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Exhibit 10.3
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, made as of the 30th day of April, 1998, by and between
COMMUNITY BANK OF GEORGIA (hereinafter referred to as the "Bank") and XXXXX X.
XXXXX (hereinafter referred to as "Executive"), establishes a severance
arrangement between the parties in the event of a change of control the Bank or
its parent bank holding company, Georgia Bancshares, Inc. ("Bancshares").
W I T N E S S E T H:
WHEREAS, Executive is currently serving as the Chief Financial Officer
and Vice President of the Bank; and
WHEREAS, the Bank desires that Executive continue to serve as the Chief
Financial Officer and Vice President of the Bank by providing Executive a
measure of security; and
WHEREAS, the Bank wants to continue to have the benefits of Executive's
full time and attention to the affairs of the Bank without diversion due to
concerns about a possible change of control;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, receipt of which is hereby
acknowledged, the Bank and Executive agree as follows:
1. Payment of Severance Amount. If the Executive's employment by the
Bank or any successor of the Bank shall be subject to an Involuntary Termination
within the Covered Period, then the Bank shall pay to the Executive an amount
equal to the Severance Amount, payable within 15 days after the Termination Date
(the date on which Executive's employment with the Bank is discontinued). In
addition, Executive will immediately be entitled to payment of the Severance
Amount if, following a Change of Control, any successor to the Bank refuses to
acknowledge and accept the obligations of the Bank hereunder.
2. Definitions. All the terms defined in this Paragraph 2 shall
have the meaning given below throughout this Agreement.
a. An "Affiliate" shall mean any entity which owned by
controls, is owned by or is under common ownership or control with, the Bank.
b. "Base Annual Salary" shall, as determined on the
Termination Date, be equal to the greater of:
i) the Executive's annual salary excluding
bonuses on the date of the earliest Change
of Control to occur during the Covered
Period; or
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ii) the Executive's annual salary excluding
bonuses on the Termination Date.
c. "Change in Duties" shall mean any one or more of the
following:
i) a significant change in the nature or scope of
the Executive's authorities or duties from those
applicable to him immediately prior to the date on which a
Change of Control occurs;
ii) a reduction in the Executive's Base Annual Salary
from that provided to him immediately prior to the date on
which a Change of Control occurs;
iii) any diminution in the Executive's eligibility to
participate or level of participation in bonus, stock option
and other compensation plans which provide opportunities to
receive compensation, from the greater of:
-the opportunities provided by the Bank for
executives with comparable duties; or
-the opportunities under any such plans
under which he was participating immediately
prior to the date on which a Change of
Control occurs;
iv) a diminution in Executive benefits (including but
not limited to medical, dental, life insurance and long-term
disability plans) and perquisites applicable to Executive,
from the greater of:
-the Executive benefits and perquisites
provided by the Bank to executives with
comparable duties; or
-the Executive benefits and perquisites to
which he was entitled immediately prior to
the date on which a Change in Control
occurs;
v) a change in the location of the Executive's
principal place of employment by the Bank (more than 50 miles
from the location where he was principally employed
immediately prior to the date on which a Change of Control
occurs) to which Executive has not agreed;
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d. A "Change of Control" shall be deemed to have
occurred if:
i) any "person," including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange
Act of 1934 (the "Exchange Act") (other than Bancshares, or
any Executive benefit plan, as defined in ERISA, of any of the
foregoing) is or becomes the beneficial owner, directly or
indirectly, of securities of Bancshares representing 25% or
more of the combined voting power of Bancshares's then
outstanding securities;
ii) as a result of, or in connection with, any tender
offer or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination of
the foregoing transactions (a "Transaction"), the persons who
were directors of the Bank and Bancshares before the
Transaction shall cease to constitute a majority of the Board
of Directors of the Bank or Bancshares or any successor to the
Bank or Bancshares;
iii) the Bank or Bancshares is merged or consolidated
with another corporation and as a result of the merger or
consolidation less than 75% of the outstanding voting
securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former, shareholders of
Bancshares, other than (x) affiliates within the meaning of
the Exchange Act or (y) any party to the merger or
consolidation;
iv) a tender offer or exchange offer is made and
consummated for the ownership of securities of Bancshares
representing 50% or more of the combined voting power of
Bancshares's then outstanding voting securities; or
v) the Bank transfers substantially all of
its assets to another corporation which is not a wholly-
owned subsidiary of Bancshares.
e. "Covered Period" for the Executive shall mean two years
following the occurrence of any Change of Control, including a Change of
Control following another/other Change(s) of Control.
f. "Involuntary Termination" shall mean any termination
during the Covered Period which:
i) does not result from a resignation by the
Executive (other than a resignation pursuant to clause ii)of
this subparagraph (f)); or
ii) results from a resignation submitted to the
Employer in writing within six months following any Change in
Duties; provided, however, the term "Involuntary Termination"
shall not include:
x. a Termination for Cause, or
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y. any termination as a result of death, disability,
or normal retirement pursuant to a retirement plan to
which the Executive was subject prior to any Change
in Control.
g. "Severance Amount" is equal to one hundred percent (100%)
of the Executive's then Base Annual Salary.
h. "Termination for Cause" shall mean only a termination as a
result of fraud, gross negligence, gross dereliction of duties, misappropriation
of or intentional material damage to the property or business of the Bank or
Bancshares or a commission of a felony by the Executive.
3. Notices. Notices and all other communications under this Agreement
shall be in writing and shall be deemed given when personally delivered or
mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Company to:
Community Bank of Georgia
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx
Attention: Secretary of Bancshares, or its successor,
with copies to the President of Bancshares, or
its successor and the President of the Bank,
or its successor.
If to the Executive to:
Xx. Xxxxx X. Xxxxx
Community Bank of Georgia
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000-0000
or to such other address as either party may furnish to the other in writing,
except that notice of changes of address shall be effective only upon receipt.
4. Applicable Law. This contract is entered into under, and
shall be governed for all purposes by, the laws of the State of Georgia.
5. Severability. If a court of competent jurisdiction determines that
any provision of this Agreement is invalid or unenforceable, then the invalidity
or unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement and all other provisions
shall remain in full force and effect.
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6. Withholding of Taxes; Set-Off. The Bank may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
may be required pursuant to any law, governmental regulation or ruling. The
right of Executive to receive benefits under this Agreement, however, shall be
absolute and shall not be subject to any set-off, counterclaim, recoupment,
defense, duty to mitigate, or other rights the Bank may have against him or
anyone else.
7. Not An Employment Agreement; Subsequent Employment. Nothing in this
Agreement shall give the Executive any rights (or impose any obligation) to
continued employment by the Bank or any successor of the Bank or Bancshares, nor
shall it give the Bank any rights (or impose any obligations) for the continued
performance of duties by the Executive for the Bank or any subsidiary or
successor of the Bank or Bancshares. Executive's right to receive benefits under
this Agreement shall not be reduced by Executive's employment with any other
employer after terminating employment with the Bank. Any compensation for
services rendered or consulting fees earned after the date of termination shall
not diminish Executive's right to receive all amounts due hereunder.
8. No Assignment. The Executive's right to receive payments or benefits
under this Agreement shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by will or
by the laws of descent and distribution. In the event of any attempted
assignment or transfer contrary to this paragraph, the Bank shall have no
liability to pay any amount so attempted to be assigned or transferred. This
Agreement will inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
9. Successors. This Agreement shall be binding upon and inure to the
benefit of the Bank, its successors and assigns (including, without limitation,
any company into or with which the Bank or Bancshares may merge or consolidate).
10. Executive's Indemnity. Executive shall be entitled to any indemnity
provided to officers of the Bank immediately prior to the Change of Control. Any
changes to the Bank's bylaws or otherwise which reduce any indemnity granted to
officers shall not affect the rights granted hereunder. The Bank shall not
reduce any of Executive's indemnity benefits without the prior written consent
of Executive. Any references to Georgia law in the bylaws of the Bank or other
documents granting indemnity to Executive shall be deemed to be references as of
the date of this Agreement, and any amendments to Georgia law, including a
revocation thereof, shall not reduce the indemnity benefits granted hereunder.
11. Term. This Agreement shall be effective as of the date first
above-written and shall remain in effect for a period of three years.
Notwithstanding anything herein to the contrary, in the event of a Change of
Control during the initial, or any subsequent, term of this Agreement, this
Agreement shall remain in effect until the later of (a) the end of the term of
the Agreement or (b) the day after the last day in the Covered Period.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
COMMUNITY BANK OF GEORGIA
/s/ Xxx X. Xxxxxx
President and Chief Executive
Officer
EXECUTIVE
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
