Exhibit 10.13
xxxxx.xxx, Inc.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made by and between
xxxxx.xxx, Inc., a unitary thrift holding company (the "Employer"), and Xxxxxxx
X. Xxxxxxxxxxx, an individual resident of Georgia (the "Employee"), as of this
6th day of March, 2000 ("Effective Date").
The Employer presently employs the Employee as its Chief Executive
Officer. The Employer recognizes that the Employee's contribution to the growth
and success of the Employer is substantial. The Employer desires to provide for
the continued employment of the Employee and to make certain changes in the
Employee's employment arrangements which the Employer has determined will
reinforce and encourage the continued dedication of the Employee to the Employer
and will promote the best interests of the Employer and its shareholders. The
Employee is willing to continue to serve the Employer on the terms and
conditions herein provided.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree that on the Effective Date:
1. Employment. The Employer shall continue to employ the Employee, and
the Employee shall continue to serve the Employer, as Chief Executive Officer
upon the terms and conditions set forth herein. The Employee shall have such
authority and responsibilities as are consistent with his position and which may
be set forth in this Agreement or assigned by the Chief Executive Officer
("CEO") or the Board of Directors from time to time. The Employee shall devote
his full business time, attention, skill and efforts to the performance of his
duties hereunder, except during periods of illness or periods of vacation and
leaves of absence consistent with the Employer's policy. The Employee may devote
reasonable periods of time to perform charitable and other community activities
and to manage his personal investments; provided, however, that such activities
will not materially interfere with the performance of his duties hereunder and
will not be in conflict or competitive with, or adverse to, the interests of the
Employer. Under no circumstances will the Employee work for any competitor or
have any financial interest in any competitor of the Employer; provided,
however, that the Employee may invest in up to 1% of the publicly-traded stock
or securities of any company whose stock or securities are traded on a national
exchange.
2. Term. Unless earlier terminated as provided herein, the Employee's
employment under this Agreement shall be for a continuing term (the "Term") of
three years, which shall be extended automatically (without further action of
the Employer or the Employee) 30 days prior to the end of each term for an
additional three years so that the remaining term shall again become three years
unless, prior to any such automatic extension, either party shall deliver
written notice upon the other of its intention that this Agreement shall not be
so extended, in which case the Agreement shall continue through its remaining
term but shall
not be extended absent written agreement by both the Employer and the Employee.
3. Compensation and Benefits.
a. The Employer shall pay the Employee a salary at a rate of not less
than $175,000 per annum in accordance with the salary payment practices of the
Employer. The Board of Directors shall review the Employee's salary at least
annually and may increase the Employee's base salary if it determines in its
sole discretion that an increase is appropriate.
b. The Employee shall participate in any retirement, welfare, deferred
compensation, life and health insurance, and other benefit plans or programs of
the Employer now or hereafter applicable to the Employee or applicable generally
to employees of the Employer, as determined by the Board of Directors.
c. The Employer shall continue to reimburse the Employee for reasonable
travel and other expenses related to the Employee's duties which are incurred
and accounted for in accordance with the Employer's standard business practices.
d. The Employee shall be eligible to receive cash bonuses based on the
Employee's achievement of specified goals and criteria. These goals and criteria
may include both annual and long-term goals, may provide for vesting over a
specified time period, and shall be established annually by the Compensation
Committee of the Board of Directors and attached to and made a part of this
Agreement (the "Bonus Plan"). Unless provided otherwise in any particular Bonus
Plan, each annual award will vest on January 1 of the year following the year
for which the award is earned, provided that the Employee is actively employed
on such date, and each long-term incentive compensation award will vest in equal
portions on January 1 of the three years following the year in which the award
is earned, provided that the Employee is actively employed on each such date.
The Employer shall make payment on any vested bonus within a reasonable period
after vesting thereof.
4. Termination.
a. The Employee's employment under this Agreement may be terminated
prior to the end of the Term only as follows:
(i) upon the death of the Employee;
(ii) upon the disability of the Employee for a period of 180 days
which, in the opinion of the Board of Directors, renders him unable
to perform the essential functions of his job and for which
reasonable accommodation is unavailable. For purposes of this
Agreement, a "disability" is defined as a physical or mental
impairment that substantially limits one or more major life
activities, and a "reasonable accommodation" is one that does not
impose an undue hardship on the Employer;
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(iii) upon the determination of Cause for termination, in which
event such employment may be terminated by written notice at the
election of the Employer. For purposes of this Agreement, "Cause"
shall consist of any of (A) the commission by the Employee of a
willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or
grossly negligent omission to act by the Employee, which is intended
to cause, causes, or is reasonably likely to cause material harm to
the Employer (including harm to its business reputation), (B) the
indictment of the Employee for the commission or perpetration by the
Employee of any felony or any crime involving dishonesty, moral
turpitude or fraud, (C) the material breach by the Employee of this
Agreement that, if susceptible of cure, remains uncured ten days
following written notice to the Employee of such breach, (D) the
exhibition by the Employee of a standard of behavior within the
scope of his employment that is materially disruptive to the orderly
conduct of the Employer's business operations (including, without
limitation, substance abuse or sexual misconduct) to a level which,
in the Board of Directors' good faith and reasonable judgment, is
materially detrimental to the Employer's best interest, that, if
susceptible of cure, remains uncured ten days following written
notice to the Employee of such specific inappropriate behavior, or
(E) the failure of the Employee to render the services hereunder in
accordance with an appropriate performance standard determined in
the sole discretion of the Board of Directors; or
(iv) upon 30 days written notice thereof to the Employee from the
Employer (termination "Without Cause"), provided that in the event
of any such termination Without Cause, Section 4(e) shall be
applicable thereto.
b. If the Employee's employment is terminated because of the Employee's
death, the Employee's estate shall receive any sums due him as base salary
and/or reimbursement of expenses through the end of the month during which death
occurred, plus any bonus earned or accrued under the Bonus Plan through the date
of death (including any amounts awarded for previous years but which were not
yet vested) and a pro rata share of any bonus with respect to the current fiscal
year which had been earned as of the date of the Employee's death.
c. During the period of any incapacity leading up to the termination of
the Employee's employment as a result of disability, the Employer shall continue
to pay the Employee his full base salary at the rate then in effect and all
perquisites and other benefits (other than any bonus) until the Employee becomes
eligible for benefits under any long-term disability plan or insurance program
maintained by the Employer, provided that the amount of any such payments to the
Employee shall be reduced by the sum of the amounts, if any,
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payable to the Employee for the same period under any disability benefit or
pension plan of the Employer or any of its subsidiaries. Furthermore, the
Employee shall receive any bonus earned or accrued under the Bonus Plan through
the date of incapacity (including any amounts awarded for previous years but
which were not yet vested) and a pro rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of the Employee's
incapacity.
d. If the Employee's employment is terminated for Cause as provided
above, or if the Employee resigns (except for a termination of employment
pursuant to Section 4(f)), the Employee shall receive any sums due him as base
salary and/or reimbursement of expenses through the date of such termination,
but Employee will thereby forfeit any rights in any unpaid bonus, including,
without limitation, any bonus amounts awarded for previous years which were not
yet vested and any share of any bonus with respect to the current fiscal year
which had been earned as of the date of such termination or resignation.
e. If the Employee's employment is terminated Without Cause, the
Employer shall pay to the Employee severance compensation in an amount equal to
100% of his then-current monthly base salary each month for one year from the
date of termination, plus any bonus earned or accrued under the Bonus Plan
through the date of termination and a pro rata share of any bonus with respect
to the current fiscal year which had been earned as of the date of the
Employee's termination. However, Section 4(f) shall apply instead of this
Section 4(e) to any termination Without Cause after a Change in Control.
f. Upon a Change in Control, the Employee may terminate his employment
hereunder for any reason upon delivery of notice to the Employer within a 90-day
period beginning upon the occurrence of a Change in Control or within a 90-day
period beginning on the one year anniversary of the occurrence of a Change in
Control. If the Employee terminates his employment pursuant to this Section 4(f)
or if the Employer terminates the Employee Without Cause after a Change in
Control, in addition to other rights and remedies available in law or equity,
the restrictive covenants contained in Section 9 shall not apply and, in
addition, the Employee shall be entitled to the following: (i) the Employer
shall pay the Employee in cash within 15 days of such termination date any sums
due him as base salary and/or reimbursement of expenses through the date of such
termination, plus any bonus earned or accrued under the Bonus Plan through the
date of termination (including any amounts awarded for previous years but which
were not yet vested) and a pro rata share of any bonus with respect to the
current fiscal year which had been earned as of the date of the Employee's
termination (and any forfeiture in other restrictive provisions applicable to
each award shall not apply); and (ii) the Employer shall pay the Employee in
cash within 15 days of such termination date one lump sum payment in an amount
equal to the Employee's then current annual base salary multiplied by the
original full Term (without taking into account the amount of the Term which may
have lapsed by such date).
g. With the exceptions of the provisions of this Section 4, and the
express terms of any benefit plan under which the Employee is a participant,
upon termination of the Employee's employment, the Employer shall have no
obligation to the Employee for, and the Employee waives and relinquishes, any
further compensation or benefits (exclusive of COBRA
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benefits). At the time of termination of employment, the Employee shall enter
into a form of release acknowledging such remaining obligations and discharging
the Employer, as well as the Employer's officers, directors and employees with
respect to their actions for or on behalf of the Employer, from any other claims
or obligations arising out of or in connection with the Employee's employment by
the Employer, including the circumstances of such termination.
h. In the event that the Employee's employment is terminated for any
reason and the Employee serves as a director of the Employer or of any
subsidiary of the Employer, the Employee shall (and does hereby) tender his
resignation from such positions effective as of the date of termination.
i. The parties intend that the severance payments and other
compensation provided for herein are reasonable compensation for the Employee's
services to the Employer and shall not constitute "excess parachute payments"
within the meaning of Section 280G(b) of the Internal Revenue Code of 1986 and
any regulations thereunder. In the event that the Employer's independent
accountants acting as auditors for the Employer on the date of a Change in
Control determine that the payments provided for herein constitute "excess
parachute payments," then the Employee's compensation payable hereunder shall be
decreased, so as to equal an amount that is $1.00 less than three times the
Employee's "base amount," as that term is defined in Section 280G(b) of the
Internal Revenue Code, if, and only if, reducing the Employee's compensation
will put the Employee in a better after-tax position than if the Employee's
compensation was not reduced.
j. Notwithstanding anything to the contrary herein, if the Employee is
suspended or temporarily prohibited from participating in the conduct of the
Employer's affairs by a notice served under section 8(e)(3) or (g)(1) of Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), the Employer's
obligations under this Agreement shall be suspended as of the date of service
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Employer may in its discretion (i) pay the Employee all or part
of the compensation withheld while the obligations under this Agreement were
suspended and (ii) reinstate (in whole or in part) any of such obligations which
were suspended.
k. Notwithstanding anything to the contrary herein, if the Employee is
removed or permanently prohibited from participating in the conduct of the
Employer's affairs by an order issued under section 8 (e)(4) or (g)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)), all obligations
of the Employee under this Agreement shall terminate as of the effective date of
the order, but any vested rights of the parties hereto shall not be affected.
l. Notwithstanding anything to the contrary herein, if the Employer is
in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act),
all obligations under this Agreement shall terminate as of the date of default,
but this paragraph (4)(e) shall not affect any vested rights of the parties
hereto.
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m. Notwithstanding anything to the contrary herein, all obligations
under this Agreement shall be terminated, except to the extent determined that
continuation of this Agreement is necessary for the continued operation of the
Employer, in the following cases:
(a) By the Director of the Office of Thrift
Supervision (the "OTS Director") or his or her designee, at
the time the Federal Deposit Insurance Corporation enters into
an agreement to provide assistance to or on behalf of the
Employer under the authority contained in 13(c) of the Federal
Deposit Insurance Act; or
(b) By the OTS Director or his or her designee, at
the time the OTS Director or his or her designee approves a
supervisory merger to resolve problems related to operation of
the Employer or when the Employer is determined by the OTS
Director to be in an unsafe or unsound condition.
n. Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
5. Ownership of Work Product. The Employer shall own all Work Product
arising during the course of the Employee's employment (prior, present or
future). For purposes hereof, "Work Product" shall mean all intellectual
property rights, including all Trade Secrets, U.S. and international copyrights,
patentable inventions, and other intellectual property rights, in any
programming, documentation, technology, work of authorship or other work product
that relates to the Employer, its business or its customers and that Employee
conceives, develops, or delivers to the Employer or that otherwise arises out of
the services provided by the Employee to the Employer hereunder, at any time
during his employment, during or outside normal working hours, in or away from
the facilities of the Employer, and whether or not requested by the Employer. If
the Work Product contains any materials, programming or intellectual property
rights that the Employee conceived or developed prior to, and independent of,
the Employee's work for the Employer, the Employee agrees to identify the
pre-existing items to the Employer, and the Employee grants the Employer a
worldwide, unrestricted, royalty-free right, including the right to sublicense
such items. The Employee agrees to take such actions and execute such further
acknowledgments and assignments as the Employer may reasonably request to give
effect to this provision.
6. Protection of Trade Secrets. The Employee agrees to maintain in
strict confidence and, except as necessary to perform his duties for the
Employer, the Employee agrees not to use or disclose any Trade Secrets of the
Employer during or after his employment. For the purposes hereof, "Trade Secret"
means information, including, without limitation, technical or non-technical
data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a process, a drawing, financial data, financial plans, product plans,
information on customers or a list of actual or potential customers or
suppliers, which: (i) derives economic value,
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actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
7. Protection of Other Confidential Information. In addition, the
Employee agrees to maintain in strict confidence and, except as necessary to
perform his duties for the Employer, not to use or disclose any Confidential
Business Information of the Employer during his employment and for a period of
24 months following termination of the Employee's employment. "Confidential
Business Information" shall mean any internal, non-public information (other
than Trade Secrets already addressed above) concerning the Employer's financial
position and results of operations (including revenues, assets, net income,
etc.); annual and long-range business plans; product or service plans; marketing
plans and methods; training, educational and administrative manuals; customer
and supplier information and purchase histories; and employee lists. The
provisions of Sections 6 and 7 above shall also apply to protect Trade Secrets
and Confidential Business Information of third parties provided to the Employer
under an obligation of secrecy.
8. Return of Materials. The Employee shall surrender to the Employer,
promptly upon its request and in any event upon termination of the Employee's
employment, all media, documents, notebooks, computer programs, handbooks, data
files, models, samples, price lists, drawings, customer lists, prospect data, or
other material of any nature whatsoever (in tangible or electronic form) in the
Employee's possession or control, including all copies thereof, relating to the
Employer, its business, or its customers. Upon the request of the Employer,
Employee shall certify in writing compliance with the foregoing requirement.
9. Restrictive Covenants.
a. No Solicitation of Customers. During the Employee's employment with
the Employer and for a period of 24 months thereafter, the Employee shall not
(except on behalf of or with the prior written consent of the Employer), either
directly or indirectly, on the Employee's own behalf or in the service or on
behalf of others, solicit or attempt to solicit Customers to induce or encourage
them to acquire or obtain from anyone other than the Employer or its
subsidiaries any product or service competitive with or substitute for any of
the Employer's Products. For purposes of this Section, "Customer" refers to any
person or group of persons with whom the Employee had direct material contact
with regard to the selling, delivery, or support of the Employer's Products,
including servicing such person's or group's account, during the period of 12
months preceding the solicitation date. The "Employer's Products" refers to the
products and services that the Employer or any of its subsidiaries or affiliates
offered or sold within six months of the solicitation date. This restriction
does not apply after a Change in Control.
b. No Recruitment of Personnel. During the Employee's employment with
the Employer and for a period of 24 months thereafter, the Employee shall not,
either directly or indirectly, on the Employee's own behalf or in the service or
on behalf of others, solicit or induce any employee of or consultant to the
Employer or any of its subsidiaries or affiliates to leave his or her position
with the Employer (or the subsidiary or affiliate), or recruit or attempt to
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recruit such persons to accept employment or any other position with another
business. This restriction does not apply after a Change in Control.
c. Independent Provisions. The provisions in each of the above Sections
9(a) and 9(b) are independent, and the unenforceability of any one provision
shall not affect the enforceability of any other provision.
10. Successors; Binding Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the Employer and its successors and assigns.
Neither this Agreement nor any right or interest hereunder shall be assignable
or transferable by the Employee, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Employee's legal personal
representative.
11. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all
notices to the Employer shall be directed to the attention of the Employer with
a copy to the Secretary of the Employer. All notices and communications shall be
deemed to have been received on the date of delivery thereof.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Georgia.
13. Non-Waiver. Failure of the Employer to enforce any of the
provisions of this Agreement or any rights with respect thereto shall in no way
be considered to be a waiver of such provisions or rights, or in any way affect
the validity of this Agreement.
14. Enforcement. The Employee agrees that in the event of any breach or
threatened breach by the Employee of any covenant contained in Section 6, 7,
9(a), or 9(b) hereof, the resulting injuries to the Employer would be difficult
or impossible to estimate accurately, even though irreparable injury or damages
would certainly result. Accordingly, an award of legal damages, if without other
relief, would be inadequate to protect the Employer. The Employee, therefore,
agrees that in the event of any such breach, the Employer shall be entitled to
obtain from a court of competent jurisdiction an injunction to restrain the
breach or anticipated breach of any such covenant, and to obtain any other
available legal, equitable, statutory, or contractual relief. Should the
Employer have cause to seek such relief, no bond shall be required from the
Employer, and the Employee shall pay all attorney's fees and court costs which
the Employer may incur to the extent the Employer prevails in its enforcement
action.
15. Saving Clause. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision or clause of this Agreement, or portion
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thereof, shall be held by any court or other tribunal of competent jurisdiction
to be illegal, void, or unenforceable in such jurisdiction, the remainder of
such provision shall not be thereby affected and shall be given full effect,
without regard to the invalid portion. It is the intention of the parties that,
if any court construes any provision or clause of this Agreement, or any portion
thereof, to be illegal, void, or unenforceable because of the duration of such
provision or the area or matter covered thereby, such court shall reduce the
duration, area, or matter of such provision, and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
16. Certain Definitions.
a. "Change in Control" shall mean the occurrence during the Term of any
of the following events, unless such event is a result of a Non-Control
Transaction:
(i) The individuals who, as of the date of this Agreement, are
members of the Board of Directors of the Employer (the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board of Directors of the Employer; provided, however, that if
the election, or nomination for election by the Employer's
shareholders, of any new director was approved in advance by a
vote of at least a majority of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered as a
member of the Incumbent Board.
(ii) An acquisition (other than directly from the Employer) of any
voting securities of the Employer (the "Voting Securities") by any
"Person" (as the term "person" is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934) immediately
after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50%
or more of the combined voting power of the Employer's then
outstanding Voting Securities.
b. "Non-Control Transaction" shall mean a transaction described below:
(i) the shareholders of the Employer, immediately before such
merger, consolidation or reorganization, own, directly or
indirectly, immediately following such merger, consolidation or
reorganization, at least 50% of the combined voting power of the
outstanding voting securities of the corporation resulting from
such merger, consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation or reorganization; and
(ii) immediately following such merger, consolidation or
reorganization, the number of directors on the board of directors
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of the Surviving Corporation who were members of the Incumbent
Board shall at least equal the number of directors who were
affiliated with or appointed by the other party to the merger,
consolidation or reorganization.
17. 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.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Employee has signed and sealed this Agreement, effective as
of the date first above written.
xxxxx.xxx, Inc.
By: ______________________________
Name:
Title:
EMPLOYEE
___________________________________
Xxxxxxx X. Xxxxxxxxxxx
