Exhibit 10.19
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement"), is entered into as
of the 12th day of July, 1999, by and between ABC BANCORP, a Georgia corporation
("Employer"), and XXXX X. XXXXXX, an individual resident of the State of
Tennessee ("Executive").
W I T N E S S E T H:
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WHEREAS, Employer wishes to employ Executive as its Executive Vice
President and Chief Operating Officer, and Executive wishes to serve in such
position, on the terms and conditions set forth herein;
WHEREAS, Executive desires to be assured of a secure minimum compensation
from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of Executive on
behalf of Employer on an objective and impartial basis and without distraction
or conflict of interest in the event of an attempt by any person or entity to
obtain control of Employer;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Executive on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it has developed over the years at
substantial expense and assurance that Executive will not compete with Employer
for a reasonable period of time after termination of his employment with
Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of these premises, the mutual covenants
and undertakings herein contained, Employer and Employee, each intending to be
legally bound, covenant and agree as follows:
1. Employment. Upon the terms and subject to the conditions set forth in
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this Agreement, Employer employs Executive as its Executive Vice President and
Chief Operating Officer, and Executive hereby accepts such employment.
2. Position and Duties. Executive agrees to serve as the Executive Vice
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President and Chief Operating Officer of Employer and to perform such duties in
that office as may reasonably be assigned to him by the Board of Directors of
the Company (the "Board") or by the Chief Executive Officer; provided, however,
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that such duties shall be of the same character as those generally associated
with the office held by Executive. Employer shall not, without the written
consent of Executive, relocate or transfer Executive
to a location other than a location within the geographic boundaries of the
State of Georgia. During the term of this Agreement, Executive agrees that he
will serve Employer faithfully and to the best of his ability and that he will
devote his full business time, attention and skills to Employer's business;
provided, however, that the foregoing shall not be deemed to restrict Executive
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from devoting a reasonable amount of time and attention to the management of his
personal affairs and investments, so long as such activities do not interfere
with the responsible performance of Executive's duties hereunder.
3. Term. The term of this Agreement shall begin on the date hereof (the
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"Effective Date") and, unless otherwise earlier terminated pursuant to Section 8
hereof, shall end on the date which is two (2) years following the Effective
Date (hereinafter referred to as the "Initial Term"). The Initial Term shall be
extended automatically for an additional year (each an "Additional Term") on the
last day of the Initial Term or each Additional Term hereof unless either party
hereto gives written notice to the other party not to so extend within ninety
(90) days prior to the expiration of the Initial Term or any subsequent
Additional Term, as the case may be, in which case no further extension shall
occur and the term of this Agreement shall end at the end of the Initial Term or
the Additional Term during which such notice not to so extend was given;
provided, however, that, notwithstanding any notice by Employer not to extend,
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the term of this Agreement shall not expire prior to the expiration of twelve
(12) months after the occurrence of a Change of Control (as hereinafter
defined); and provided further, however, that this Agreement shall automatically
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terminate (and the Initial Term or any Additional Term shall thereupon end)
without notice when Executive attains 65 years of age.
4. Compensation.
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(A) Executive shall receive an annual salary of ONE HUNDRED EIGHTY
THOUSAND DOLLARS ($180,000) ("Base Compensation") payable at regular intervals
in accordance with Employer's normal payroll practices now or hereafter in
effect. Employer may consider and declare from time to time increases in the
salary it pays Executive and thereby increase the Base Compensation. Prior to
(but not after) a Change of Control, Employer may also declare decreases in the
salary it pays Executive if the operating results of Employer are significantly
less favorable than those for its immediately preceding fiscal year, and
Employer makes similar decreases in the salary it pays to other executive
officers of Employer; provided, however, that Employer shall not be permitted to
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decrease Executive's annual salary below $180,000 during the Initial Term
hereof. After a Change of Control, Employer shall consider and declare salary
increases based upon the following standards:
(1) Inflation;
(2) Adjustments to the salaries of other senior management personnel;
and
(3) Past performance of Executive and the contribution which Executive
makes to the business and profits of Employer.
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Any and all increases or decreases in Executive's salary pursuant to this
Section 4(A) shall cause the level of Base Compensation to be increased or
decreased by the amount of each such increase or decrease for purposes of this
Agreement. The increased or decreased level of Base Compensation as provided in
this Section 4(A) shall become the level of Base Compensation for the remainder
of the Initial Term or any Additional Term until there is a further increase or
decrease in Base Compensation as provided herein.
(B) In addition to his Base Compensation, Executive shall be awarded, on a
pro-rata basis for Executive's employment during calendar year 1999 and for each
calendar year thereafter during the Initial Term or any Additional Term
hereunder, an annual bonus (an "Annual Bonus") either pursuant to a bonus or
incentive plan of Employer or otherwise on terms no less favorable than those
awarded to other executive officers of Employer.
5. Other Benefits.
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(A) So long as Executive is employed by Employer pursuant to this
Agreement, he shall be included as a participant in all present and future
employee benefit, retirement and compensation plans of Employer generally
available to its employees, consistent with his Base Compensation and his
position as Executive Vice President and Chief Operating Officer, including,
without limitation, Employer's Money Purchase Pension Plan and 401(k) Profit
Sharing Plan, and Executive and his dependents shall be included in Employer's
hospitalization, major medical, disability and group life insurance plans. Each
of the above benefits shall continue in effect on terms no less favorable than
those for other executive officers of Employer's banking subsidiaries in effect
as of the date hereof (as permitted by law) during the Initial Term or any
Additional Term hereof (1) unless prior to a Change of Control, the operating
results of Employer are significantly less favorable than those for its
immediately preceding fiscal year, or (2) unless (either before or after a
Change of Control) (a) changes in the accounting or tax treatment of such plans
would materially adversely affect Employer's operating results or financial
condition, and (b) the Board concludes that modifications to such plans need to
be made to avoid such adverse effects.
6. Expenses. So long as Executive is employed by Employer pursuant to
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this Agreement, Executive shall receive reimbursement from Employer for all
reasonable business expenses incurred in the course of his employment by
Employer upon proper submission to Employer of written vouchers and statements
for reimbursement. In addition, Employer shall (a) provide to Executive an
automobile and pay for all costs associated therewith during the Initial Term
and any Additional Term hereof, and (b) reimburse Executive for all mileage
driven by Executive in his personal automobile in connection with his duties
hereunder in accordance with Employer's mileage reimbursement policy as in
effect from time to time. Employer shall also use its best efforts to provide
to Executive a country club membership for business and personal use and shall
pay for all initiation fees and monthly dues related thereto; provided, however,
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that, if such membership is not already owned by Executive as of the date
hereof, then such membership shall be and remain the sole property of Employer.
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7. Vacation. For the remainder of calendar year 1999, Executive shall be
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entitled to three (3) weeks paid vacation pro-rated for the portion of the
calendar year during which Executive is retained hereunder. Beginning with
calendar year 2000, Executive shall be entitled to three (3) weeks paid vacation
during each calendar year of Executive's employment hereunder.
8. Termination. Subject to the respective continuing obligations of the
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parties hereto, including, without limitation, those set forth in Subsections
10(A), 10(B), 10(C) and 10(D) hereof, Executive's employment by Employer
hereunder may be terminated prior to the expiration of the Initial Term or any
Additional Term hereof as follows:
(A) Employer, by action of the Board and upon written notice to Executive,
may terminate Executive's employment with Employer immediately for cause. For
purposes of this Subsection 8(A), "cause" for termination of Executive's
employment shall exist (a) if Executive is convicted of (from which no appeal
may be taken), or pleads guilty to, any act of fraud, misappropriation or
embezzlement, or any felony, (b) if, in the determination of the Board,
Executive has engaged in gross or willful misconduct materially damaging to the
business of Employer (it being understood, however, that neither conduct
pursuant to Executive's exercise of his good faith business judgment nor
unintentional physical damage to any property of Employer by Executive shall be
a ground for such a determination by the Board), or (c) if Executive has failed,
without reasonable cause, to follow reasonable written instructions of the Board
or the Chief Executive Officer of Employer consistent with Executive's position
as Executive Vice President and Chief Operating Officer of Employer and, after
written notice from Employer of such failure, Executive at any time thereafter
again so fails.
(B) Executive, by written notice to Employer, may terminate his employment
with Employer immediately for good reason. For purposes of this Subsection
8(B), "good reason" for termination shall mean a good faith determination by
Executive, in Executive's sole and absolute judgment, that any one or more of
the following events has occurred, without Executive's express written consent:
(1) after a Change of Control, a change in Executive's reporting
responsibilities, titles or offices as in effect immediately prior to the
Change of Control, or any removal of the Executive from, or any failure to
re-elect the Executive to, any of Executive's positions that Executive held
immediately prior to the Change of Control, which has the effect of
diminishing Executive's responsibility or authority;
(2) after a Change of Control, a reduction by Employer in Executive's
Base Compensation as in effect immediately prior to the Change of Control
or as the same may be increased from time to time or a change in the
eligibility requirements or performance criteria under any bonus, incentive
or compensation plan, program or arrangement under which Executive is
covered immediately prior to the Change of
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Control which adversely affects Executive;
(3) at the time of a Change of Control, Employer requires Executive to
be based anywhere other than a job location within the geographic
boundaries of the State of Georgia;
(4) after a Change of Control and without replacement by a plan
providing benefits to Executive substantially equal to or greater than
those discontinued, the failure by Employer to continue in effect, within
its maximum stated term, any pension, bonus, incentive, stock ownership,
purchase, option, life insurance, health, accident, disability, or any
other employee benefit plan, program or arrangement in which Executive is
participating at the time of the Change of Control, or the taking of any
action by Employer after a Change of Control that would adversely affect
Executive's participation or materially reduce Executive's benefits under
any of such plans;
(5) after a Change of Control, the taking of any action by Employer
that would materially adversely affect the physical conditions existing at
the time of the Change of Control in or under which Executive performs his
employment duties, provided that Employer may take action with respect to
such conditions after a Change of Control so long as such conditions are at
least commensurate with the conditions in or under which an officer of
Executive's status would customarily perform his employment duties; or
(6) after a Change of Control, a material change in the fundamental
business philosophy, direction, and precepts of Employer and its
subsidiaries, considered as a whole, as the same existed prior to the
Change of Control.
Any event described in this Subsection 8(B)(1) through (6) which occurs prior to
a Change of Control but which Executive reasonably demonstrates (x) was at the
request of a third party who has indicated an intention, or taken steps
reasonably calculated, to effect a Change of Control or (y) otherwise arose in
connection with, or in anticipation of, a Change of Control which actually
occurs, shall constitute good reason for purposes hereof, notwithstanding that
it occurred prior to a Change of Control.
(C) Executive, upon ninety (90) days written notice to Employer, may
terminate his employment with Employer without good reason.
(D) Executive's employment with Employer shall terminate in the event of
Executive's death or disability. For purposes of this Agreement, "disability"
shall be defined as Executive's inability by reason of illness or other physical
or mental incapacity to perform the duties required by his employment for any
consecutive one hundred eighty (180) day period.
(E) A "Change of Control" shall mean any of the following events:
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(1) the merger or consolidation of Employer with, or the sale of all or
substantially all of the assets of Employer to, any person or entity or
group of associated persons or entities;
(2) the direct or indirect beneficial ownership, in the aggregate, of
securities of Employer representing twenty-five percent (25%) or more of
the total combined voting power of Employer's then issued and outstanding
securities by any person or entity, or group of associated persons or
entities acting in concert, not affiliated (within the meaning of the
Securities Act of 1933, as amended) with Employer as of the date hereof;
provided, however, that the Board may, at any time and in its sole
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discretion, increase the ownership percentage threshold of this Subsection
8(E)(2) to an amount not exceeding forty percent (40%);
(3) the shareholders of Employer approve any plan or proposal for the
liquidation or dissolution of the Employer; or
(4) a change in the composition of the Board at any time during any
consecutive twenty-four (24) month period such that the "Continuity
Directors" cease for any reason to constitute at least a seventy percent
(70%) majority of the Board. For purposes of this Agreement, "Continuity
Directors" means those members of the Board who either:
(a) were directors at the beginning of such consecutive twenty-four
(24) month period; or
(b) were elected by, or on the nomination or recommendation of, at
least a two-thirds (2/3) majority of the Board.
9. Compensation Upon Termination. In the event of termination of
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Executive's employment with Employer pursuant to Section 8 hereof, compensation
shall continue to be paid by Employer to Executive as follows:
(A) In the event of a termination pursuant to Subsection 8(A) or Subsection
8(C) hereof, compensation provided for herein (including Base Compensation and
an Annual Bonus) shall continue to be paid, and Executive shall continue to
participate in the employee benefit, retirement, compensation plans and other
perquisites as provided in Section 5 hereof, through and including the Date of
Termination (as hereinafter defined) specified in the Notice of Termination (as
hereinafter defined). Any benefits payable under insurance, health, retirement
and bonus plans as a result of Executive's participation in such plans through
the Date of Termination specified in the Notice of Termination shall be paid
when due under such plans.
(B) In the event of a termination pursuant to Subsection 8(B) hereof,
compensation provided for herein (including Base Compensation and an Annual
Bonus) shall continue to
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be paid, and Executive shall continue to participate in the employee benefit,
retirement, compensation plans and other perquisites as provided in Section 5
hereof, through the Date of Termination specified in the Notice of Termination,
and any benefits payable under insurance, health, retirement and bonus plans as
a result of Executive's participation in such plans through the Date of
Termination specified in the Notice of Termination shall be paid when due under
those plans. In addition, if the event of termination pursuant to Subsection
8(B) hereof occurs (x) after the Initial Term and (y) within twelve (12) months
after the date of a Change of Control, then, subject to the terms of Section 12
hereof, (1) Executive shall be entitled to continue to receive from Employer for
three (3) additional 12-month periods his Base Compensation at the rates in
effect at the time of termination plus an Annual Bonus in an amount equal to at
least forty percent (40%) of such Base Compensation as of the date of the event
of termination, payable in accordance with Employer's standard payment practices
then existing; (2) Executive shall be entitled to continue to participate for
three (3) additional 12-month periods in each employee welfare benefit plan (as
such term is defined in the Employment Retirement Income Security Act of 1974,
as amended) in which Executive was entitled to participate immediately prior to
the date of his termination, unless an essentially equivalent and no less
favorable benefit is provided by a subsequent employer of Executive, provided
that if the terms of any such employee welfare benefit plan or applicable laws
do not permit continued participation by Executive, Employer will arrange to
provide to Executive a benefit substantially similar to, and no less favorable
than, the benefit he was entitled to receive under such plan at the end of the
period of coverage; (3) Employer shall contribute the maximum contributions
allowable under Employer's Money Purchase Pension Plan and 401(k) Profit Sharing
Plan, or any successor plans thereto, for the benefit of Executive; and (4)
Executive shall be entitled to receive payment from Employer for reasonable
relocation expenses if Executive relocates within five hundred (500) miles of
Moultrie, Georgia if such relocation occurs within one hundred eighty (180) days
after the Date of Termination specified in the Notice of Termination.
(C) In the event of a termination pursuant to Subsection 8(D) hereof,
compensation provided for herein (including Base Compensation and an Annual
Bonus) shall continue to be paid, and Executive shall continue to participate in
the employee benefit, retirement, and compensation plans and other perquisites
as provided in Section 5 hereof, (1) in the event of Executive's death, through
the date of death, or (2) in the event of Executive's disability, through the
Date of Termination specified in the Notice of Termination. Any benefits payable
under insurance, health, retirement and bonus plans as a result of Executive's
participation in such plans through the date of death or the Date of Termination
specified in the Notice of Termination, as the case may be, shall be paid when
due under those plans.
(D) Employer will permit Executive or his personal representative(s) or
heirs, during a period of ninety (90) days following the Date of Termination of
Executive's employment by Employer (as specified in the Notice of Termination)
for the reasons set forth in Subsection 8(B) hereof, to purchase all of the
stock of Employer that would be issuable under all outstanding stock options, if
any, previously granted by Employer to Executive under any Employer stock option
plan then in effect, whether or not such options are then
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exercisable, at a cash purchase price equal to the purchase price as set forth
in such outstanding stock options.
10. Restrictive Covenants.
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(A) Executive acknowledges that (1) Employer has separately bargained and
paid additional consideration for the restrictive covenants herein; and (2)
Employer will provide certain benefits to Executive hereunder in reliance on
such covenants in view of the unique and essential nature of the services
Executive will perform on behalf of Employer and the irreparable injury that
would befall Employer should Executive breach such covenants.
(B) Executive further acknowledges that his services are of a special,
unique and extraordinary character and that his position with Employer will
place him in a position of confidence and trust with employees of Employer and
its subsidiaries and affiliates and with Employer's other constituencies and
will allow him access to confidential information concerning Employer and its
subsidiaries and affiliates.
(C) Executive further acknowledges that the type and periods of
restrictions imposed by the covenants in this Section 10 are fair and reasonable
and that such restrictions will not prevent Executive from earning a livelihood.
(D) Having acknowledged the foregoing, Executive covenants and agrees with
Employer as follows:
(1) While Executive is employed by Employer and for a period of two (2)
years after termination of such employment for any reason or for no reason,
Executive shall not divulge or furnish any trade secrets (as defined in
(S)10-1-761 of the Official Code of Georgia Annotated) of Employer or any
confidential information acquired by him while employed by Employer
concerning the policies, plans, procedures or customers of Employer to any
person, firm or corporation, other than Employer or upon its written
request, or use any such trade secret or confidential information (which
shall at all times remain the property of Employer) directly or indirectly
for Executive's own benefit or for the benefit of any person, firm or
corporation other than Employer.
(2) For a period of two (2) years after termination of Executive's
employment (a) by Employer for any of the reasons set forth in Subsection
8(A) of this Agreement, or (b) by Executive pursuant to Section 3 or
Subsection 8(C) of this Agreement, Executive shall not directly or
indirectly provide banking or bank-related services to, or solicit the
banking or bank-related business of, any customer of Employer or any of its
subsidiaries at the time of such provision of services or solicitation
which Executive served either alone or with others while employed by
Employer in any city, town, borough, township, village or other place in
which Executive performed services for Employer while employed by it, or
assist any actual or potential competitor of Employer or any of its
subsidiaries to provide banking or
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bank-related services to or solicit any such customer's banking or bank-
related business in any such place.
(3) While Executive is employed by Employer and for a period of two
(2) years after termination of Executive's employment (a) by Employer for
any of the reasons set forth in Subsection 8(A) of this Agreement, or (b)
by Executive pursuant to Section 3 or Subsection 8(C) of this Agreement,
Executive shall not, directly or indirectly, as principal, agent, or
trustee, or through the agency of any corporation, partnership, trade
association, agent or agency, engage in any banking or bank-related
business or venture which competes with the business of Employer as
conducted during Executive's employment by Employer within the geographic
limitations of the State of Georgia.
(4) If Executive's employment by Employer is terminated for reasons
other than those set forth in Subsection 8(B) of this Agreement, and
Executive subsequently (a) provides banking or bank-related services to, or
solicits the banking or bank-related business of, any customer of Employer
or any of its subsidiaries at the time of such provision of services or
solicitation which Executive served either alone or with others while
employed by Employer in any city, town, borough, township, village or other
place in which Executive performed services for Employer while employed by
it, or assists any actual or potential competitor of Employer or any of its
subsidiaries to provide banking or bank-related services to or solicit any
such customer's banking or bank-related business in any such place, or (b)
engages, directly or indirectly, as principal, agent, or trustee, or
through the agency of any corporation, partnership, trade association,
agent or agency, with any banking or bank-related business or venture which
competes with the business of Employer as conducted during Executive's
employment by Employer within the geographic limitations of the State of
Georgia, then Employer may immediately terminate and shall not be required
to continue on behalf of the Executive or his dependents and beneficiaries
any compensation provided for herein (including Base Compensation and any
Annual Bonus) and any employee benefit, retirement and compensation plans
and other prerequisites provided in Section 5 hereof other than those
benefits that Employer may be required to maintain for Executive under
applicable federal or state law.
(5) If Executive's employment by Employer is terminated for any of the
reasons set forth in Subsection 8(B) of this Agreement, then Executive may
thereafter (a) provide banking or bank-related services to, or solicit the
banking or bank-related business of, any customer of Employer or any of its
subsidiaries at the time of such provision of services or solicitation
which Executive served either alone or with others while employed by
Employer in any location within the geographic limitations of the State of
Georgia, or assist any actual or potential competitor of Employer or any of
its subsidiaries to provide banking or bank-related services to or solicit
any such customer's banking or bank-related business in any such place, or
(b) engage, directly or indirectly, as principal, agent or trustee, or
through the agency of any
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corporation, partnership, trade association, agent or agency, with any
banking or bank-related business or venture which competes with the
business of Employer as conducted during Executive's employment by Employer
within the geographic limitations of the State of Georgia; provided,
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however, that if Executive engages in any such activities after a
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termination under Subsection 8(B) hereof, then Employer may immediately
terminate and shall not be required to continue on behalf of the Employee
or his dependents and beneficiaries any compensation provided for herein
(including, without limitation, Base Compensation, any Annual Bonus and any
payments pursuant to Subsection 9(B) hereof) and any employee benefit,
retirement and compensation plans and other perquisities provided in
Section 5 hereof other than those benefits that Employer may be required to
maintain for Executive under applicable federal or state law.
(6) If Executive's employment by Employer is terminated for any reason
or for no reason, Executive will turn over immediately thereafter to
Employer all business correspondence, letters, papers, reports, customer
lists, financial statements, credit reports or other confidential
information or documents of Employer or its affiliates in the possession or
control of Executive, all of which writings are and will continue to be the
sole and exclusive property of Employer or its affiliates, as the case may
be.
Executive acknowledges that irreparable loss and injury would result to Employer
upon the breach of any of the covenants contained in this Section 10 and that
damages arising out of such breach would be difficult to ascertain. Executive
hereby agrees that, in addition to all other remedies provided at law or in
equity, Employer may petition and obtain from a court of law or equity, without
the necessity of proving actual damages and without posting any bond or other
security, both temporary and permanent injunctive relief to prevent a breach by
Executive of any covenant contained in this Section 10, and shall be entitled to
an equitable accounting of all earnings, profits and other benefits arising out
of any such breach. In the event that the provisions of this Section 10 should
ever be deemed to exceed the time, geographic or any other limitations permitted
by applicable law, then such provisions shall be deemed reformed to the maximum
extent permitted thereby.
11. Notice of Termination and Date of Termination. Any termination of
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Executive's employment with Employer as contemplated by Section 8 hereof, except
in the circumstances of Executive's death, shall be communicated by written
notice of termination by the terminating party to the other party hereto (the
"Notice of Termination"). Any Notice of Termination given pursuant to
Subsections 8(A), 8(B) or 8(D) hereof shall indicate the specific provisions of
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for such termination. For purposes
of this Agreement, "Date of Termination" shall mean: (A) if Executive's
employment is terminated because of disability, thirty (30) days after Notice of
Termination is given (unless Executive shall have returned to the performance of
Executive's duties on a full-time basis during such thirty (30) day period); or
(B) if Executive's employment is terminated for cause, good reason or pursuant
to Subsection 8(C) hereof, the date specified in the Notice of Termination;
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provided, however, that if within thirty (30) days after any such Notice of
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Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally resolved, either
by mutual agreement of the parties or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal therefrom having expired
and no appeal having been perfected).
12. Excess Parachute Payments and One Million Dollar Deduction Limit.
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(A) Notwithstanding anything contained herein to the contrary, if any
portion of the payments and benefits provided hereunder and benefits provided
to, or for the benefit of, Executive under any other plan or agreement of
Employer (such payments or benefits are collectively referred to as the
"Payments") would be subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or
would be nondeductible by Employer pursuant to Section 280G of the Code, the
Payments shall be reduced (but not below zero) if and to the extent necessary so
that no portion of any Payment to be made or benefit to be provided to Executive
shall be subject to the Excise Tax or shall be nondeductible by Employer
pursuant to Section 280G of the Code (such reduced amount is hereinafter
referred to as the "Limited Payment Amount"). Unless Executive shall have given
prior written notice specifying a different order to Employer to effectuate the
Limited Payment Amount, Employer shall reduce or eliminate the Payments, by
first reducing or eliminating those payments or benefits which are not payable
in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as hereinafter defined). Any notice
given by Executive pursuant to the preceding sentence shall take precedence over
the provisions of any other plan, arrangement or agreement governing Executive's
rights and entitlements to any benefits or compensation.
(B) An initial determination as to whether the Payments shall be reduced to
the Limited Payment Amount pursuant to the Code and the amount of such Limited
Payment Amount shall be made by an accounting firm at Employer's expense
selected by Employer which is designated as one of the six largest accounting
firms in the United States (the "Accounting Firm"). The Accounting Firm shall
provide its determination (the "Determination"), together with detailed
supporting calculations and documentation to Employer and Executive within
thirty (30) days of the Termination Date, if applicable, and if the Accounting
Firm determines that no Excise Tax is payable by Executive with respect to a
Payment or Payments, it shall furnish Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to any
such Payment or Payments. Within ten (10) days of the delivery of the
Determination to Executive, Executive shall have the right to dispute the
Determination (the "Dispute"). If there is no Dispute, the Determination shall
be binding, final and conclusive upon Employer and Executive subject to the
application of Subsection 12(C) below.
(C) As a result of the uncertainty in the application of Sections 4999 and
280G of the Code, it is possible that the Payments to be made to, or provided
for the benefit of,
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Executive either have been made or will not be made by Employer which, in either
case, will be inconsistent with the limitations provided in Section 12(A) hereof
(hereinafter referred to as an "Excess Payment" or "Underpayment",
respectively). If it is established pursuant to a final determination of a court
or an Internal Revenue Service (the "IRS") proceeding which has been finally and
conclusively resolved that an Excess Payment has been made, such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the date
Executive received the Excess Payment, and Executive shall repay the Excess
Payment to Employer on demand (but not less than ten (10) days after written
notice is received by Executive), together with interest on the Excess Payment
at the "Applicable Federal Rate" (as defined in Section 1274(d) of the Code)
from the date of Executive's receipt of such Excess Payment until the date of
such repayment. In the event that it is determined (1) by the Accounting Firm,
Employer (which shall include the position taken by Employer, or together with
its consolidated group, on its federal income tax return) or the IRS; (2)
pursuant to a determination by a court; or (3) upon the resolution of the
Dispute to Executive's satisfaction, that an Underpayment has occurred, Employer
shall pay an amount equal to the Underpayment to Executive within ten (10) days
of such determination or resolution, together with interest on such amount at
the Applicable Federal Rate from the date such amount would have been paid to
Executive until the date of payment.
(D) Notwithstanding anything contained herein to the contrary, if any
portion of the Payments would be nondeductible by Employer pursuant to Section
162(m) of the Code, the Payments to be made to Executive in any taxable year of
Employer shall be reduced (but not below zero) if and to the extent necessary so
that no portion of any Payment to be made or benefit to be provided to Executive
in such taxable year of Employer shall be nondeductible by Employer pursuant to
Section 162(m) of the Code. The amount by which any Payment is reduced pursuant
to the immediately preceding sentence, together with interest thereon at the
Applicable Federal Rate, shall be paid by Employer to Executive on or before the
fifth business day of the immediately succeeding taxable year of Employer,
subject to the application of the limitations of the immediately preceding
sentence and this Section 12. Unless Executive shall have given prior written
notice specifying a different order to Employer to effectuate this Section 12,
Employer shall reduce or eliminate the Payments in any one taxable year of
Employer by first reducing or eliminating those payments or benefits which are
not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Section 162(m) Determination (as hereinafter
defined). Any notice given by Executive pursuant to the immediately preceding
sentence shall take precedence over the provisions of any other plan,
arrangement or agreement governing Executive's rights and entitlements to any
benefits or compensation.
(E) The determination as to whether the Payments shall be reduced pursuant
to Section 12(D) hereof and the amount of the Payments to be made in each
taxable year after the application of Section 12(D) hereof shall be made by the
Accounting Firm at Employer's expense. The Accounting Firm shall provide its
determination (the "Section 162(m) Determination"), together with detailed
supporting calculations and documentation to Employer and Executive within
thirty (30) days of the termination date specified in the
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Notice of Termination. The Section 162(m) Determination shall be binding, final
and conclusive upon Employer and Executive.
13. Payments After Death. Should Executive die after termination of his
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employment with Employer while any amounts are payable to him hereunder, this
Agreement shall inure to the benefit of and be enforceable by Executive's
executors, administrators, heirs, distributees, devisees and legatees, and all
amounts payable hereunder shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee or other designee or, if there is no
such designee, to his estate.
14. Full Settlement and Legal Expenses. The respective obligations of the
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parties hereto to make payments or otherwise to perform hereunder shall not be
affected by any rights of set-off, counterclaim, recoupment, defense or other
claim, right or action which one party hereto may have against the other party
hereto. In no event shall Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts which may be payable
to Executive by Employer hereunder. If any legal action, proceeding in
arbitration or other proceeding is brought for the enforcement of this
Agreement, or because of any alleged dispute, breach, default or
misrepresentation in connection with any provision of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees, court costs and all expenses incurred in that action
or proceeding, even if not taxable as court costs, plus in each case interest at
the Applicable Federal Rate, in addition to any other relief to which such party
or parties may be entitled.
15. Notices. For purposes of this Agreement, notices and all other
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communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive: Xxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to Employer: ABC Bancorp
000 Xxxxx Xxxxxx, X.X.
Xxxxxxxx, Xxxxxxx 00000
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
16. Governing Law. The validity, interpretation, and performance of this
-------------
Agreement shall be governed by the laws of the State of Georgia without giving
effect to the conflicts of laws principles thereof.
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17. Successors. Employer shall require any successor (whether direct or
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indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Employer, by agreement in form
and substance reasonably satisfactory to Executive, to expressly assume and
agree to perform this Agreement in the same manner and same extent that Employer
would be required to perform it if no such succession had taken place. Failure
of Employer to obtain such agreement prior to the effectiveness of any such
succession shall be a material intentional breach of this Agreement and shall
entitle Executive to terminate his employment with Employer for good reason
pursuant to Subsection 8(B) hereof. As used in this Agreement, "Employer" shall
mean Employer as hereinbefore defined and any successor to its business or
assets as aforesaid.
18. Modification. No provision of this Agreement may be modified, waived or
------------
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Executive and Employer. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
19. Severability. The invalidity or unenforceability of any provisions of
------------
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.
20. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same agreement.
21. Assignment. This Agreement is personal in nature and neither party
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hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder except as provided in Sections
13 and 17 above. Without limiting the foregoing, Executive's right to receive
compensation hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent or distribution as set forth in Section 13
hereof, and in the event of any attempted assignment or transfer contrary to
this Section 21, Employer shall have no liability to pay any amounts so
attempted to be assigned or transferred.
22. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.
[Signatures Next Page]
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IN WITNESS WHEREOF, Executive has executed, sealed and delivered this
Agreement, and Employer has caused this Agreement to be executed, sealed and
delivered, all as of the day and year first above set forth.
ABC BANCORP
By: /s/ Xxxxxxx X. Xxxxxxxxx
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[Corporate Seal] Xxxxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
Attest: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Secretary
/s/ Xxxx Xxxxxx (SEAL)
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XXXX X. XXXXXX
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