Exhibit 10.3
EMPLOYMENT AGREEMENT
This agreement made and entered into this 20th day of May 2003, between 1st
Georgia Banking Company, located in Franklin, Heard County, Georgia, ("the
Bank") and Xxxxxx X. Xxxxxx ("employee");
WHEREAS, the Bank is a state bank, regulated by the Georgia Department of
Banking and Finance, insured by the Federal Deposit Insurance Corporation, and
located in Franklin, Heard County; and
WHEREAS, the Bank wants to employ employee as Chief Financial Officer of
the Bank; and
WHEREAS, the parties desire to enter into this agreement setting forth the
terms and conditions of the employment relationship of the Bank and the
employee:
NOW, THEREFORE, it is AGREED as follows:
I. RELATIONSHIPS ESTABLISHED AND DUTIES
1. The Bank hereby will employ the employee as Chief Financial Officer to
perform such services and duties as the Board of Directors may, from
time to time, designate during the term hereof. Subject to the terms
and conditions hereof, employee will perform such duties and exercise
such authority as are customarily performed and exercised by persons
holding such office, subject to the general direction of the Board of
Directors of the Bank, exercised in good faith in accordance with
standards of reasonable business judgment.
2. Employee accepts such employment and shall devote her full time,
attention, and efforts to the diligent performance of her duties
herein specified and as an officer and director of the Bank and will
not accept employment with any other individual, corporation,
partnership, governmental authority, or any other entity, or engage in
any other venture for profit, which the Bank may consider to be in
conflict with her or its best interest or to be in competition with
the Bank's business, or which may interfere in any way with the
employee's performance of her duties hereunder. Any exception to this
must be made by notification and approval of the Board.
II. TERMS OF EMPLOYMENT
1. The initial term of employment under this Agreement shall continue for
5 (five) years unless such is terminated pursuant to the terms hereof
or by the first to occur of the conditions to be stated hereinafter.
This Agreement will be automatically extended each year after the
initial term unless either party gives 90 (ninety) days contrary
written notice to the other. The term previously stated
notwithstanding this contract shall be terminated by the earlier to
occur if any of the following:
a. The death of the employee;
b. The complete disability of employee. "Complete disability" as
used herein shall mean the inability of employee, due to illness,
accident or other physical or mental incapacity to perform the
services provided for hereunder for an aggregate of sixty days
within any period of 120 consecutive days during the term hereof;
provided, however, disability shall not constitute a basis for
discharge for cause;
c. The discharge of employee by the Bank for cause. "Cause" as used
herein shall mean:
1) Such negligence or misconduct as shall constitute, as a
matter of law, a breach of the covenants and obligations of
employee hereunder;
2) Failure or refusal of employee to comply with the provisions
of this agreement;
3) Employee being convicted of any duly constituted court with
competent jurisdiction of a crime involving moral turpitude;
or
4) At the discretion of the Board, this contract may be
terminated if there are acts the Board feels are moral
turpitude.
Termination of employee's employment shall constitute a tender by employee
of her resignation as an officer of the Bank. In the event of termination by the
Bank other than for cause, then the employee is entitled to severance pay equal
to two (2) months salary.
III. COMPENSATION
For all services which employees may render to the Bank during the terms
hereof, the Bank shall pay to employee, subject to such deductions as may be
required by law;
1. Base Salary.
An annual salary of $98,000 payable in bi-monthly installments
and subject to such deductions as may be required by law, for the next
12 months. Thereafter, annual increase reviews will be done during the
month of December for a January 1 effective increase date during the
terms of this Agreement so that for the 12 months beginning on each
such anniversary date, the employee's salary increases will take
effect. The annual increase will be not less than the cost of living
index. The Board has sole discretion as to the amount of employee's
compensation.
2. Performance Bonus.
Employee shall be entitled, in an equitable manner based 0 n the
terms of any bonus and incentive plans that have been approved or may,
from time to time, be approved by the Board of Directors to the Bank's
key management employees, to such incentives and discretionary bonus
that may be authorized, declared and paid by the Board of Directors.
3. Stock Options.
At the close of the initial sale of stock, employee will be
awarded stock options exercisable for 15,000 shares of stock. These
options shall vest over a three-year period and expire upon the
earlier of (i) the tenth anniversary of the date of grant or (ii)
three months after employee's termination of employment. The vesting
period shall accelerate in the case of a change in control transaction
or in the event of employee's death. The stock option grant shall be
evidenced by a separate grant agreement between employee and the Bank.
In the event that there is a conflict between this agreement and the
stock option grant agreement, the terms of the stock option grant
agreement shall control.
IV. OTHER BENEFITS
1. The employee shall be entitled to participate in any plan of the Bank,
relating to stock options, stock purchases, profit sharing, group life
insurance, medical coverage, education, or other retirement or
employee benefits that the Bank my adopt for the benefit of its
employees. The employee shall be entitled to a comprehensive annual
physical paid by the bank.
2. The employee shall be eligible to participate in any other benefits
which may be or become applicable to the Bank's executive employees,
shall be furnished with a car with all expenses of maintenance to
cover all automobile use, a reasonable expense account, the payment of
reasonable expenses for attending annual and periodic meetings of
trade associations, and any other benefits which are commensurate with
the responsibilities and functions to be performed by the employee
under this Agreement. Employer also agrees to pay all reasonable
expenses in connection with the attendance and participation at said
trade association meetings by employee's spouse.
3. At such reasonable times as the Board of Directors shall in its
discretion permit, the employee shall be entitled, without loss of
pay, to absent herself voluntarily from the performance of her
employment under this Agreement, all such voluntary absences shall
count as vacation time, provided that:
a. The employee shall be entitled to an annual vacation of 4 (four)
weeks per year.
b. The timing of vacations shall be scheduled in a reasonable manner
by the employee. The employees shall not be entitled to receive
any additional compensation from the Bank on account of her
failure to take a vacation; nor shall she be entitled to
accumulate unused vacation time from one calendar year to the
next.
c. In addition to the aforesaid paid vacations, the employee shall
be entitled, without loss or pay to absent herself voluntarily
from the performance of her employment with the Bank for such
additional periods of time and for such valid and legitimate
reasons as the Board 0 f Directors in its discretion m ay
determine. Further, the Board of Directors shall be entitled to
grant to the employee a leave or leaves of absence with or
without pay at such time or times and upon such terms and
conditions as the Board, in its discretion, may determine.
4. In the event of any attempt by a former employer or employee to enjoin
or seeks damages for employee's employment with the Bank whether by
written demand or by legal action, including but not limited to
actions related to restrictive covenants, trade secrets, and
interference with business relations, the Bank agrees to indemnify
employee in the amount of any judgment, attorney's fees, or costs
incurred by or against employee arising out of such action.
V. CHANGE OF CONTROL
1. If during the term of this Agreement and within one (1) year after a
change in control (as defined in 3 below) the Bank shall terminate
employee without cause (as defined in Section II, paragraph 1, c.) or
employee shall terminate employment for "good reason" (as defined in 4
below), then the employee shall be entitled to receive her salary
through the last day of the calendar month of the termination, or
payment in lieu of the notice period. In addition, the terminated
employee shall receive an amount equal to two (2) times her then
existing annual base salary (the "Severance Payment"). The Severance
Payment shall be in addition to any amount otherwise owed to the
employee pursuant to this Agreement. Employee may also notify Bank (or
its successor) within 90 days after a change of control that she is
terminating her employment, in which case employee shall be entitled
to the Severance Payment.
2. The following items are automatically considered due and payable in
the event that change of control occurs:
a. Non- forfeitable deferred compensation shall be paid out in full.
b. Long-term performance plan objective payments as described in
Section III, 2, shall be declared accomplished and earned based
upon performance up to date of the COC.
c. In the event that the employee is a participant in a restricted
stock plan, or share option plan, and such plan is terminated
involuntarily as a result of the COC, all stock and options shall
be declared 100% vested and distributed.
3. The term "control" shall refer to the acquisition of 25 percent or
more of the voting securities of the Bank by any person, or persons
acting as a group within the meaning of Section 13(d) of the
Securities Exchange Act of 1934 or to such acquisition of a percentage
between 10 percent and 25 percent if the Board of Directors of the
Bank or the Comptroller of the Currency, the FDIC, or the Federal
Reserve Bank have made a determination that such acquisition
constitutes or will constitute control of the Bank. However, a
reorganization of the Bank into a holding company structure where the
Bank's shareholders become shareholders of the holding company in a
pro rata fashion shall not constitute a change in control. The term
"person" refers to an individual, corporation, Bank, bank holding
company, or other entity.
4. The term "good reason" shall mean any of the following:
a. without the written consent of employee, a change in employee's
status, title, position or responsibilities (including reporting
responsibilities) which represents an adverse change from her
status, title, position or responsibilities as in effect at the
date of this agreement or, if greater, at any time thereafter;
the assignment to employee of any duties or responsibilities
which, in employee's reasonable judgment, are inconsistent with
her status, title, position or responsibilities as in effect at
the date of this agreement or, if greater, at any time
thereafter; or any other change in condition or circumstances
that in employee's reasonable judgment makes it materially more
difficult for employee to carry out the duties and
responsibilities of her then-existing office; provided that good
reason under this subparagraph (i) excludes an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Bank promptly after receipt of notice
thereof given by employee;
b. a reduction, without the written consent of employee, in
employee's base salary as in effect on the date of this agreement
or as the same may be increased from time to time, or any failure
to pay employee any compensation or benefits to which she is
entitled within five (5) days of the date due;
c. the failure by the Bank (a) to continue in effect (without
reduction in benefit level and/or reward opportunities) any
compensation or employee benefit plan in which employee
participated as of the date of this agreement, or at any time
thereafter, that is material to employee's total compensation,
unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to
such plan, or (b) to continue employee's participation therein
(or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of
benefits provided and the level of employee's participation
therein relative to other participants;
d. the Bank's requiring employee, without her consent to be based at
any office or location other than in Carrollton, Georgia;
e. the insolvency or the filing by any party, including the Bank or
any of its subsidiaries, of a petition for bankruptcy of the Bank
or any such subsidiary, which petition is not dismissed within
sixty (60) days;
f. any purported termination by the Bank of employee's employment
otherwise than as expressly permitted by this agreement; or
g. the material breach by the Bank of any provision of this
agreement.
Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstance constituting good reason
hereunder.
VI. POST TERMINATION COVENANTS
1. If during the term hereof employee shall cease employment hereunder
for any reason, then employee agrees that for one year following such
termination she will not, without the prior written consent of the
Bank:
a. Directly or indirectly seek or obtain employment with any entity
engaged in the business of banking where employee's duties would
be the same or similar to those services actually performed by
employee for the Bank, provided that the foregoing restriction
shall only apply to the area that falls within a 20-mile radius
of the Bank's primary location in Franklin, Georgia; or
b. Furnish anyone with the name of, or any list or list of customers
of the Bank or utilize such list or information herself for
banking purposes; or
c. Furnish, use, or divulge to anyone any information acquired by
her from the Bank relating to the Bank's methods of doing
business; or
d. Contact directly or indirectly any customer of the Bank with whom
employee had material contact during the 12 months immediately
preceding the termination of employment for banking solicitation
purposes; or
e. Hire for any other Bank or employer (including herself) any
employee of the Bank or directly or indirectly cause such
employees to leave his or her employment to work for another.
2. It is understood and agreed by the parties hereto that the provisions
of this section are independent of each other, and the invalidity of
any such provision or portion thereof shall not affect the validity or
enforceability of any other provisions of this agreement. It is
further agreed that, in the event employee breaches, or threatens to
commit a breach of, any of the provisions of the restrictive covenants
set forth in this Section VI, the Bank shall have the right and remedy
to enjoin, preliminarily and permanently, employee from violating or
threatening to violate the restrictive covenants and to have the
restrictive covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of
the restrictive covenants would cause irreparable injury to the Bank
and that money damages would not provide an adequate remedy to the
Bank. Such right and remedy shall be in addition to, and not in lieu
of, any other rights and remedies available to the Bank in law or in
equity.
VII. WAIVER OF PROVISIONS
Failure of any of the parties to insist, in one or more instances, on
performance by the others in strict accordance with the terms and conditions of
this agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder of the future performance of any such term or condition or of
any other term or condition of this agreement, unless such waiver is contained
in a writing signed by or on behalf of all the parties.
VIII. GOVERNING LAW
This agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to void or unenforceable, the same shall not affect the remaining provisions
thereof.
IX. MODIFICATION AND AMENDMENT
This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior Agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of the parties hereto.
X. COUNTERPARTS AND HEADINGS
This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this agreement.
XI. CONTRACT NON-ASSIGNABLE
This agreement may not be assigned or transferred by any party hereto, in
whole or in part, without the prior written consent of the other except that the
Bank may assign this agreement to a successor in interest provided that such
assignee assumes the Bank's obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the year and date first above written.
1st GEORGIA BANKING COMPANY
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: CEO
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
