Exhibit 10.4
Amended and Restated Employment Agreement dated September 17, 2001 between J.
Xxxxxx Xxxxxx, Xx. and Chestatee Bancshares and Chestatee State Bank
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 17th day
of September, 2001, between CHESTATEE BANCSHARES, INC., a Georgia corporation
(the "Company"), CHESTATEE STATE BANK (the "Bank") (the "Company" and the "Bank"
referred to collectively as the "Employer"), a Georgia banking corporation
chartered through the GEORGIA DEPARTMENT OF BANKING AND FINANCE ("DBF"); and
XXXX XXXXXX XXXXXX, XX., ("Employee").
WHEREAS, Bank and Employee did execute and Employment Agreement dated May
18, 1997 (the "Original Agreement"); and
WHEREAS, the Company has subsequently been organized for the purpose of
holding 100% of the equity securities of the Bank, and the parties are desirous
of amending and restating the Agreement as well as to extend the term and make
changes to other portions of the Original Agreement.
NOW THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. RELATIONSHIP AND DUTIES
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1.1 Employer hereby employs Employee as President, Chief Executive Officer,
and a Director of both the Company and the Bank. Employee shall be expected to
perform such services as are generally performed by the President and Chief
Executive Officer of a commercial bank and a bank holding company. The services
to be performed may be extended or curtailed from time to time at the direction
of the Board of Directors of the Company or the Bank (collectively, the "Board")
during the term of this Agreement, provided, however, such duties shall not be
extended or curtailed in such fashion as to alter the duties and
responsibilities generally expected of a President and Chief Executive Office of
a commercial bank or a bank holding company.
1.2 Employee shall serve on the Board and as a member of its Executive
Committee and on such other committees as the Board may designate, subject to
the terms hereof.
1.3 Employee accepts such employment and shall during the term of this
Agreement devote his full time, attention, and best efforts to the diligent
performance of his duties herein specified and as an officer and director of
Employer and will not accept employment with any other individual, corporation,
partnership, governmental authority or other entity, or engage in any other
venture for profit which employer may consider to be in conflict with his or its
best interest or to be in competition with employer's business, or which may
interfere in any way with the employee's performance of his duties hereunder.
1.4 Whenever the term "Employer" is used herein, that term shall be deemed
synonymous with the terms "the Company," "the Bank" or "the Board," whenever the
context so requires.
1.5 Employer shall not require Employee, as a part of his duties under this
Agreement, to perform or to participate in any activity which constitutes a
violation of any state or federal law, rule, ordinance or regulation.
2. TERM OF EMPLOYMENT
2.1 Employee's employment hereunder shall continue through December 31,
2004, unless terminated or extended pursuant to the terms hereof (the
"Employment Period"). Unless this Agreement is terminated earlier pursuant to
Section 2.2(b), (c), (d), (e) or (f), this Agreement shall automatically renew
for additional periods of one year each; provided, however, that this Agreement
shall in all events expire on December 31, 2009, unless the parties mutually
agree in writing to an extension beyond such date.
2.2 Notwithstanding any provision contained herein, Employee's employment
pursuant to this Agreement shall be terminated by the first to occur of any of
the following:
(a) December 31, 2009.
(b) The death of Employee.
(c) The complete disability of Employee. "Complete Disability" as used
herein shall mean the inability of Employee, due to illness, accident, or
any other physical or mental incapacity, to completely fulfill his
obligations hereunder for an aggregate of sixty (60) days within any period
of one hundred twenty (120) consecutive days during the term hereof.
(d) The discharge of Employee by Employer for cause. "Cause" as used
herein shall include conviction of a crime, which is either a felony or
misdemeanor other than any minor traffic violation, unethical business
conduct that is directly related to Employee's activities on behalf of
employer and that may cause harm to the business interests of Employer, or
repeated refusal to carry out the written directions of the Board. Should
Employer believe that any violation of Employee's obligations hereunder has
occurred, written notice of the alleged violation shall be provided by
Employer to Employee and Employee shall have thirty (30) days to cure such
alleged violation, provided that the alleged violation is subject to being
cured and is neither dishonest nor criminal. Termination for Cause will
require a two-thirds majority vote of the Board, exclusive of employee.
Termination of Employee's employment for Cause shall include termination as
an employee and officer of Employer. The determination of whether the
Employee shall have cured any violation subject to the foregoing provisions
shall be made in the sole determination of the Board.
(e) The termination of the Agreement without Cause. Termination
without Cause shall require a two-thirds majority vote of the Board,
exclusive of Employee. Termination of the Agreement without Cause shall
include termination as an employee and officer of Employer. Termination
without Cause shall be effective at 11:59 p.m. on December 31 of the
calendar year immediately following the year in which Notice of Termination
is given; provided, however, that in no event shall such a termination be
effective prior to 11:59 p.m. on December 3, 2004. Notwithstanding the
foregoing, Employer may following delivery of Notice of Termination
pursuant to this subparagraph relieve the Employee of such duties as
Employer may determine so long as Employee is not required to perform
duties not otherwise generally required or expected to be performed by a
president of a bank.
(f) The Employee's voluntary resignation. The Employee may voluntarily
resign his position and terminate his employment with the Company at any
time by delivery of a written notice of resignation to the Company (the
"Notice of Resignation"). The Notice of Resignation shall set forth the
date such resignation shall become effective (the "Date of Resignation"),
which date shall, in any event, be at least ten (10) days but not more than
thirty (30) days from the date the Notice of Resignation is delivered to
the Company. At its option, the Company may reduce such notice period to
any length, upon written notice to the Employee.
2.3 Notice. Any termination of the Employee's employment by the Company
shall be communicated by written Notice of Termination to the Employee. For
purposes of this Agreement, a "Notice of Termination" shall, to the extent
required, mean a notice that shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
2.4 "Date of Termination" shall mean (i) if the Employee's employment is
terminated by death, the date of is death, (ii) if the Employee's employment is
terminated by reason of his disability, the date determined by the Board as the
date on which Employee satisfied the definition without Cause of Complete
Disability, (iii) if the Employee's employment is terminated by the Company for
Cause or pursuant to subsection 2.2(d) above, the date specified in the Notice
of Termination, (iv) if the Agreement is terminated pursuant to Section 2.2(e)
the date of termination determined therein, and (v) if the Employee voluntarily
resigns pursuant to subsection 2.2(f) above, the Date of Resignation.
2.5 Termination Obligations.
(a) The Employee hereby acknowledges and agrees that all personal
property and equipment furnished to or prepared by the Employee in the
course of or incident to his employment belongs to the Company and shall be
promptly returned to the Company upon termination of the Employment Period.
Following termination, the Employee will not retain any written or other
tangible material containing any proprietary information of the Company.
(b) Upon termination of the Employment Period, the Employee shall be
deemed to have resigned from all offices and directorships then held with
the Company, the Bank or any affiliate of either.
(c) The representations and warranties contained herein
and the Employee's obligations under Sections 2.5, 2.6, 9, 10 and 11
shall survive termination of the Employment Period and the expiration
of this Agreement.
2.6 Release. In exchange for the Employer entering into the Agreement, the
Employee agrees that, at the time of his resignation or termination from the
Company and the Bank, he will resign from the Board of each and will execute a
release acceptable to the Employer of all liability of the Company and Bank and
their affiliates, officers, shareholders, employees and directors to the
Employee in connection with or arising out of his employment, except with
respect to any then-vested rights under the Stock Option Plan and except with
respect to any severance payments which may be payable to him under the terms of
the Agreement.
2.7 In the event of termination, the Company's obligations to Employee
shall be limited to:
(a) Expiration of Contract. If the Employee's employment shall be
terminated pursuant to the natural termination of this Agreement on
December 31, 2009, the Company shall pay the Employee his base salary
payable through the Date of Termination. At the Employee's own expense, the
Employee and his dependents shall also be entitled to any continuation of
health coverage rights under applicable law.
(b) Death. If the Employee's employment shall be terminated pursuant
to Section 2.2(b), the Company shall pay the Employee's personal
representative his base salary payable through the Date of Termination. At
their own expense, the Employee's dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable law.
(c) Disability. If the Employee's employment shall be terminated by
reason of disability pursuant to Section 2.2(c), the Employee shall be
treated as if this Agreement were terminated pursuant to Section 2.2(e) on
the Date of Termination due to his disability, and he shall receive his
base salary for the period described in Section 2.7(e), provided that such
payments to the Employee during the disability shall cease at the time
payment(s) under any disability benefit plan of the Employer begin. The
determination of disability shall constitute the notice to terminate
described in Section 2.1. At the Employee's own expense, the Employee and
his dependents shall also be entitled to any continuation of health
insurance coverage rights under any applicable law.
(d) Cause. If the Employee's employment shall be terminated for Cause
pursuant to Section 2.2(d) hereof, the Company shall pay the Employee his
base salary only through the Date of Termination. At the Employee's own
expense, the Employee and his dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable law.
(e) Other Terminations by the Company. If the Company shall terminate
the Employee's employment without Cause pursuant to Section 2.2(e) hereof,
the Company shall pay the Employee his base salary through the term of the
Agreement. At the Employee's own expense, the Employee and his dependents
shall also be entitled to any continuation of health insurance coverage
rights under any applicable law.
(f) Voluntary Resignation. If the Employee terminates his employment
with the Company pursuant to Section 2.2(f) hereof for "Good Cause", the
Company shall pay the Employee his base salary through the term of the
Agreement determined as if his Notice of Termination was a Notice of
Termination Without Cause by the Company as described in Section 2.2(e). If
the Employee terminates his employment with the Company pursuant to Section
2.2(f) hereof without "Good Cause," the Company shall have no obligation to
compensate the Employee following the term of the Agreement as determined
above. In any event, at the Employee's own expense, the Employee and his
dependents shall be entitled to any continuation of health insurance
coverage rights under any applicable law.
For purposes of this Agreement, "Good Cause" shall mean, without the
express written consent of Employee, the occurrence of any of the following
events occurring not more than twelve (12) months prior to the Employee's
notice to the Company of his intent to terminate unless such events are
substantially corrected within 30 days following written notification by
Employee to the Company that he intends to terminate his employment
hereunder for one of the reasons set forth below:
(i) any transaction, whether by merger, consolidation, asset
sale, tender offer, reverse stock split, or otherwise, which results
in the acquisition or beneficial ownership (such as term is defined
under rules and regulations promulgated under the Securities Exchange
Act of 1934, as amended) by any person or entity or any group of
persons or entities acting in concert, of 50% or more of the
outstanding shares of Common Stock of the Company;
(ii) the sale of all or substantially all of the assets of the
Company; or
(iii) the liquidation of the Company.
(g) Notwithstanding the provisions of subparagraphs (e) and (f)
immediately above, in the event that either the Employer shall terminate
the Employee's employment without cause pursuant to Section 2.2(e) hereof,
or the Employee terminates his employment with the Employer pursuant to
Section 2.2(f) hereof for "Good Cause," and, prior to such termination
there has been a Change in Control, as hereinafter defined, then the period
for which the Employer shall be responsible to pay the Employee his base
salary shall, notwithstanding any other provision of this Agreement, be not
less than eighteen months from the date that the Change in Control
occurred. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if either of the events described in Section
2.7(f)(i) or (ii) shall occur.
3. COMPENSATION
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For all services that Employee may render to Employer during the term
hereof, Employer shall pay to Employee, subject to such deductions as may be
required by law, according to the following schedule:
3.1 Base Salary: Commencing of the Effective Date hereof, Employee shall
receive for the term of this Agreement an annual salary of $143,325, payable in
at least monthly installments, subject to such deductions as may be required by
law. Employee will receive a 5% annual increase in base salary with first
increase effective January 1, 2002.
3.2 Performance Bonus: Employee shall also be eligible to receive a
performance bonus of up to 40% of his base salary payable each year. For the
year ending December 31, 2001, the performance bonus shall be based upon the
criteria as established in the Original Agreement. For years beginning with
January 1, 2002, the performance bonus shall be based upon a formula to be
established by the Compensation Committee of the Board during the last calendar
quarter of each fiscal year immediately preceding the applicable bonus year. The
formula shall be determined by the Compensation Committee based upon discussions
with the Board and with the Employee, taking into consideration the business and
fiscal goals of the Company, the budgeted performance for the Company for the
applicable fiscal year, and such other objective or subjective criteria as the
Committee may establish. Regardless of whether any standard for the payment of a
bonus is met, no bonus shall be payable for any fiscal year in which the Bank
receives a CAMEL 3, 4 or 5 rating at the most recent examination, provided that
such bonus will be paid in the event that the Bank does receive a CAMEL 1 or 2
rating at the first examination in the following calendar year.
4. OTHER BENEFITS
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During the term of Employee's employment hereunder (except as noted in
this paragraph) Employer shall furnish to Employee: (i) an automobile of his
choice having a net cost not to exceed a level established by the Employer which
may be leased or purchased by the Employer, (ii) a term life insurance policy
providing for death benefits of $1,000,000.00 having a beneficiary designated by
Employee, (iii) Employer will use commercially reasonable efforts to provide
additional retirement benefits through an insured defined contribution plan to
the extent economically feasible and later approved by the Board, (iv) a group
health and hospitalization insurance policy covering Employee at no cost to
Employee other than such deductible as may be applicable to all other employees
of the Bank, and, if Employee desires, covering the dependents and spouse of
Employee at no cost to Employee, (v) a long-term disability insurance policy, as
generally defined in the insurance industry, providing for benefits of at least
sixty percent (60%) of Employee's annual base salary (the long-term disability
policy will be as consistent as is reasonably possible with the definition of
"complete disability" provided in paragraph 2(c) above), and (vi) an annual
vacation leave of three (3) weeks per year with one additional day for each year
of service to the Employer up to four (4) weeks, to be taken at the discretion
of Employee. The parties acknowledge that Employee may participate in other
benefit programs and may from time to time be granted additional benefits not
described herein if determined to be appropriate by the Board.
5. STOCK OPTIONS
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Pursuant to the Original Agreement, Employee was granted an option, subject
to certain terms and conditions, to buy up to 5,000 shares of Bank common stock
during each of the first five years of Bank operations. The parties acknowledge
that subsequent to the Original Agreement, the Bank has become a wholly-owned
subsidiary of the Company, and the Employee and Employer agree that the options
to acquire Bank common stock have been converted into options to acquire the
common stock of the Company. Further, the Company has subsequently split its
common stock by distributing one additional share on the basis of two shares for
each one share previously held. Consequently, the Employees' options granted
under the Original Agreement to acquire 5,000 shares of Bank common stock have
been converted into options to acquire 10,000 shares of Company common stock.
Such options shall continue to vest and be treated in accordance with the terms
of the Original Agreement unless modified through the execution of a separate
stock option agreement between the parties.
6. EXPENSES
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Upon Employee's presentment to Employer of expense reports acceptable to
Employer and in sufficiently detailed form to comply with standards for
deduction of business expenses established from time to time by the Internal
Revenue Service, Employer will reimburse Employee for, such expenses approved by
Employer and incurred by Employee in connection with the performance of his
duties hereunder, including reimbursement for a country club and appropriate
civic club dues.
7. CONVENTIONS
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Employer will permit Employee to attend to a GBA and/or CBA banking
convention of Employee's choice and Employer agrees to pay all expenses
associated with such attendance for both Employee and his spouse. Employer
agrees to pay Employee's expenses for appropriate seminars and meetings.
8. SEVERABILITY
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The parties hereto understand and agree that the provisions of this
Agreement are independent of each other, and to the extent any provision or
portion thereof shall be determined by a court of competent jurisdiction to be
void or unenforceable, such determination shall not affect the validity or
enforceability of any other provision or the remainder of this Agreement.
9. WAIVER OF PROVISIONS
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Failure by any of the parties hereto to insist, in one or more instances,
on performance by the other in strict accordance with the terms and conditions
of this Agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder or of the obligation of future performance of any right
granted hereunder or of the obligation of future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in writing signed by or on behalf of all of the parties.
10. GOVERNING LAW
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This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
11. MODIFICATION AND AMENDMENT
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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 all parties hereto.
12. COUNTERPARTS AND HEADINGS
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This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed on original, but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience or reference and shall not be deemed part of this Agreement.
13. SUCCESSORS
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This Agreement shall inure to the benefit of and be binding upon Employer,
its successors and assigns and upon Employee, his heirs, executors,
administrators, and personal representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first written above.
EMPLOYEE:
/s/ Xxxx Xxxxxx Xxxxxx, Xx.
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Xxxx Xxxxxx Xxxxxx, Xx.
BANK:
CHESTATEE STATE BANK
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Chairman
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COMPANY:
CHESTATEE BANCSHARES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Chairman
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