EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into as of
December 31, 1997 by and between Xxxxx X. Xxxxx, a resident of the State of
Georgia ("Employee") and First Community Bank of Southwest Georgia, a Georgia
corporation ("FCB").
W I T N E S S E T H:
WHEREAS, Employee is currently an executive officer of Bainbridge National
Bank, a wholly owned subsidiary of Investors Financial Corp. ("Investors").
Investors has entered into an Agreement and Plan of Merger (the "Merger
Agreement") with FCB's parent corporation, PAB Bankshares, Inc. ("PAB"),
pursuant to which Investors will be merged with and into PAB (the "Merger"), and
subsequently Bainbridge National Bank will be merged with FCB;
WHEREAS, upon consummation of the Merger, FCB and Employee each desire to
enter into an employment relationship with the other; and
WHEREAS, FCB and Employee each deem it necessary and desirable, for their
mutual protection, to execute a written document setting forth the terms and
conditions of said relationship;
NOW, THEREFORE, in consideration of the employment of Employee by FCB, of
the premises and the mutual promises and covenants contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment and Duties.
FCB hereby employs Employee to serve as Chief Executive Officer and to
perform such duties and responsibilities as customarily performed by persons
acting in such capacity. During the terms of this Agreement, Employee will
devote his full time and effort to his duties hereunder. Employee will report
directly to the Chief Executive Officer of PAB.
2. Term. Subject to the provisions of Sections 12 and 14 of this
Agreement, the period of Employee's employment under this Agreement shall be
deemed to have commenced as
of the effective date of the Merger, and shall continue for a period of thirty-
six (36) calendar months thereafter, and any extensions thereafter, unless the
Merger is not consummated or the Employee dies before the end of such thirty-six
(36) months, in which case the period of employment shall continue until the end
of the month of such death. The said thirty-six (36) month period of employment
shall automatically be extended for additional twelve (12) full calendar months
terms without further action by the parties, commencing on the third anniversary
of this Agreement and each anniversary thereafter. No such automatic extension
shall occur if either party shall, at least ninety (90) days prior to any said
anniversary, have served written notice upon the other of its intention that
this Agreement shall not be so extended.
3. Compensation.
For all services to be rendered by Employee during the term of this
Agreement, FCB agrees to pay Employee an annual base salary equal to his
compensation paid by Bainbridge National Bank as of the date of the Merger
Agreement subject to normal annual increase through the Effective Date of the
Merger (the "Base Salary"), less normal withholdings, payable in equal monthly
or more frequent installments as are customary under FCB's payroll practices
from time to time. FCB's Board of Directors shall review Employee's Base Salary
annually and in its sole discretion may adjust Employee's Base Salary from year
to year, but any reduction during the term of this Agreement shall not occur
unless a similar reduction is made in the base salary of all similarly situated
officers of PAB. The annual compensation (regardless of form), by the Board
will be done after taking into account, among other things, changes in the cost
of living, Employee's own performance and the performance of FCB. Any action or
review by the Board may be delegated to an appropriate committee thereof.
4. Expenses.
So long as Employee is employed hereunder, Employee is entitled to receive
reimbursement for, or seek payment directly by FCB of, all reasonable expenses
which are consistent with the normal policy of FCB in the performance of
Employee's duties hereunder, provided that Employee accounts for such expenses
in writing.
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5. Employee Benefits.
So long as Employee is actively employed hereunder, Employee will be
entitled to participate in the employee benefit, option, bonus and any other
compensation programs covering executive officers of FCB and its affiliated
companies substantially similar to those amounts received by the group of
executive officers of FCB and its affiliated companies disclosed in any PAB
filings as the group of highly compensated employees or similar designation.
6. Vacation.
Employee shall be entitled to a vacation in accordance with FCB's vacation
policy in effect at the time the vacation is to be taken but in no event less
than the current vacation benefit provided to Employee by Bainbridge National
Bank.
7. Confidentiality.
In Employee's position as an employee of FCB, Employee has had and will
have access to confidential information, trade secrets and other proprietary
information of vital importance to FCB and has and will also develop
relationships with customers, employees and others who deal with FCB which are
of value to FCB. FCB requires as a condition to Employee's employment with FCB
that Employee agrees to certain restrictions on Employee's use of the
proprietary information and valuable relationships developed during Employee's
employment with FCB. In consideration of the terms and conditions contained
herein, the parties hereby agree as follows:
7.1 FCB and Employee mutually agree and acknowledge that FCB may
entrust Employee with highly sensitive confidential, restricted and proprietary
information concerning various Business Opportunities (as hereinafter defined),
customer lists, and personnel matters. Employee acknowledges that he shall bear
a fiduciary responsibility to FCB to protect such information from use or
disclosure that is not necessary for the performance of Employee's duties
hereunder, as an essential incident of Employee's employment with FCB.
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7.2 For the purposes of this Section, the following definitions shall
apply:
7.2.1 "Trade Secret" shall mean the identity and addresses of
customers of FCB, the whole or any portion or phase of any scientific or
technical information, design, process, procedure, formula or improvement that
is valuable and secret (in the sense that it is not generally known to
competitors of FCB) and which is defined as a "trade secret" under Georgia law
pursuant to the Georgia Trade Secrets Act.
7.2.2 "Confidential Information" shall mean any data or
information, other than Trade Secrets, which is material to FCB and not
generally known by the public. Confidential Information shall include, but not
be limited to, Business Opportunities of FCB (as hereinafter defined), the
details of this Agreement, FCB's business plans and financial statements and
projections, information as to the capabilities of FCB's employees, their
respective salaries and benefits and any other terms of their employment and the
costs of the services FCB may offer or provide to the customers it serves, to
the extent such information is material to FCB and not generally known by the
public.
7.2.3 "Business Opportunities" shall mean any specialized
information or plans of FCB concerning the provision of financial services to
the public, together with all related information concerning the specifics of
any contemplated financial services regardless of whether FCB has contacted or
communicated with such target person or business.
7.2.4 Notwithstanding the definitions of Trade Secrets,
Confidential Information, and Business Opportunities set forth above, Trade
Secrets, Confidential Information, and Business Opportunities shall not include
any information:
(i) that is or becomes generally known to the public;
(ii) that is already known by Employee or is developed by
Employee after termination of employment through entirely independent efforts;
(iii) that Employee obtains from an independent source
having a bona fide right to use and disclose such information;
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(iv) that is required to be disclosed by law, except to the
extent eligible for special treatment under an appropriate protective order; or
(v) that FCB's Board of Directors approves for release.
7.3 Employee shall not, without the prior approval of FCB's Board, during
his employment with FCB and for so long thereafter as the information or data
remain Trade Secrets, use or disclose, or negligently permit any unauthorized
person who is not an employee of FCB to use, disclose, or gain access to, any
Trade Secrets of FCB, its affiliates, or of any other person or entity making
Trade Secrets available for FCB's use.
7.4 Employee shall not, without the prior written consent of FCB, during
his employment with FCB and for a period of eighteen (18) months thereafter as
long as the information or data remain competitively sensitive, use or disclose,
or negligently permit any unauthorized person who is not employed by FCB to use,
disclose, or gain access to, any Confidential Information to which the Employee
obtained access by virtue of his employment with FCB, except as provided in
Section 7.2 of this Agreement.
8. Observance of Security Measures.
During Employee's employment with FCB, Employee is required to observe all
security measures adopted to protect Trade Secrets, Confidential Information,
and Business Opportunity of FCB.
9. Return of Materials.
Upon the request of FCB and, in any event, upon the termination of his
employment with FCB, Employee shall deliver to FCB all memoranda, notes,
records, manuals or other documents, including all copies of such materials
containing Trade Secrets or Confidential Information, whether made or compiled
by Employee or furnished to him from any source by virtue of his employment with
FCB.
10. Severability.
Employee acknowledges and agrees that the covenants contained in Sections 7
through 9 of this Agreement shall be construed as covenants independent of one
another and distinct from
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the remaining terms and conditions of this Agreement, and severable from every
other contract and course of business between FCB and Employee, and that the
existence of any claim, suit or action by Employee against FCB, whether
predicated upon this or any other agreement, shall not constitute a defense to
FCB's enforcement of any covenant contained in Sections 7 through 9 of this
Agreement.
11. Specific Performance.
Employee acknowledges and agrees that the covenants contained in Sections 7
through 9 of this Agreement shall survive any termination of employment, as
applicable, with or without Cause, at the instigation or upon the initiative of
either party. Employee further acknowledges and agrees that the ascertainment
of damages in the event of Employee's breach of any covenant contained in
Sections 7 through 9 of this Agreement would be difficult, if at all possible.
Employee therefore acknowledges and agrees that FCB shall be entitled in
addition to and not in limitation of any other rights, remedies, or damages
available to FCB in arbitration, at law or in equity, upon submitting whatever
affidavit the law may require, and posting any necessary bond, to have a court
of competent jurisdiction enjoin Employee from committing any such breach.
12. Termination.
During the term of this Agreement, employment, including without
limitation, except as otherwise provided in this Section 12, all compensation,
salary, expenses reimbursement, and employee benefits may be terminated as
follows:
12.1 At the election of FCB for Cause;
12.2 At Employee's election, for Good Reason or upon FCB's breach of
any material provision of this Agreement;
12.3 "Cause" shall mean (i) conduct by Employee that amounts to
fraud, material dishonesty, gross negligence or willful misconduct in the
performance of his duties hereunder; (ii) the conviction (from which no appeal
may be, or is, timely taken) of the Employee of a felony; (iii) initiation of
suspension or removal proceedings against the Employee by federal or state
regulatory authorities acting under lawful authority pursuant to provisions of
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federal or state law or regulation which may be in effect from time to time;
(iv) knowingly violates federal or state banking laws or regulations ; or (v)
refuses to perform a duly authorized directive of the FCB Board of Directors;
12.4 Upon Employee's death, or, at the election of either party, upon
Employee's disability as determined in accordance with the standards and
procedures under Employee's then-current long-term disability insurance coverage
provided by FCB, or, if such disability insurance coverage provided by FCB is
not then in place, upon Employee's disability resulting in inability to perform
the duties described in Section 1 of this Agreement for a period of one hundred
eighty (180) consecutive days;
12.5 "Good Reason" shall mean
(i) a material change in Employee's status, offices, titles,
reporting requirements, lending authority after initial modification by PAB
after the Merger, duties or responsibilities with Bainbridge National Bank as in
effect on the effective date of the Merger, or any other action by PAB which
results in a material diminution in such position, authority, duties or
responsibilities;
(ii) a reduction in Employee's Base Salary and benefits as in
effect on the effective date of the Merger or as the same may be increased from
time to time, unless a similar reduction is made in salary and benefits of all
similarly-situated officers of PAB; or
(iii) any requirement by PAB or FCB that Employee relocate to a
location more than fifty (50) miles from the main office as defined in Section
15.1.2 of this Agreement;
12.6 Provided there has not occurred a Change in Control as set forth
in Section 14 of this Agreement, if this Agreement is terminated either (i) by
FCB at any time for any reason other than for Cause, (ii) by Employee for Good
Reason or (iii) upon FCB's breach of this Agreement, then FCB shall pay to
Employee as Employee's sole remedy hereunder the compensation and benefits
remaining under this Agreement, at a rate no less than Employee's Annual Salary
as defined in Section 14 of this Agreement for a term equal to the greater of
either
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(y) the remaining months of the original thirty-six (36) month term of
this Agreement, or (z) twelve (12) months, as if no termination occurred; or
12.7 If the Agreement is terminated for Cause, Employee shall receive
no further compensation or benefits, other than Employee's Base Salary and other
compensation as accrued through the date of termination for Cause.
13. Notice.
All notice provided for herein shall be in writing and shall be deemed to
be given when delivered in person or deposited in the United States Mail,
registered or certified, return receipt requested, with proper postage prepaid
and addressed as follows:
FCB: PAB Bankshares, Inc.
0000 X. Xxx Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: President
with a copy to: Xxxxxxxx Xxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esquire
Employee: Xxxxx X. Xxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000
14. Change in Control.
None of the benefits provided in Section 14 of this Agreement shall be
payable to Employee unless (i) there shall have been a Change in Control of
either PAB or FCB, as set forth in this Section 14, and (ii) Employee is
employed by FCB at such time.
14.1 "PAB Board" shall mean the Board of Directors of PAB.
14.2 "Change in Control" shall be deemed to have occurred if:
14.2.1 During the term of this Agreement, the individuals
constituting PAB's Board at the effective date of the Merger ("Beginning PAB
Board") cease for any reason to constitute at least a majority of said Board,
provided that in making such determination, a
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Director elected by or on the recommendation of the Beginning PAB Board shall
be deemed to be a member of such Beginning PAB Board, excluding, for this
purpose, any Director whose assumption of office occurs as a result of an
actual or threatened election contest or proxy contest with respect to the
election or removal of directors; or
14.2.2 If (i) a notice or an application is filed with the Federal
Reserve Board ("FRB") pursuant to Regulation "Y" of the FRB under the Change in
Bank Control Act or the Bank Holding Company Act or with the Georgia Department
of Banking and Finance (the "Department") pursuant to the Financial Institutions
Code of Georgia for permission to acquire control of PAB or FCB, or (ii) more
than twenty-five percent (25%) of the PAB's outstanding common stock or
equivalent in voting power of any class or classes of outstanding securities of
PAB entitled to vote in elections of Directors shall be acquired by any
corporation or other person, or group. "Group" shall mean persons who act in
concert as described in Section 13(d)(3) or 14(d) (2) of the Securities Exchange
Act of 1934 as amended; or
14.2.3 PAB shall become a subsidiary of another corporation or
shall be merged or consolidated into another corporation and (i) less than a
majority of the outstanding voting shares of the parent or surviving corporation
after such acquisition, merger or consolidation are owned immediately after such
acquisition, merger or consolidation by the owners of the voting shares of PAB
immediately before such acquisition, merger or consolidation, or (ii) a person
or entity (excluding any corporation resulting from such business combination or
any employee benefit plan or related trust of PAB or such resulting corporation)
beneficially owns or controls 25% or more of the combined voting power of the
then outstanding securities of such corporation, except to the extent that such
ownership existed prior to the business combination, or (iii) less than a
majority of the members of the board of directors of the corporation resulting
from such business combination were members of the PAB Board at the time of the
execution of the initial agreement for such merger or consolidation; or
14.2.4 Substantially all of the assets of PAB shall be sold to
another entity other than a sale to a wholly-owned subsidiary of PAB; or
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14.2.5 The sale or transfer of any of the stock or substantially
all of the assets of FCB regardless of the form of the transaction, other than a
sale or transfer to a wholly-owned subsidiary of PAB.
14.3 Employee and PAB agree in the event of a Change in Control of
PAB, Employee will remain in the employ of FCB and FCB shall employ Employee,
for the remainder of the term of this Agreement, or 12 months, whichever is
greater, performing the same duties that he was performing at the time of the
effective date of the Change in Control and with the same title, compensation,
benefits, reporting requirements and location. Any extension of employment
under this Section 14.3 shall be deemed an extension of the term of this
Agreement, during which all provisions of this Agreement shall remain in effect.
14.4 Subject to the terms and conditions of this Agreement, following
a Change in Control of PAB, Employee shall receive the following compensation in
consideration for the services to be provided on behalf of FCB as set forth
herein:
14.4.1 If FCB terminates Employee without Cause, or if FCB takes
any action specified in Section 14.4.2 of this Agreement during the term of this
Agreement following the date of occurrence of a Change in Control of PAB,
("Termination of Employment"), the Company shall pay Employee, at Employee's
election, the following amounts:
ALTERNATIVE A
(i) a lump sum cash payment in an amount equal to the product of two and
eleven-twelfths (2 and 11/12) multiplied by Employee's annual compensation from
FCB, including salary, bonuses, all perquisites, and all other forms of
compensation paid to Employee for his benefit or the benefit of his family,
however characterized, for the fiscal year during the term of this Agreement for
which such compensation was highest ("Employee's Annual Salary"). The payment
provided for in this Section 14.2.1 (i) shall be due and payable to Employee
within thirty (30) days after the date of Termination of Employment; or
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ALTERNATIVE B
(i) twelve (12) payments, each in an amount equal to (A) the product of
two and eleven-twelfths (2 and 11/12) multiplied by Employee's Annual Salary,
divided by (B) twelve (12)("Monthly Payments"). The Monthly Payments shall be
made, commencing on the date of Termination of Employment, on the first day of
each calendar month; and
(ii) for a one (1) year period commencing on the date of Termination of
Employment, FCB shall provide to Employee and his spouse and family, and pay all
costs and expenses associated with, major medical insurance, health insurance,
hospitalization, life insurance, long-term disability and any other medical
plans and programs of FCB with the same coverage and benefits provided to
Employee by FCB immediately preceding the date of a Change of Control of PAB.
In the event Employee is employed during the remaining term of this Agreement by
a person or entity unaffiliated with PAB, the benefits to be provided to
Employee and his spouse in this Section 14.2.1 (ii) shall be reduced to the
extent equivalent benefits are provided by the subsequent employer; and
(iii) In addition to the amounts paid under either ALTERNATIVE A or
ALTERNATIVE B, and Section 14.4.1(ii), FCB shall pay Employee's base salary as
accrued through the date of Termination of Employment at the higher of the rate
in effect at the time of Termination of Employment and the highest rate in
effect at any time during the term of this Agreement, plus any other amounts to
which Employee is entitled under any compensation plan of FCB, at the time such
payments are due.
14.4.2 During the remaining term of this Agreement following the
effective date of a Change in Control, if FCB takes any of the following
actions, such action shall be deemed to be a termination without Cause. Those
actions are: (i) a reduction in Employee's salary, bonus provisions or other
perquisites as were in effect immediately prior to a Change in Control, (ii) a
material change in the duties required to be performed by Employee on behalf of
FCB, (iii) a failure by FCB to increase Employee's salary annually in accordance
with an established procedure, or (iv) a requirement by FCB that Employee
relocate more than fifty (50)
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miles from the Main Office. In any such event, Employee shall be entitled to all
payments provided for in Section 14.4.1 of this Agreement.
15. Covenant Not to Compete and Not to Solicit.
15.1 For purposes of this Section 15, FCB and Employee conduct the
following business in the following geographic areas:
15.1.1 FCB is engaged in the business of transacting business as
a bank which accepts deposits, makes loans, cash checks and otherwise engages in
the business of banking ("Business of FCB").
15.1.2 After merging with Bainbridge National Bank, FCB will
actively conduct business in the geographic areas of Georgia and Florida from
its main office located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 31717-
3616 (the "Main Office").
15.1.3 Employee has established business relationships and
performs the duties described in Section 1 of this Agreement in the geographic
area covered by a circle having a radius of fifty (50) miles from the Main
Office, and will work primarily in such area while in the employ of FCB.
15.2 Employee covenants and agrees that for a period of eighteen (18)
months after the termination of his employment with FCB for any reason, Employee
shall not, directly or indirectly, as principal, agent, trustee, consultant or
through the agency of any corporation, partnership, association, trust or other
entity or person, on Employee's own behalf or for others, provide the duties
described in Section 1 of this Agreement for any entity or person conducting the
Business of FCB within the geographic area covered by a circle having a radius
of fifty (50) miles from the Main Office.
15.3 Employee acknowledges that an important factor leading to the
Merger is the loyalty of Bainbridge National Bank's employees. Accordingly,
Employee agrees that both during the term of this Agreement and for a period of
eighteen (18) months after the termination of this Agreement for any reason,
Employee will not enter into, and will not participate in, any plan or
arrangement to cause any FCB employee to terminate his or her employment with
FCB,
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and, Employee further agrees that for a period of at least eighteen (18)
months after the termination of employment by any employee of FCB, Employee will
not hire such employee in connection with any business initiated by Employee or
any other person, firm or corporation. Employee further agrees that information
as to the capabilities of FCB's employees, their salaries and benefits, and any
other terms of their employment is Confidential Information and proprietary to
FCB.
15.4 Employee and FCB shall periodically amend this Agreement by
updating the address referenced in Section 15.1.2 of this Agreement so that it
at all times lists the then current geographic area served by FCB for which
Employee performs the duties described in Section 1 of this Agreement.
15.5 The covenants contained in this Section 15 shall be construed as
agreements severable from and independent of each other and of any other
provision of this or any other contract or agreement between the parties hereto.
The existence of any claim or cause of action by Employee against FCB, whether
predicated upon this or any other contract or agreement, shall not constitute a
defense to the enforce ment by FCB of said covenants.
16. Miscellaneous.
16.1 This Agreement constitutes and expresses the whole agreement of
the parties in reference to the employment of Employee by FCB, and there are no
representations, inducements, promises, agreements, arrangements, or
undertakings oral or written, between the parties other than those set forth
herein.
16.2 This Agreement shall be governed by the laws of the State of
Georgia.
16.3 Should any clause or any other provision of this Agreement be
determined to be void or unenforceable for any reason, such determination shall
not affect the validity or enforceability of any clause or provision of this
Agreement, all of which shall remain in full force and effect.
16.4 Time is of the essence in this Agreement.
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16.5 This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their successors and assigns. This Agreement shall not
be assignable by any other parties hereto without the prior written consent of
the other parties.
16.6 This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which taken together shall
constitute but a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
"Employee"
/s/Xxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx (SEAL)
------------------------------------ ------------------------------
Witness Xxxxx X. Xxxxx
ATTEST "FCB"
FIRST COMMUNITY BANK OF
SOUTHWEST GEORGIA
/s/ Xxxxxx XxXxxxxx By: /s/ R. Xxxxxxxx Xxxxxxxx, CEO
------------------------------------ ------------------------------------
(BANK SEAL)
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