Exhibit 10.2
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT is made and effective this ___31st___ day of
_December_______, 1999 (the "Effective Date") by and between FLAG FINANCIAL
CORPORATION ("FLAG"), a Georgia corporation, and ___Dennis D. Allen____________,
(the "Executive").
STATEMENT OF BACKGROUND INFORMATION
A. The Executive currently serves as an officer of FLAG or of one of
ts wholly owned subsidiaries (the "Employer").
B. The Employer and the Executive desire to enter into this agreement
to document certain terms and conditions of the Executive's employment
relationship with the Employer.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and promises herein contained, and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I. TERM OF AGREEMENT
This Agreement shall remain in effect for an initial term expiring
March 31, 1999; provided that, at the end of the initial term, and at the end of
each twelve-month period thereafter during which this Agreement is in effect,
this Agreement shall automatically be extended for an additional twelve-month
period commencing at the end of the initial term or any subsequent extension
thereof, unless either party gives written notice to the other of its intent not
to extend this Agreement. Such written notice shall be given not less than
ninety (90) days prior to March 31, 1999 or any subsequent twelve-month period
to which this Agreement has been extended. In the event that notice of
non-extension is properly given, this Agreement shall terminate at the end of
the remaining term then in effect.
ARTICLE II. SEVERANCE BENEFIT
In the event of the Executive's Involuntary Termination of employment
with the Employer during the term of this Agreement for the reasons specified in
Article III below, the Employer shall pay to the Executive an amount equal to
the Executive's base salary and bonus paid over the last three full fiscal years
(or the compensation paid to the Executive for such shorter period as Executive
has been employed) of the Employer or its subsidiary bank immediately preceding
such involuntary termination (the "Severance Benefit"). The Severance Benefit
shall be paid in cash in a lump sum within thirty (30) days following the
Involuntary Termination.
The Employer shall be entitled to withhold appropriate employment and
income taxes, if required by applicable law, should the Severance Benefit become
payable.
ARTICLE III. PAYMENT EVENTS
The Severance Benefit described in Article II above shall become
payable if the Executive's employment is Involuntarily Terminated and either (i)
such Involuntary Termination occurred within six (6) months prior to or one (1)
year following a Change in Control as defined in Section 5.1(2) below, or (ii)
such Involuntary Termination occurred within one (1) year following the date of
this Agreement.
ARTICLE IV. PROTECTIVE COVENANTS
4.1 Confidential Information. As a senior management employee of the
Employer, the Executive has access to Confidential Information (as defined
herein). The Executive agrees to maintain the confidentiality of all
Confidential Information throughout the Term and for a period of one (1) year
after the termination of this Agreement. For purposes of this Section, the term
"Confidential Information" means data and information relating to the business
of the Employer which is or has been disclosed to the Executive or of which the
Executive has become aware as a consequence of or through his employment
relationship with the Employer and which has value to the Executive and is not
generally known to its competitors. Confidential Information shall not include
any data or information that has been voluntarily disclosed to the public by the
Employer (except where such public disclosure was effected by the Executive
without authorization) or that has been independently developed and disclosed by
others or that otherwise enters the public domain through law means.
4.2 Covenant Not to Compete. The Executive agrees, acknowledges and
understands that the nature, kind and character of the business conducted by the
Employer is highly competitive. Incident to the Executive engagement hereunder
and for the considerations contained herein, the Executive agrees that:
(1) during the term of this Agreement and for a period of twelve (12)
months following the later of the termination of this Agreement or the
resignation or Involuntary Termination of Executive, the Executive will
not, in the Georgia counties of Xxxxxxx and Tattnall:
(a) enter into any employment relationship with any bank, thrift
institution, other entity providing financial services or an affiliate of
any of the foregoing in a capacity identical with or substantially similar
to the capacity in which he was employed by the Employer at the time of his
termination of employment;
(b) directly or indirectly, on his own behalf or in the service or on
behalf of others, solicit, divert, appropriate or attempt to solicit,
divert or appropriate, any business from any of the Employer's customers
with whom the Executive has had material contact during the past two (2)
years of the Executive's employment, for purposes of providing products or
services that are competitive with those provided by the Employer; or
(c) on his own behalf or in the service or on behalf of others,
solicit, recruit or hire away, or attempt to solicit, recruit or hire away,
directly or by assisting others, any employee of the Employer, whether or
not such employee is a full-time employee, part-time or temporary employee
of the Employer, and whether or not such employment is pursuant to a
written agreement or is for a determined period or at will.
2
(2) by virtue of the duties and special knowledge of the affairs
and operations of the Employer that the Executive has and will obtain as a
result of his employment relationship with the Employer, a breach or
threatened breach by him of the provisions of this covenant not to compete
shall cause irreparable injury to the Employer and shall entitle the
Employer, in addition to any other remedy, to injunctive relief against
such breach or threatened breach.
The Executive acknowledges that the foregoing covenants are reasonable
and necessary to protect the interests of the Employer.
ARTICLE V. MISCELLANEOUS
5.1 Definitions. For purposes of this Agreement the terms set forth
below shall have the following meanings ascribed to them:
(1) "Cause" means conduct (a) constituting fraud or dishonesty
resulting in financial harm to the Employer or any of its affiliates; (b)
constituting a gross dereliction of the Executive's duties in the capacity
in which he is employed by the Employer; or (c) which results in the
successful criminal prosecution by federal, state or local authorities for
anything other than a misdemeanor relating to public safety laws.
(2) "Change in Control" means any one of the following events which
occurs during the term of this Agreement or any extension:
(a) the acquisition by any person or persons acting in concert of the
then-outstanding voting shares of FLAG Financial Corporation, after the
transaction, the acquiring person or persons own, control or hold with
power to vote twenty-five percent (25%) or more of any class of voting
securities of FLAG Financial Corporation or such other transactions as may
be described under 12 C.F.R. @ 225.41(b)(1) or any successor thereto; or,
(b) the approval by the stockholders of FLAG Financial Corporation of
a reorganization, merger, share exchange or consolidation, with respect to
which persons who were the shareholders of FLAG Financial Corporation
immediately prior to such reorganization, merger, share exchange or
consolidation, do not, immediately thereafter, own more than fifty percent
(50%) of the combined voting power entitled to vote at the election of
directors of the reorganized, merged, exchanged or consolidated company's
then outstanding voting securities; or
(c) the sale, transfer or assignment of all or substantially all of
the assets of FLAG Financial Corporation to any third party. (3)
"Involuntary Termination" means termination of Executive by the Employer
for any reason other than for Cause, and shall include for purposes of this
Agreement a material diminution in the compensation, duties and
responsibilities of Executive or a transfer of the Executive to another
location more than thirty (30) miles from the location of the office where
Executive employed at the time of the Change in Control.
5.2 Amendment. This Agreement may not be amended (in whole or in
part) orally or by course of performance, but only by a written instrument
signed by both parties.
3
5.3 Notice. Except as otherwise required under this Agreement, any
notice required or permitted to be given pursuant to this Agreement shall be
sufficiently given:
(1) to the Executive if in writing and personally delivered, or mailed
(and if mailed shall be deemed given three (3) business days after mailing)
registered or certified mail addressed to the Executive at the Executive's
residence as shown in the records of the Employer or at such address as the
Executive shall designate in a written notice to the Employer; and
(2) to the Employer if in writing and personally delivered to the
Chairman or President and CEO of the Employer or mailed (and if mailed,
shall be deemed given three (3) business days after mailing) registered or
certified mail addressed to FLAG Financial Corp., P. O. Xxx 0000, XxXxxxxx,
Xxxxxxx, 00000, Attn: Chairman or President.
5.4 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the Executive and upon the Employer and its successors and assigns.
The Executive may not assign his rights and obligations hereunder without the
written consent of the Employer.
5.5 Applicable Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Georgia.
5.6 No Defense. The existence of any claim or cause of action of the
Executive against the Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
any covenant contained in this Agreement.
5.7 Survival. The provisions of Article IV shall survive any
termination of this Agreement.
IN WITNESS WHEREOF, the Employer has executed and delivered by its duly
authorized officer, and the Executive has signed, this Agreement all as of the
day and year first above written.
FLAG FINANCIAL CORPORATION:
By: /s/Xxxx X. Xxxxx
------------------------------------------
Title: Chairman
---------------------------------------
EXECUTIVE:
/s/Xxxxxx X. Xxxxx (SEAL)
----------------------------------------------
Print Name: Xxxxxx X. Xxxxx
----------------------------------
4
