EMPLOYMENT TERMINATION AGREEMENT
Exhibit
10.1
THIS EMPLOYMENT TERMINATION
AGREEMENT (the "Agreement") is made and entered into by and between X.
XXXXX XXXXX, JR., an individual, on behalf of himself, his spouse, agents,
representatives, attorneys, assignees, heirs, executors, administrators,
beneficiaries and trustees ("WELSH"), and PAB BANKSHARES, INC. (the “COMPANY”)
and THE PARK AVENUE BANK (the “BANK”) on behalf of themselves, their
predecessors, successors, all former, current and future related companies,
divisions, subsidiaries, affiliates and parents, and collectively, their former,
current and future directors, officers, employees, agents, representatives,
attorneys, fiduciaries, assignees, heirs, executors, administrators,
beneficiaries and trustees (the “COMPANIES”). WELSH and the
COMPANIES are sometimes referred to together as the “parties” or individually as
a “party.”
WITNESSETH:
WHEREAS, WELSH is employed as
the President and Chief Executive Officer of the COMPANIES pursuant to an
Employment Agreement dated May 1, 2008 (the “Employment Agreement”), between
WELSH and the COMPANIES; and
WHEREAS, WELSH and the
COMPANIES desire to fully and finally terminate the Employment Agreement and
resolve any and all obligations that each may have against the other under the
Employment Agreement or otherwise in an amicable manner;
NOW, THEREFORE, in
consideration of the mutual covenants and promises each party has made to the
other as set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
WELSH and the COMPANIES agree as follows:
1.
Termination of Employment and
Employment Agreement. Effective on the date that this Agreement is
executed by both parties (the “Termination Date”), WELSH resigns his employment
with the Companies and further resigns as President, Chief Executive Officer and
Director of the COMPANIES. Except as provided herein, the terms
of the Employment Agreement shall terminate as of the Termination
Date.
2.
General Waiver And
Release. WELSH fully and completely waives, releases, and
forever discharges the COMPANIES from any and all claims, charges, complaints,
actions, causes of action, grievances, controversies, demands, agreements,
contracts, covenants, promises, liabilities, judgments, obligations, debts,
damages (including, but not limited to, actual, compensatory, exemplary and
punitive damages), attorneys' fees and costs and/or any other liabilities of any
kind, nature, description or character which he may have against the COMPANIES
arising out of WELSH’S employment with the COMPANIES, the termination of his
employment with the COMPANIES, and/or any other occurrence whatsoever before the
date that WELSH executes this Agreement, whether known or unknown, suspected or
concealed, and whether presently asserted or otherwise, including, but not
limited to, all claims that the COMPANIES:
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violated
public policy or common law (including claims for breach of contract,
promissory estoppel, detrimental reliance, retaliatory discharge, personal
injury, invasion of privacy, negligent hiring, retention or supervision,
defamation, intentional or negligent infliction of emotional distress
and/or mental anguish, intentional or tortious interference with contract,
negligence, or loss of consortium);
or
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Exhibit
10.1
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violated
their personnel policies or handbooks, or any purported contract of
employment, express or implied, between WELSH and the COMPANIES;
or
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failed
to provide WELSH with any severance pay or other benefits pursuant to the
terms of any employee benefit plan or arrangement of the COMPANIES,
violated the terms of any such employee benefit plan, breached any
fiduciary obligation with respect to such plan or arrangement, or
discriminated against WELSH for the purpose of preventing WELSH from
obtaining benefits pursuant to the terms of any such plan or arrangement,
or in any way violated any provision of the Employee Retirement Income
Security Act, as amended, 29 U.S.C. § 1001 et seq.;
or
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retaliated
against or discriminated against WELSH on the basis of age, sex (including
sexual harassment), race, disability, handicap, national origin, age,
ancestry, religion, sexual orientation, marital status, parental status,
caregiver status, source of income, or any other basis in violation of any
city, local, state or federal laws, ordinances, executive orders,
regulations or constitutions or otherwise violated any city, local, state,
or federal laws, ordinances, executive orders, regulations or
constitutions, including Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. § 2000e et seq., the Fair
Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., the
Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the
Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Equal
Pay Act, 29 U.S.C. § 206(d), and the Age Discrimination in Employment Act
of 1967, as amended, 29 U.S.C. § 621 et seq.
(“ADEA”).
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For the
purpose of implementing a full and complete waiver and release, WELSH expressly
acknowledges that the waiver and release he gives in this Agreement is intended
to include in its effect, without limitation, claims that he did not know or
suspect to exist in his favor at the time WELSH executes this Agreement,
regardless of whether the knowledge of such claims, or the facts upon which they
might be based, would materially have affected the settlement of this matter,
and that the consideration given under the Agreement was also for the waiver and
release of those claims and contemplates the extinguishment of any such unknown
claims.
3.
Covenant Not To
Xxx. XXXXX also agrees not to xxx the COMPANIES, either
individually or collectively, in any forum for any claim covered by the waiver
and release set forth in Paragraph 2, except that WELSH may bring a claim under
the ADEA to challenge this Agreement. If WELSH violates this
Agreement by suing the COMPANIES, other than under the ADEA to challenge this
Agreement, WELSH shall be liable to the COMPANIES for their reasonable
attorneys’ fees and other litigation costs incurred in defending against such a
lawsuit.
4.
Rights And Claims Excluded From
Waiver And Release. This Agreement does not waive any rights
that cannot be waived by law, including WELSH’S right to file an administrative
charge of discrimination. WELSH is waiving, however, any right to
monetary recovery should any administrative agency (such as the Equal Employment
Opportunity Commission) pursue any claims on his behalf.
5.
Non-Admission Of
Liability. WELSH acknowledges that nothing contained in this
Agreement, nor any of the acts taken thereunder, shall be deemed or construed as
an admission of liability of any violation of any applicable law, ordinance,
order, regulation, or constitution of any kind.
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Exhibit
10.1
6.
Future
Cooperation. Upon reasonable advance notice from the
COMPANIES, following the Termination Date, WELSH shall make himself available to
the COMPANIES or their designated representatives for the purposes
of: (a) providing information regarding the projects, files, and
matters on which WELSH worked for the purpose of transitioning such projects;
and (b) providing information and/or testimony regarding any other matter, file,
project, and/or client with whom WELSH was involved while employed with the
COMPANIES.
7.
Future
Assurance. Upon a reasonable request by the COMPANIES, WELSH
agrees to take any and all actions, including, without limitation, the execution
of certificates, documents, or instruments necessary or appropriate to give
effect to the terms and conditions set forth in this Agreement.
8.
Consideration.
(a) In
consideration for WELSH’S agreement to terminate the Employment Agreement, to
fully release the COMPANIES from any and all claims under the Employment
Agreement or otherwise, and the other duties and obligations of WELSH contained
herein, the parties agree, subject to Paragraph 18 below, that the BANK shall
pay severance to WELSH in a total, gross amount of Seven Hundred Thirty Thousand
Dollars ($730,000), less any amounts required to be withheld under applicable
law. The COMPANIES will issue to WELSH an IRS Form W-2 indicating the
amount withheld under applicable law. Such payment shall be made as
soon as administratively feasible following the expiration of the revocation
period applicable to this Agreement, but in no event later than May 30,
2009.
(b) Notwithstanding
anything else contained herein to the contrary, no payment shall be made or
benefits delivered under this Agreement (other than payments required to be made
by the COMPANIES pursuant to Paragraph 9 below) unless and until the applicable
revocation period to this Agreement has expired without WELSH having elected to
revoke the Release. WELSH agrees and acknowledges that he would not
be entitled to the consideration described herein absent execution of this
Agreement.
9.
Other Benefits.
(a) Nothing
in this Agreement shall:
(i)
alter or reduce any vested, accrued benefits (if any) WELSH may be
entitled to receive under any 401(k) plan established by the COMPANIES, which
shall be paid in accordance with the terms of the 401(k) plan;
(ii) affect
WELSH’S right (if any) to elect and pay for continuation of WELSH’S health
insurance coverage under COMPANIES’ health plans pursuant to the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) or other applicable law
concerning health care continuation coverage;
(iii) affect
WELSH’S right (if any) to receive (i) any Base Salary, as defined in the
Employment Agreement, that accrues through the Termination Date but is unpaid,
(ii) any reimbursable expenses that WELSH incurs before the Termination Date but
are unpaid, provided Welsh has provided substantiation of such expenses,
(iii) any unused paid time off days (including vacation days) accrued
through the Termination Date, all of which shall be paid as soon as
administratively practicable (and in any event within thirty (30) days) after
the Termination Date;
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Exhibit
10.1
(iv) affect
WELSH’s right to continue to receive his health care benefits through the
Termination Date, as in effect as of the date hereof, which health care benefits
will continue through the Termination Date, except with respect to any changes
in benefits that are applicable generally to the other executives of the
COMPANIES; or
(vi) alter
or reduce the vested benefits to which WELSH is entitled under any of the
COMPANIES’ other benefit plans (including any stock option plans), which shall
be paid in accordance with the terms of those plans.
10. Additional
Consideration.
(a) Mutual
Confidentiality. The parties agree that,
as a condition of, and as further consideration for, this Agreement, they shall
keep strictly confidential the circumstances leading up to the termination of
WELSH’S employment with the COMPANIES, the terms and provisions of this
Agreement, and all of the discussions, conversations, and negotiations leading
to the execution of this Agreement, and the parties shall not directly or
indirectly disclose, reveal, publicize, publish, or in any other manner
communicate to or with any other person, any of the foregoing, except to any
attorney(s) or tax advisor(s), or as required by law, or by WELSH to his
spouse. Any such disclosure to the parties’ attorney(s), or tax
advisor(s), or by WELSH to his spouse, will be made only if those persons must
have such information for the performance of his or her responsibilities and
each of those individuals must be informed of the confidential nature of this
Agreement. WELSH
agrees that if he violates Paragraph 10(a) of this Agreement, he has breached
this Agreement, the COMPANIES will be irreparably harmed as a matter of law and
will be entitled to immediate injunctive
relief. Notwithstanding the foregoing, WELSH may tell
prospective employers the dates of his employment, the positions held, the
evaluations received, and WELSH’S duties and responsibilities and salary with
the COMPANIES.
(b) Mutual
Non-disparagement. The parties agree that, as a condition of,
and as further consideration for, this Agreement, they will not engage in, or
induce other persons or entities to engage in, any harassing or disparaging
conduct or negative or derogatory statements directed at WELSH or the COMPANIES
or any of the COMPANIES’ affiliates at any time in the
future. Notwithstanding the foregoing, this Paragraph 10(b) may not
be used to penalize WELSH or the COMPANIES for providing truthful testimony
under oath in a judicial or administrative proceeding or complying with an order
of a court or government agency of competent jurisdiction.
11. Indemnification. To
the fullest extent provided in the COMPANIES’ by-laws and by Georgia law, the
COMPANIES shall indemnify and defend WELSH against any and all future claims and
civil actions arising out of his employment as President and Chief Executive
Officer of the COMPANIES.
12. Other Agreements By
WELSH. WELSH also agrees that:
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he
is entering into this Agreement knowingly, voluntarily, and with full
knowledge of its significance. WELSH has not been coerced,
threatened, or intimidated into signing this
Agreement;
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he
has carefully read this Agreement and fully understands all of the
provisions of this Agreement;
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Exhibit
10.1
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any
information provided to him about the terms of this Agreement by the
COMPANIES does not constitute legal advice, that he understands that the
COMPANIES’ outside counsel is not his attorney and that the COMPANIES have
expressly advised him to consult with his own attorney about the terms of
this Agreement;
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he
understands that he has at least Twenty-One (21) days to consider the
Agreement prior to signing it and shall have seven (7) days following the
execution and delivery of this signed Agreement to revoke said Agreement
in writing by delivering written notice of such revocation upon the
attorney for the COMPANIES, Xxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxxx LLP, 000
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx
00000-0000. Written notice may be given via facsimile to
Xxxxxxx Xxxxxxxxx at 000-000-0000 if advance notice of this facsimile is
provided by a telephone call or voice mail to 000-000-0000. If
WELSH does not revoke the signed Agreement on or before the close of
business (5:00 p.m. Eastern Time) of the seventh day after he delivers the
signed Agreement, the entirety of the Agreement shall immediately become
effective. However, if WELSH revokes the Agreement, he
understands that he will not receive any benefits pursuant to the
Agreement;
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in
signing this Agreement, he does not rely on and has not relied on any
representation or statement (written or oral) not specifically set forth
in this Agreement; and
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he
was not coerced, threatened, or otherwise forced to sign this Agreement,
and he is voluntarily signing and delivering this Agreement of his own
free will.
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13. Return of All Property and
Information of the COMPANIES. WELSH agrees to return all of
the COMPANIES’ property within seven (7) days following the Termination Date. To
the extent that WELSH is provided with information of the COMPANIES in
connection with performance of duties pursuant to Paragraph 6 of this Agreement,
he shall retain such information only for so long as it is necessary for the
performance of such duties and shall return all of the COMPANIES’ information at
any time upon the COMPANIES’ request.
14. Restrictive
Covenants.
(a) Definitions. For
purposes of this Agreement, the following terms shall have the following
respective meanings:
(i) “Business of the
Companies” means the services of banking and the provision, selling,
marketing, or distribution of products and/or services that are the
same, or substantially the same, as those sold, marketed, distributed, or
provided, by the COMPANIES during the term of the Employment
Agreement.
(ii) “Confidential
Information” means any secret or confidential information or know-how and
shall include, but shall not be limited to, the plans, strategic plans, budgets,
customers, costs, prices, uses, and applications of products and services,
results of investigations, studies owned or used by the COMPANIES, and all
products, processes, compositions, computer programs, and servicing, marketing
or operational methods and techniques at any time used, developed, investigated,
made or sold by the COMPANIES, before or during the term of the Employment
Agreement, that are not readily available to the public or that are maintained
as confidential by such person.
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Exhibit
10.1
(iii) “Material Contact”
means contact in person, by telephone, or by paper or electronic correspondence
in furtherance of the Business of the Companies while employed by the
COMPANIES.
(iv) “Restricted Territory”
means, and is limited to, the the counties of Henry, Newton, Spalding, Fayette,
Butts, Clayton, Fulton, DeKalb, Gwinnett, Cobb, Forsyth, Hall, Lowndes, Xxxx,
Xxxxx and Decatur in the State of Georgia and the counties of Xxxxx, St. Xxxx
and Xxxxxx in the State of Florida. WELSH acknowledges and agrees
that this is the area in which the COMPANIES conduct Business at the time of the
execution of this Agreement, and in which WELSH had responsibility on behalf of
the COMPANIES during his employment.
(b) Non-Competition. WELSH
agrees that for a period of twelve (12) months following the Termination Date,
WELSH will not, either for himself or on behalf of any other person or entity,
compete with the Business of the Companies within the Restricted Territory by
performing activities involving the Business of the Companies which are the same
as or similar to those performed by WELSH for the COMPANIES while employed by
the COMPANIES.
(c) Non-Solicitation of
Customers. WELSH agrees that for a period of twelve (12)
months following the Termination Date, WELSH shall not, directly or indirectly,
solicit any actual or prospective customers of COMPANIES with whom WELSH had
Material Contact, for the purpose of selling any products or services which
compete with the Business of Companies.
(d) Non-Recruitment of Employees
or Contractors. WELSH agrees that for a period of twelve (12)
months following the Termination Date, WELSH will not, directly or indirectly,
solicit or attempt to solicit any employee or contractor of the COMPANIES with
whom WELSH had Material Contact, to terminate or lessen such employment or
contract.
(e) Non Disclosure of
Confidential Information. WELSH agrees to maintain in confidence, not
disclose to any person, or use to the benefit of WELSH any Confidential
Information of any person received by WELSH as a result of WELSH’s employment
with the COMPANIES.
(f) Acknowledgments. WELSH
hereby acknowledges and agrees that the covenants contained in (b) through (e)
of this Paragraph 14 hereof are reasonable as to time, scope and territory given
the COMPANIES’ need to protect their business, customer relationships,
personnel, and Confidential Information. In the event any covenant or
agreement in this Agreement shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it shall be interpreted to extend only over
the maximum period of time for which it may be enforceable and/or over the
maximum geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. WELSH acknowledges and
represents that WELSH has substantial experience and knowledge such that WELSH
can readily obtain subsequent employment which does not violate this Agreement
and that the restrictive covenants contained in this Paragraph 14 are intended
to supersede the restrictive covenants contained in the Employment
Agreement.
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Exhibit
10.1
(g) Specific
Performance. WELSH acknowledges and agrees that any breach of
the provisions of this Paragraph 14 by him will cause irreparable damage to the
Companies, the exact amount of which will be difficult to determine, and that
the remedies at law for any such breach will be
inadequate. Accordingly, WELSH agrees that, in addition to any other
remedy that may be available at law, in equity, or hereunder, the COMPANIES
shall be entitled to specific performance and injunctive relief, without posting
bond or other security, to enforce or prevent any violation of any of the
provisions of this Paragraph 14 by the WELSH.
(h) Limitation. The
ownership or control of up to five percent (5%) of the outstanding securities of
any class of a bank or bank holding company doing business in the Restricted
Territory, which has a class of securities registered under the Securities
Exchange Act of 1934, as amended, shall not be deemed to be a violation of the
provisions of this Paragraph 14.
15. Entire
Agreement/Severability. This Agreement sets forth the entire
agreement between WELSH and the COMPANIES and supersedes any other written or
oral understandings (except for any Consulting Agreement WELSH may have entered
into with the COMPANIES) unless specifically excluded herein. WELSH
and the COMPANIES agree that if any phrase, clause or provision of this
Agreement is declared to be illegal, invalid or unenforceable by a court of
competent jurisdiction, such phrase, clause or provision shall be deemed severed
from this Agreement, but will not affect any other provisions of this Agreement,
which shall otherwise remain in full force and effect. If any phrase,
clause or provision in this Agreement is deemed to be unreasonable, onerous or
unduly restrictive by a court of competent jurisdiction, it shall not be
stricken in its entirety and held totally void and unenforceable, but shall
remain effective to the maximum extent permissible within reasonable
bounds. If any waiver, release or covenant not to xxx set forth in
Paragraphs 2 and 3 is deemed to be illegal, invalid or unenforceable in whole or
in part, the COMPANIES’ obligations under this Agreement shall be
nullified.
16. No
Assignment. WELSH may not assign this Agreement, in whole or
in part, without the prior written consent of the COMPANIES, and any attempted
assignment not in accordance herewith shall have no force or
effect.
17. Construction of Agreement and Venue
for Disputes. This Agreement shall be deemed to have been
jointly drafted by WELSH and the COMPANIES and shall not be construed more
strongly against either party. This Agreement shall be governed by
the laws of the State of Georgia, and the parties agree that any actions arising
out of or relating to this Agreement or WELSH’S employment with the COMPANIES,
or the termination of WELSH’S employment with the COMPANIES, shall be brought
exclusively in either the United States District Court for the Southern District
of Georgia, Valdosta Division or the State or Superior Courts of Lowndes County,
Georgia.
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Exhibit
10.1
18. Code Section
409A. Notwithstanding any other provision of this Agreement,
it is intended that any payment or benefit which is provided pursuant to, or in
connection with, this Agreement that is considered to be deferred compensation
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) shall be provided and paid in a manner, and at such time, as complies
with the applicable requirements of Section 409A of the Code. It is
intended that the termination of employment under this Agreement shall be a
"separation from service" within the meaning of Section 409A of the Code, where
it is reasonably anticipated that WELSH will either perform no further services
for the COMPANIES after such date or that the level of bona fide services WELSH
will perform after that date (whether as an employee or independent contractor)
will permanently decrease to no more than 20 percent of the average level of
bona fide services he performed over the immediately preceding 36-month period
(or, such lesser period as WELSH provided service to
the COMPANIES). For purposes of this Agreement, all rights
to payments and benefits hereunder shall be treated as rights to receive a
series of separate payments and benefits to the fullest extent allowed by
Section 409A of the Code. If WELSH is a key
employee (as defined in Section 416(i) of the Code without regard to paragraph
(5) thereof) and any stock of the COMPANIES (or any of their affiliates) is
publicly traded on an established securities market or otherwise, then payment
of any amount or provision of any benefit under this Agreement which is
considered deferred compensation subject to Section 409A and which is payable as
a result of separation from service shall be delayed for six (6) months after
WELSH experiences a “separation from service” or, if earlier, until WELSH’s
death, as required by Section 409A(a)(2)(B)(i) of the Code (the "409A Deferral
Period"). The payments that would otherwise have been made in the
409A Deferral Period shall be accumulated and paid in a lump sum as soon as the
409A Deferral Period ends. However, the payments and benefits
provided hereunder are intended to be exempt from the definition of “deferred
compensation” for purposes of Section 409A of the Code and therefore, not
subject to delay during the 409A Deferral Period. Notwithstanding the
foregoing, neither the COMPANIES, nor any of their affiliates, nor any of their
officers, directors, employees or representatives shall be liable to WELSH if
any payments or benefits provided hereunder are considered deferred compensation
or for any interest, taxes or penalties resulting from non-compliance with
Section 409A of the Code.
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X.
XXXXX XXXXX, JR.
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/s/ X. Xxxxx Welsh, Jr
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Date:
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4/6/09
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FOR
PAB BANKSHARES, INC.
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/s/ Xxxxxxxx Xxxxxx, Jr.
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Title:
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Vice Chairman
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Date:
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4/6/09
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FOR
THE PARK AVENUE BANK
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/s/ Xxxxxxxx Xxxxxx, Jr.
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Title:
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Vice Chairman
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Date:
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4/6/09
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