii)                   Induce or attempt to induce
any employee of any Company Affiliate to leave the Company for the purpose of
engaging in a business operation that is competitive with the Company.

 

(b)                                 Noncompetition Period.  For the purpose of Section 9 of this
Section, “Noncompetition Period” shall mean the period of employment hereunder
and the period commencing on the date of termination of employment and ending
two years thereafter.  If employee is
found to have violated the covenants contained herein during the Noncompetition
Period such Noncompetition Period shall be extended for a period equal to the
amount of time 

 

11

 

the Employee is found to have been in non-compliance.

 

(c)                                  Geographic Scope.  The
restrictions on competition set forth in Section shall apply to any county
in the State of South Carolina or any county in any other state in which the
Company or Company Affiliate is conducting business operations during the
Noncompetition Period.  However, the
restrictions are intended to apply only with respect to personal activities of
Employee within any such county and shall not be deemed to apply if Employee is
employed by a corporation that has branch offices within any such county but
Employee does not personally work in or have any business contacts with persons
in such county.

 

(d)                                 Providing Copy of Agreement.  Employee shall provide a copy of this
Agreement to any person or entity with whom Employee interviews during the time
limitations set forth in this Section 9(a).

 

(e)                                  Employee’s Representation.  Employee represents that his experience and
capabilities are such that the provisions of this Section 9 will not
unreasonably limit him in earning a livelihood in the event that Employee’s
employment with the Company terminated.

 

(f)                                    Obligations Survive. 
Employee’s obligations under Sections 8 and 9 shall survive any
termination of his employment with the Company.

 

10.                                 Company’s Right to Obtain an Injunction.  Employee acknowledges that the Company will
have no adequate means of protecting its rights under Sections 8 and 9 other
than by securing an injunction.

 

(a)                                  Employee agrees
that the Company is entitled to enforce this Agreement by obtaining a
preliminary and permanent injunction and any other appropriate equitable relief
in any court of competent jurisdiction. 
Employee acknowledges that the Company’s recovery of damages will not be
an adequate means to redress a breach of this Agreement.  Nothing contained in this Section 10
shall prohibit the Company from obtaining any appropriate remedies in addition
to injunctive relief, including recovery of damages.

 

(b)                                 If a court
determines that this Agreement or any covenant contained herein is
unreasonable, void or unenforceable, for any reason whatsoever, then in such
event the parties hereto agree that the duration, geographical or other
limitation imposed herein should be such as the court determines to be fair and
reasonable, it being the intent of each of the parties hereto be subject to an
agreement that is necessary for the protection of the legitimate interest of
the Company and it successors or assigns and that is not unduly harsh in
curtaining the legitimate rights of the Employee.  If the court declines to define less broad
permissible restrictions, the parties agree to submit to binding arbitration
the permissible scope of reasonable restrictions, pursuant to the South
Carolina Uniform Arbitration Act, and agree that such arbitration result shall
be incorporated into this Agreement and that this Agreement will be amended
accordingly.

 

(c)                                  Employee agrees
that if he breaches any of the covenants set forth in this Agreement, Company
shall be entitled to setoff its damages against any amount owed by Company (or
successor) to Employee and to cease making payments to Company pending a 

 

12

 

resolution
of the controversy.  This Paragraph 10(c) shall
in no way limit the Company’s right to simultaneously seek and obtain injunctive
relief as set forth in Paragraph 10(a).

 

11.                                 Waiver of Rights.  In consideration of the employment offered
hereunder and the payments made pursuant to Section 5 and the other terms
of this Agreement, Employee acknowledges that Amended and Restated Employment
and Non-Competition Agreement effective September 1, 2006, between
Employee and the Company is hereby terminated, and Employee forever waives,
releases and discharges the Company, any Company Affiliate, and any of their
subsidiaries, shareholders or affiliates and any of their successors and
assigns from any claims, right and privileges under such agreement.

 

12.                                 General Provisions.

 

(a)                                  Entire
Agreement.  This
Agreement contains the entire understanding between the parties hereto relating
to the employment of Employee by the Company and supersedes any and all prior
employment or compensation agreements between the Company and Employee.

 

(b)                                 Assignability.  Neither
this Agreement nor any right or interest hereunder shall be assignable by
Employee, his beneficiaries or legal representatives, without the Company’s
prior written consent; provided, however, that nothing shall
preclude (i) Employee from designating a beneficiary to receive any
benefit payable hereunder upon his death, or (ii) the executors,
administrators or other legal representatives of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereunto.

 

(c)                                  Binding Agreement.  This
Agreement shall be binding upon, and inure to the benefit of, Employee and the
Company, and their respective successors and assigns.

 

(d)                                 Amendment of Agreement.  This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.

 

(e)                                  Insurance.  The
Company, at is discretion, may apply for and procure in its own name and for
its own benefit, life insurance on Employee in any amount or amounts considered
advisable; and Employee shall have no right, title or interest therein.  Employee shall submit to any medical or other
examination and execute and deliver any applications or other instruments in
writing as may be reasonably necessary to obtain such insurance.

 

(f)                                    Severability.  If any provision contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.

 

(g)                                 Notices.  All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person (with respect to
the Company, to the Company’s Secretary) or when mailed, if mailed by certified
mail, return receipt requested.  Notices
mailed 

 

13

 

shall be addressed, in the case of Employee, to his
last known residential address, and in the case of the Company, to its
corporate headquarters, attention of the Secretary, or to such other address as
Employee or the Company may designate in writing at any time or from time to
time to the other party in accordance with this Section.

 

(h)                                 Waiver.  No delay or
omission by either party hereto in exercising any right, power or privilege
hereunder shall impair such right, power or privilege, nor shall any single or
partial exercise of any right, power or privilege preclude any further exercise
thereof or the exercise of any other right, power or privilege.  The provisions of this Section 12(h) cannot
be waived except in writing signed by both parties.

 

(i)                                     Governing
Law.  This Agreement has been
executed and delivered in the State of South Carolina, and the laws of such
state shall govern its validity, interpretation, performance and
enforcement.  Further, this agreement is
governed by and is intended to comply with in all respects, or provide
exemptions from, the requirements of Internal Revenue Code Section 409A
and the regulations issued thereunder by the Secretary of the Treasury.

 

(j)                                     Arbitration.  With the exception of enforcement of the
covenants discussed in Sections 8 and 9 of this Agreement, all claims, disputes
and other matters in question between the Company, or it successors, and the
Employee including those arising out of, or relating to, this Agreement or the
validity, interpretation, enforceability or breach thereof, which are not
resolved by agreement of the parties, shall be subject to binding and mandatory
arbitration pursuant to the South Carolina Uniform Arbitration Act contained in
S.C. Code §§ 15-48-10 et  seq., as amended from time to time.  Such arbitration shall be held in Columbia,
South Carolina and shall be conducted in accordance with the rules of the
American Arbitration Association, and judgment upon such award may be entered
in any court having jurisdiction. The expenses of the arbitration shall be
borne by the Company or its successor; however, each party shall bear his or
its own costs and attorney’s fees unless a statutory cause of action provides
for such an award.

 

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

 

	
   

  	
  SCBT FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  Robert R. Hill, Jr.

  
	
   

  	
  Its:
  CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John
  C. Pollok

  

 

14

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