EXHIBIT 10.4
FIDELITY SOUTHERN CORPORATION
EXECUTIVE CONTINUITY AGREEMENT
This Executive Continuity Agreement (this "Agreement') is made as of March
17, 2005, between Fidelity Southern Corporation ("Fidelity Southern") and Bank
(together with Fidelity Southern collectively referred to as "Fidelity") and H.
Xxxxxx Xxxxxxx, Xx. (the "Executive").
The purpose of this Agreement is to encourage the Executive to continue
employment with Fidelity after a Change of Control of Fidelity Southern or Bank
by providing reasonable employment security to the Executive and to recognize
the prior service of the Executive in the event of termination of employment
under defined circumstances after any such Change of Control. This Agreement
supersedes and replaces all prior similar written and oral agreements between
the Executive and Fidelity and is in addition to any employment agreement
entered into between Fidelity and the Executive on or after the date hereof.
Section 1. Definitions. For purposes of this Agreement:
(a) "Affiliate" means any entity that is, directly or indirectly
through one or more intermediaries, controlled by Fidelity
Southern or the Bank, as the case may be.
(b) "Annual Base Salary" shall have the meaning set forth in
Section 3.
(c) "Bank" shall mean Fidelity Bank and the successors of all or
substantially all of its business.
(d) "Beneficiary" means the person or entity designated by the
Executive, by a written instrument delivered to Fidelity
Southern, to receive any benefits payable under this Agreement
in the event of the Executive's death. If the Executive fails
to designate a Beneficiary, or if no beneficiary survives the
Executive, such Benefits on the death of the Executive will be
paid to the Executive's estate.
(e) "Board" means the Board of Directors of Fidelity Southern.
(f) "Cause" means:
(1) The willful and continued failure by the Executive to
substantially perform the material duties of the
Executive with Fidelity and/or any Affiliate (other than
any such failure resulting from the disability of the
Executive) for a continuous period of three months,
after a written demand for such performance is delivered
to the Executive at the direction of the Board by the
Chief Executive Officer of Fidelity Southern or by any
person designated by the board of Fidelity Southern or
the Bank, which written demand specifically identifies
the material duties of which Fidelity believes that the
Executive has not substantially performed; or
(2) The willful engaging by the Executive in gross
misconduct materially and demonstrably injurious to
Fidelity. No act, or failure to act, on the Executive's
part shall be considered "willful" unless done, or
omitted to be done, by Executive in the absence of good
faith and without a reasonable belief that the action or
failure to act of the Executive was in the best interest
of Fidelity or any Affiliates.
(g) "Change of Control" means the occurrence hereafter of any
event described in (1), (2) or (3) below.
(1) Any "person" (as such term is used in Sections 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as
amended, the "Act) acquires "beneficial ownership" (as
such term is defined in Rule 13d-3 promulgated under the
Act), directly or indirectly, of equity securities of
Fidelity Southern or the Bank representing more than
fifty percent (50%) of the combined voting power
represented by the outstanding voting securities of
Fidelity Southern or the Bank, as the case may be
("Voting Power").
(2) Individuals who constitute the membership of the Board
or the board of the Bank on the date of this Agreement
(each being hereinafter referred to as the "Incumbent
Board') cease at any time hereafter, to constitute at
least a majority of the Board or the board of the Bank,
provided that any director whose nomination was approved
by a majority of the Incumbent Board will be considered
a member of the Incumbent Board, excluding any such
individual not otherwise a member of the Incumbent Board
whose initial assumption of office is in connection with
an actual or threatened election contest relating to the
election of the directors of Fidelity Southern or the
Bank.
(3) The effective date of a complete liquidation or
dissolution of Fidelity Southern or the Bank, or of the
sale or other disposition of all or substantially all of
the assets of Fidelity Southern or the Bank, as approved
by the shareholders of Fidelity Southern or the Bank, as
the case may be, or the acquisition by a person, other
than Fidelity Southern, of beneficial ownership,
directly or indirectly, of equity securities of the Bank
representing more than fifty percent (50%) of the
combined voting power represented by the Bank's then
outstanding voting securities.
If a Change of Control occurs on account of a series of
transactions, the Change of Control is deemed to have
occurred on the date of the last of such transactions
which results in the Change of Control.
2
(h) "Change of Control Period" shall have the meaning set forth in
Section 4(a).
(i) "Code" means the Internal Revenue Code of 1986, amended.
(j) "Commencement Date" shall have the meaning set forth in
Section 3(a).
(k) "Compensation" means the total compensation paid to the
Executive by Fidelity Southern, the Bank and/or by any
Affiliate which is or will be reportable as income under the
Code on Internal Revenue Service Form W-2, (i) plus any amount
contributed by the Executive pursuant to a salary reduction
agreement, which is not includible in gross income under Code
Sections 125 or 402(a) (8) or under any other program that
provides for pre-tax salary reductions and compensation
deferrals; (ii) plus any amount of the Executive's
compensation which is deferred under any plan or program of
Fidelity; and (iii) reduced by any income reportable on Form
W-2 that is attributable to the exercise of any stock option.
(l) "Disability" means a complete inability of the Executive
substantially to perform the employment duties for Fidelity
Southern or Bank or any Affiliate for a period of at least one
hundred and eighty (180) consecutive days.
(m) "Employment Period" shall have the meaning set forth in
Section 3(a).
(n) "Final Compensation" means the highest of (i) the Executive's
Compensation for the 12 full calendar months immediately
preceding the Change of Control; or (ii) the Executive's
annual base salary rate payable by Fidelity Southern, the Bank
and any Affiliate, in effect immediately preceding the Change
of Control; or (iii) the Executive's aggregate annual base
salary as set by Fidelity Southern, the Bank and any
Affiliate, effective at any time during the Employment Period.
(o) "Good Reason" will exist with respect to the Executive if,
without the Executive's express written consent the following
events occur after a Change of Control which are not corrected
within thirty (30) days after receipt of written notice from
Executive to Fidelity Southern:
(1) there is a material change in the Executive's position
or responsibilities (including reporting
responsibilities) which, in the Executive's reasonable
judgment, represents an adverse change from the
Executive's status, title, position or responsibilities
immediately prior to the Change of Control;
(2) the assignment to the Executive of any duties or
responsibilities which are inconsistent with the
position or responsibilities of the Executive
immediately prior to the Change of Control;
3
(3) any removal of the Executive from or failure to
reappoint or reelect the Executive to any of the
positions the Executive held immediately prior to the
Change of Control;
(4) there is a reduction in the Executive's rate of annual
base salary or a change in the manner the incentive
compensation of the Executive is calculated and such
change will result in a reduction of the incentive
compensation of Executive;
(5) the requiring of the Executive to relocate his principal
business office of the Executive to any place outside a
fifteen (15) mile radius from the Executive's current
place of employment in Atlanta, Georgia, (reasonable
required travel on Fidelity's business which is
materially greater than such travel requirements prior
to the Change of Control shall not constitute a
relocation of the Executive's principal business
office);
(6) the failure of Fidelity to continue in effect any
Compensation, Welfare Plan or Individual Life Insurance
Policy in which the Executive is participating
immediately prior to the Change of Control without
substituting plans providing the Executive with
substantially similar or greater benefits, or the taking
of any action by Fidelity which would materially and
adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any of
such plans or deprive the Executive of any material
fringe benefit enjoyed by the Executive immediately
prior to the Change of Control; or
(7) the material breach of any provision of this Agreement
which is not timely connected by Fidelity upon thirty
(30) days prior written notice from the Executive.
(p) "Individual Life Insurance Policy" means the Flexible Premium
Adjustable Life Insurance, Universal Life policy issued by
Great-West Life & Annuity Insurance Company ("Great-West") in
the face amount of $500,000 payable to beneficiaries
designated by the Executive or his estate or trust in lieu
thereof.
(q) "Salary Continuance Benefit" means the benefit provided in
Section 4(b).
(r) "Severance Benefit" means a Salary Continuance Benefit and/or
a Welfare Continuance Benefit.
(s) "Severance Period" means the period beginning on the date the
Executive's employment is terminated by Fidelity Southern,
Bank or any Affiliate, other than for Cause, Disability or
death, or by Executive for Good Reason and ending on the date
eighteen (18) months thereafter.
4
(t) "Voting Power" shall have the meaning set forth in Section
1(g)(1).
(u) "Welfare Continuance Benefit" means the benefit provided in
Section 4(c).
(v) "Welfare Plan" means any medical, prescription, dental,
disability, salary continuation, employee life, accidental
death, travel accident insurance or any other welfare benefit
plan, as defined in Section 3(l) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") made
available by Fidelity Southern, the Bank or any Affiliate in
which the Executive is eligible to participate; provided,
however, that the term "Welfare Plan" shall not include the
Individual Life Insurance Policies.
Section 2. Employment After Change of Control.
If the Executive is employed by Fidelity Southern, the Bank or an
Affiliate on the Commencement Date, such employer will continue to employ
the Executive for the Employment Period.
Section 3. Compensation During Employment Period.
(a) During the period commencing one year prior to a Change of
Control ("Commencement Date") and ending upon the earlier of
(i) three years after a Change of Control or (ii) upon
termination of employment of Executive for any reason by
Executive or by Fidelity Southern or the Bank or any Affiliate
("Employment Period"), the Executive will receive an annual
base salary ("Annual Base Salary"), at least equal to the
greater of (i) the annual base salary payable to the Executive
by Fidelity Southern, the Bank and/or Affiliates in respect of
the twelve full calendar month period immediately preceding
the Commencement Date or (ii) the annual base salary rate of
the Executive payable on and after the Commencement Date and
prior to the Change of Control. During the Employment Period,
the Annual Base Salary will be increased at any time and from
time to time so as to be substantially consistent with
increases in base salaries generally awarded in the ordinary
course of business to other peer executives of Fidelity
Southern, the Bank and Affiliates. Any increase in Annual Base
Salary will not serve to limit or reduce any other obligation
to the Executive under this Agreement. The Annual Base Salary
in effect on the Commencement Date will not be reduced
thereafter nor shall any such increase during the Employment
Period be reduced thereafter.
(b) During the Employment Period, the Executive will be entitled
to participate in all incentive plans (including, without
limitation, stock option, stock purchase, savings,
supplemental medical and retirement plans) and other programs
and practices applicable generally to other peer executives of
Fidelity Southern, the Bank or any Affiliates, but in no event
will such plans and other programs, practices, including
policies to
5
provide the Executive with incentive opportunities, savings
opportunities and retirement and other benefit opportunities,
in each case, less favorable, in the aggregate, than those
provided by Fidelity Southern, the Bank or any Affiliates for
the Executive under such plans, practices, policies and
program as in effect at any time on and after the Commencement
Date and prior to the Change of Control.
(c) In addition the method of the calculation of the Executive's
total incentive compensation for each fiscal year, or part
thereof, during the Employment Period will not be changed in
any manner which will result in less total incentive
compensation being paid or payable to Executive by Fidelity
Southern, the Bank and Affiliates in respect of the Employment
Period (or any portion thereof) from the maximum amount that
would have been paid using the method of calculating incentive
compensation under the incentive compensation programs in
effect on and after the Commencement Date and prior to the
Change of Control. The parties agree that Executive shall be
entitled to incentive compensation for services rendered
during part of a fiscal year regardless of the reason for the
termination of employment of Executive.
(d) During the Employment Period the Executive and the eligible
Members of the Executive's family ("Dependents") who
participated (or otherwise provided coverage) on the
Commencement Date and continue to be eligible for
participation in any Welfare Plan, will receive all such
benefits under the Welfare Plans to the extent applicable
generally to other peer executives of Fidelity Southern, the
Bank and Affiliates similarly situated, but in no event will
the Welfare Plans provide benefits for the Executive and
Beneficiaries that are less favorable, in the aggregate, than
the most favorable benefits provided under the Welfare Plans
in effect at any time during the Employment Period.
(e) During the Employment Period, Fidelity Southern will maintain
in place the Individual Life Insurance Policies.
(f) During the Employment Period, the Executive will be entitled
to fringe benefits in accordance with the most favorable
plans, practices, programs and policies of Fidelity Southern,
the Bank and any Affiliate in effect for which the Executive
qualifies or qualified at any time during the Employment
Period including, if more favorable to the Executive, as in
effect at any time on or after the Change of Control with
respect to other peer executives of Fidelity Southern, the
Bank or any Affiliate.
Section 4. Benefits Upon Termination of Employment.
(a) Provided the Executive executes a "Release" (as defined below)
and does not revoke such Release, the Executive will be
entitled to a Salary Continuance Benefit and a Welfare
Continuance Benefit as hereafter set
6
forth if (i) the employment of the Executive with Fidelity
Southern, the Bank or any Affiliate is terminated by Fidelity
Southern, the Bank or any Affiliate, other than for Cause,
Disability or death, during the period commencing upon the
Commencement Date and ending three years after a Change of
Control ("Change of Control Period"); or (ii) the Executive
terminates his employment with Fidelity Southern, the Bank or
any Affiliate for Good Reason during the Change of Control
Period. Any termination by the Executive will be communicated
by Notice of Termination to Fidelity Southern given in
accordance with Section 23(b). For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Section
relied upon; (ii) to the extent applicable, sets 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; and (iii), if applicable,
indicates the date of termination, which shall not be more
than 30 days and more than 60 days after the giving of such
notice. The term "Release" means a general release that
releases Fidelity Southern, the Bank, their Affiliates,
shareholders, directors, officers, employees, employee benefit
plans, representatives, and agents and their successors and
assigns from any and all employment related claims the
Executive or the Executive's successors and beneficiaries
might then have against them (excluding any claims for vested
benefits under any employee pension plan of Fidelity Southern,
the Bank or the Affiliates).
(b) The Salary Continuance Benefit will be the excess of (i) three
times the Executive's Final Compensation over (ii) the
aggregate amount payable under Section 14. The Salary
Continuance Benefit will be payable in seventy-two (72) equal
semi-monthly installments commencing on the 15th or last day
of the month immediately following the date of termination of
employment, whichever date occurs first, and then continuing
on the 15th and last day of each calendar month thereafter
until all such installments are paid. The Salary Continuance
Benefit will be made net of all required Federal and State
withholding taxes and similar required withholdings and
authorized deductions. The Salary Continuance Benefit shall be
payable to the estate of the Executive upon the death of the
Executive after the amounts become payable.
(c) During the Severance Period, the Executive and the Executive's
Dependents will continue to be covered by all Welfare Plans in
which the Executive or Dependents were participating
immediately prior to the date of the Executive's termination
of employment, subject to the eligibility requirements of such
Welfare Plans on the date of termination of employment (the
"Welfare Continuance Benefit"). Any changes to any Welfare
Plan during the Severance Period will be applicable to the
Executive and Dependents as if he continued to be an employee
of Fidelity Southern, the Bank or any Affiliate. Fidelity
Southern or the Bank will
7
pay or they shall cause an Affiliate to pay, all or a portion
of the cost of the Welfare Continuance Benefit for the
Executive and Dependents under the Welfare Plans on the same
basis as applicable, from time to time, to active employees
covered under the Welfare Plans and the Executive will pay any
additional costs comparable to those costs paid by active
executives. If such participation in any one or more of the
Welfare Plans included in the Welfare Continuance Benefit is
not possible under the terms of the Welfare Plan or any
provision of law would create any adverse tax effect for the
Executive or Fidelity Southern the Bank or any Affiliate due
to such participation, Fidelity Southern or the Bank will
provide or will cause an Affiliate to provide substantially
identical benefits directly or through an insurance
arrangement or pay the Executive's costs for such Welfare Plan
if continued by Executive, including as permitted under ERISA.
The Welfare Continuance Benefit as to any Welfare Plan will
cease if and when the Executive has obtained coverage under
one or more welfare benefit plans of a subsequent employer
that provide for equal or greater benefits to the Executive
and Dependents with respect to the specific type of benefit
provided under the applicable Welfare Plan.
(d) Fidelity Southern shall maintain the Individual Life Insurance
Policies after termination of the Executive's employment only
if such termination is due to "retirement" (as such term is
determined by the Board).
(e) If the Executive violates any of the undertakings set forth in
Sections 10, 11, 12 and 13 of this Agreement after termination
of his employment, any additional compensation and benefits
under this Section 4 shall cease; except that the benefits
under Section 4(d) shall continue to be available under the
terms of the Individual Life Insurance Policies to the extent
set forth in Section 4(d).
(f) (i) Fidelity Southern shall engage the independent
accounting firm regularly utilized by Fidelity Southern
("Accounting Firm") to provide to Fidelity Southern and
Executive, at Fidelity Southern's expense, a
determination of whether any compensation payable to
Executive pursuant to this Agreement (alone or when
added to all other compensation paid or payable to the
Executive by Fidelity, the Bank or any Affiliate) during
the Severance Period constitutes a "parachute payment"
("Parachute Payment") as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code").
If the Accounting Firm determines that any such
compensation payable to Executive constitutes a
Parachute Payment, the Accounting Firm shall also
determine: (A) the amount of the excise tax to be
imposed under Section 4999 of the Code; (B) whether
Executive would realize a greater amount after Federal
and Georgia income taxes (assuming the highest marginal
rates then in effect apply) if such compensation payable
to Executive were reduced (assuming latest payments are
reduced
_________
Executive
_________________
Fidelity Southern
_________
Bank
8
first) so that no amount payable to Executive hereunder
(alone or when added to all other compensation paid or
payable to the Executive by Fidelity, the Bank or any
Affiliate) constitutes a Parachute Payment than the
Executive would realize after Federal and Georgia income
taxes (assuming the highest marginal rates then in
effect apply) and after imposition of the excise tax
under Section 4999 of the Code if the amounts payable to
Executive hereunder were not so reduced; and (C), if the
Accounting Firm determines in (B) above that Executive
would realize a higher amount if the compensation
payable to Executive were so reduced, the amount of the
reduced benefit. All determinations shall be made on a
present value basis. The Accounting Firm shall provide
to Fidelity Southern and to Executive a written report
of its calculations and determinations hereunder as soon
as practicable. No later than fifteen (15) days
following receipt by Executive of the report from the
Accounting Firm, Executive will notify Fidelity Southern
in writing of any disagreement with said report, and, in
such case, Fidelity Southern shall direct the Accounting
Firm to promptly discuss its determinations with an
accountant or other counsel designated by Executive in
Executive's written notice and seek to reach an
agreement regarding same no later than fifteen (15) days
after receipt of the Executive's notice, with Fidelity
Southern and Executive, each bearing the cost of their
own accountants, counsel and other advisers. If no
agreement can be reached, the matter shall be promptly
submitted to binding arbitration under the rules of the
American Arbitration Association before a single
arbitrator in Atlanta, Georgia. The determinations so
made shall be binding on the parties. If it is
determined hereunder that Executive would realize a
greater amount after Federal and Georgia income taxes
(assuming the highest marginal rates then in effect
apply) if the compensation payable to Executive pursuant
to this Agreement were reduced (assuming latest payments
are reduced first) so that no amount payable to
Executive hereunder constitutes a Parachute Payment,
then the amounts payable to Executive pursuant to this
Agreement shall be so reduced.
(ii) As a result of the uncertainty in the application of
Sections 280G and 4999 of the Code, it is possible that
amounts will have been paid or distributed to the
Executive that should not have been paid or distributed
under this Section 4(e) ("Overpayments"), or that
additional amounts should be paid or distributed to the
Executive under this Section 4(e) ("Underpayments"). If
based on either the assertion of a deficiency by the
Internal Revenue Service against Fidelity or the
Executive, which assertion has a high probability of
success, or controlling precedent or substantial
authority, an Overpayment has been made, that
Overpayment will be treated for
9
all purposes as a loan ab initio that the Executive must
repay to Fidelity immediately together with interest at
the applicable Federal rate under Section 7872 of the
Code; provided, however, that no loan will be deemed to
have been made and no amount will be payable by the
Executive to Fidelity unless, and then only to the
extent that, the deemed loan and payment would either
reduce the amount on which the Executive is subject to
tax under Section 4999 of the Code or generate a refund
of tax imposed under Section 4999 of the Code. If based
upon controlling precedent or substantial authority, an
Underpayment has occurred, the amount of that
Underpayment will be paid to the Executive promptly by
Fidelity. Whether an Overpayment or Underpayment has
occurred may be determined in substantially the same
manner as the original determination.
(iii) Fidelity and the Executive shall each provide the
Accounting Firm access to and copies of any books,
records and documents in the possession of Fidelity or
Executive, as the case may be, reasonably requested by
the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and
issuance of the determinations and calculations
contemplated by this Section 4(e).
(iv) The federal, state and local income or other tax returns
filed by Executive shall be prepared and filed on a
consistent basis with the determination with respect to
the excise tax payable by Executive. The Executive, at
the request of Fidelity, shall provide Fidelity true and
correct copies (with any amendments) of his federal
income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns,
if relevant, as filed with the applicable taxing
authority, and such other documents reasonably requested
by Fidelity, evidencing such conformity.
Section 5. Outplacement Services.
If the Executive is entitled to a Severance Benefit under Section 4, the
Executive also will be entitled in addition to receive complete
outplacement services, including job search, interview skill services, job
retaining and education and resume preparation, paid by Fidelity Southern
up to a total cost of $20,000. The services will be provided by a
nationally or regionally recognized outplacement organization selected by
the Executive with the approval of Fidelity Southern (which approval will
not be unreasonable withheld). The services will be provided for up to two
(2) years after the Executive's termination of employment or until
Executive obtains full-time employment, whichever occurs first.
10
Section 6. Death.
If the Executive dies while receiving a Welfare Continuation Benefit, the
Executive's Dependents will continue to be covered under all applicable
Welfare Plans during the remainder of the Severance Period.
Section 7. Setoff.
(a) Except as otherwise provided in Section 7(c) below, payment of
a Severance Benefit will be in addition to any other amounts
otherwise then currently payable to the Executive, including
any accrued but unpaid vacation pay or deferred compensation.
No payments or benefits payable to or with respect to the
Executive pursuant to this Agreement will be reduced by any
amount the Executive may earn or receive from employment with
another employer or from any other source. In no event will
the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement
and, except as provided in the last sentence of Section 4(c)
with respect to the Welfare Continuation Benefit or in Section
5 with respect to outplacement services, such amounts will not
be reduced whether or not the Executive obtains other
employment.
(b) Nothing in this Agreement will limit or otherwise affect such
rights as the Executive may have under any other contract or
agreement with Fidelity Southern, the Bank or Affiliates.
Amounts which constitute vested benefits or which the
Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement
(collectively, "programs") with Fidelity Southern, the Bank or
Affiliates at or subsequent to the Executive's termination of
employment will be payable in accordance with such program.
(c) The total amount payable hereunder for Salary Continuation
Benefits and consideration for the non-compete,
non-solicitation and non-disclosure provisions (as set forth
in Section 14) shall not exceed three times the Executive's
Final Compensation. Fidelity Southern, the Bank or an
Affiliate and Executive may be parties to other agreements,
policies, plans, programs or arrangements relating to the
Executive's employment. This Agreement shall be construed and
interpreted so that the Salary Continuance Benefit, Welfare
Continuance Benefit and other payments (including, but not
limited to, payments described in Section 14 below) hereunder
are paid or made available only to the extent that similar
amounts are not paid or made available to the Executive under
any other similar agreements, policies, plans, programs or
arrangements. Without limiting the foregoing, any Salary
Continuance Benefit, Welfare Continuance Benefit and other
payments (including, but not limited to, payments described in
Section 14 below) payable under this Agreement
11
shall be reduced by any other compensation, severance pay,
continued welfare benefits, non-compete payments or other
similar amounts that the Executive receives under any
employment or employment-related agreement with Fidelity
Southern, the Bank or any Affiliate and under any other
similar agreements, policies, plans, programs or arrangements
covering the Executive with respect to Fidelity Southern, the
Bank or any Affiliate; it being the intent of both the
Executive and Fidelity Southern, the Bank or any Affiliate not
to provide to the Executive any duplicative payments,
severance pay or welfare benefits hereunder.
(d) To the extent that federal, state or local law requires
Fidelity Southern, the Bank or an Affiliate to provide notice
and/or make a payment to the Executive because of involuntary
termination of employment, the severance pay available under
this Agreement for periods for which the Executive is not
required to report to work shall be reduced, but not below
zero, by the amount of any such mandated payments.
Section 8. No Interest in Benefit.
No interest of the Executive or any Beneficiary, or any right to receive
any payment or distribution hereunder, will be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment, or other
alienation or encumbrance of any kind, nor may such interest or right to
receive a payment or distribution be taken, voluntarily or involuntarily,
for the satisfaction of the obligation or debts of, or other claims
against, the Executive or Beneficiary, including claims for alimony,
support, separate maintenance, and claims in bankruptcy proceedings.
Section 9. Benefits Unfunded.
All rights under this Agreement of the Executive and Beneficiaries will at
all times be entirely unfunded, and no provision will at any time be made
with respect to segregating any assets of Fidelity or any Affiliate for
payment of any amounts due hereunder. The Executive and Beneficiaries will
have only the rights of general unsecured creditors of Fidelity.
Section 10. Covenant Not to Compete.
The Executive agrees that during his employment with Fidelity Southern or
Bank and for a period of eighteen (18) months after termination of the
Executive's employment with Fidelity Southern or Bank for any reason, that
the Executive shall not, on his own behalf or on another's behalf, work in
any management or executive capacity in the business of providing banking
or banking related services. This restriction shall apply only within a
50-mile radius of 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000. The
Executive agrees that because of the nature of Fidelity Southern's and
Bank's business, the nature of the Executive's job responsibilities, and
the nature of the Confidential Information and Trade Secrets of Fidelity
Southern and Bank which Fidelity Southern and Bank will give the Executive
access to, any breach of this provision by the Executive would result in
the
12
inevitable disclosure of Fidelity Southern's and Bank's Trade Secrets and
Confidential Information to its direct competitors.
Section 11. Non-Solicitations of Customers.
Executive agrees that during his employment with Fidelity Southern or Bank
and for a period of eighteen (18) months after termination of his
employment with Fidelity Southern or Bank for any reason, Executive will
not will not directly or indirectly solicit, contact, call upon,
communicate with or attempt to communicate with any client or customer of
Fidelity Southern or Bank for the purpose of providing banking or banking
related services. This restriction shall apply only to any client or
customer of Fidelity Southern or Bank with whom Executive had material
contact during the last twelve months of Executive's employment with
Fidelity Southern or Bank. "Material contact" means interaction between
Executive and the client or customer which takes place to further the
business relationship. "Clients" and "customers" include, but are not
limited to, depositors and commercial loan customers.
Section 12. Non-Solicitations of Employees.
Executive agrees that during his employment with Fidelity Southern or Bank
and for a period of eighteen (18) months after termination of his
employment with Fidelity Southern or Bank for any reason, Executive will
not recruit, hire or attempt to recruit or hire, directly or by assisting
others, any other employee of Fidelity Southern or Bank with whom
Executive had material contact during Executive's employment with Fidelity
Southern or Bank. This restriction shall apply only to recruiting, hiring
or attempting to recruit or hire any employee for the purpose of working
in the business of providing banking or banking related services.
Section 13. Confidentiality, Proprietary Information and Inventions.
(a) During the term of Executive's employment with Fidelity
Southern or Bank, and at all times thereafter, Executive shall
not use or disclose to others, without the prior written
consent of Fidelity Southern and Bank, any Trade Secrets (as
hereinafter defined) of Fidelity Southern or Bank, or any
subsidiary thereof or any of their customers, except for use
or disclosure thereof in the course of the business of
Fidelity Southern or Bank (or that of any subsidiary), and
such disclosure shall be limited to those who have a need to
know.
(b) During the term of Executive's employment with Fidelity
Southern or Bank, and for eighteen (18) months after
termination of his employment with Fidelity Southern or Bank
for any reason, Executive shall not use or disclose to others,
without the prior written consent of Fidelity Southern and
Bank, any Confidential Information (as hereinafter defined) of
Fidelity Southern or Bank, or any subsidiary thereof or any of
their customers, except for use or disclosure thereof in the
course of the
13
business of Fidelity Southern or Bank (or that of any
subsidiary), and such disclosure shall be limited to those who
have a need to know.
(c) Upon termination of employment with Fidelity Southern or Bank
for any reason, Executive shall not take with him any
documents or data of Fidelity Southern or Bank or any
subsidiary or of any customer thereof or any reproduction
thereof and agrees to return any such documents and data in
his possession at that time.
(d) Executive agrees to take reasonable precautions to safeguard
and maintain the confidentiality and secrecy and limit the use
of all Trade Secrets and Confidential Information of Fidelity
Southern, Bank and all subsidiaries and customers thereof.
(e) Trade Secrets shall include only such information constituting
a "Trade Secret" within the meaning of subsection 10-1-761(4)
of the Georgia Trade Secrets Act of 1990, including as
hereafter amended. Confidential Information shall include all
information and data which is protectable as a legal form of
property or non-public information of Fidelity Southern or
Bank or their customers, excluding any information or data
which constitutes a Trade Secret.
(f) Trade Secrets and Confidential Information shall not include
any information (A) which becomes publicly known through no
fault or act of Executive; (B) is lawfully received by
Executive from a third party after termination of employment
without a similar restriction regarding confidentiality and
use and without a breach of this Agreement; or (C) which is
independently developed by Executive and entirely unrelated to
the business of providing banking or banking related services.
(g) Executive agrees that any and all information and data
originated by Executive while employed by Fidelity Southern or
Bank and, where applicable, by other employees or associates
under Executive's direction or supervision in connection with
or as a result of any work or service performed under the
terms of Executive's employment, shall be promptly disclosed
to Fidelity Southern and Bank, shall become Fidelity Southern
and/or Bank's property, and shall be kept confidential by
Executive. Any and all such information and data, reduced to
written, graphic, or other tangible form and any and all
copies and reproduction thereof shall be furnished to Fidelity
Southern and Bank upon request and in any case shall be
returned to Fidelity Southern and Bank upon termination of
Executive's employment with Fidelity Southern or Bank.
(h) Executive agrees that Executive will promptly disclose to
Fidelity Southern and Bank all inventions or discoveries made,
conceived, or for the first time reduced to practice in
connection with or as a result of the work and/or services
Executive performs for Fidelity Southern or Bank.
14
(i) Executive agrees that he will assign the entire right, title,
and interest in any such invention or inventions and any
patents that may be granted thereon in any country in the
world concerning such inventions to Fidelity Southern and
Bank. Executive further agrees that Executive will, without
expense to Fidelity Southern or Bank, execute all documents
and do all acts which may be necessary, desirable, or
convenient to enable Fidelity Southern and Bank, at its
expense, to file and prosecute applications for patents on
such inventions, and to maintain patents granted thereon.
Section 14. Consideration for Non-Compete, Non-Solicitation and
Non-Disclosure Provisions.
In consideration of the Executive's undertakings set forth in Sections 10,
11, 12 and 13 above, with respect to periods after termination of
employment, Fidelity Southern or Bank will pay the Executive thirty six
(36) equal semi-monthly installments, each installment in an amount equal
to forty percent (40%) of his Annual Base Salary in effect immediately
prior to termination of employment divided by 24, commencing on the 15th
or last day of the month immediately following the date of termination of
employment, whichever date occurs first, and on the 15th and last day of
each calendar month until all such installments are paid. If the Executive
violates any of the undertakings set forth in Sections 10, 11, 12 and 13
of this Agreement, the Executive waives and forfeits any and all rights to
any further payments under this Agreement, including but not limited to,
any additional payments, compensation or Severance Benefits he may
otherwise be entitled to receive under this Agreement.
Section 15. Specific Performance.
Because of Executive's knowledge and experience, Executive agrees that
Fidelity Southern, the Bank and Affiliates shall be entitled to specific
performance, an injunction, temporary injunction or other similar
equitable relief in addition to all other rights and remedies it might
have for any violation of the undertakings set forth in Sections 10, 11,
12 or 13 of this Agreement. In any such court proceeding or arbitration,
Executive will not object thereto and claim that monetary damages are an
adequate remedy.
Section 16. Indemnification of Executive.
Fidelity Southern, the Bank or Affiliates shall indemnify Executive and
shall advance reasonable reimbursable expenses incurred by Executive in
any proceeding against Executive, including a proceeding brought by or in
the right of Fidelity Southern, the Bank or any Affiliate, as a director
or officer of Fidelity Southern, the Bank or any Affiliate thereof, except
claims and proceedings brought by Fidelity Southern, the Bank or any
Affiliate against Executive, to the fullest extent permitted under the
Georgia Business Corporation Code, and the Articles of Incorporation and
By-Laws of Fidelity Southern, the Bank or any applicable Affiliate, as
such Code, Articles or By-Laws may be amended from time to time hereafter.
15
Section 17. Applicable Law.
This Agreement will be construed and interpreted in accordance with the
laws of the State of Georgia without reference to its conflict of laws
rules.
Section 18. No Employment Contract.
Nothing contained in this Agreement shall be construed to be an employment
contract between the Executive and Fidelity.
Section 19. Severability.
In the event any provision of this Agreement is held illegal or invalid,
the remaining provisions of this Agreement will not be affected thereby.
Section 20. Successors.
(a) The Agreement will be binding upon and inure to the benefit of
the Fidelity Southern, the Bank, Affiliates, the Executive and
their respective heirs, representatives and successors.
(b) Fidelity Southern and Bank will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of Fidelity Southern, the Bank or Affiliates, as the
case may be, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that
Fidelity Southern and Bank would be required to perform it if
no such succession had taken place. As used in this Agreement,
"Fidelity Southern" will mean Fidelity Southern as herein
defined and any successor to its business and/or assets which
assumes this Agreement by operation of law or otherwise.
Section 21. Litigation Expenses.
(a) Fidelity Southern and the Bank agree to pay or reimburse
Executive promptly as incurred, to the full extent permitted
by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the
outcome thereof unless a court of competent jurisdiction
determines that the Executive acted in bad faith in initiating
the contest) by Fidelity Southern, the Bank, any Affiliate,
the Executive or others regarding the validity or
enforceability of, or liability under, any provision of this
Agreement (including as a result of any contest by the
Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in the Internal
Revenue Code Section 7872 (f)(2)(A); provided however, that
the reasonableness of the fees and expenses must be determined
by an independent arbitrator, using standard legal principles,
mutually agreed upon by Fidelity Southern or the Bank, as the
_________
Executive
_________________
Fidelity Southern
_________
Bank
16
case may be, and the Executive in accordance with rules set
forth by the American Arbitration Association.
(b) If there is any dispute between Fidelity Southern, the Bank or
any Affiliate and the Executive, in the event of any
termination of the Executive's employment by Fidelity
Southern, the Bank or Affiliate or by the Executive, then,
unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that the Executive
is not entitled to benefits under this Agreement, Fidelity
will pay or cause to be paid all amounts, and provide all
benefits, to the Executive and/or the Executive's family or
other Beneficiaries, as the case may be, that Fidelity or any
Affiliate would be required to pay or provide pursuant to this
Agreement. Fidelity Southern, the Bank and Affiliates will not
be required to pay any disputed amounts pursuant to this
subsection except upon receipt of an undertaking (which may be
unsecured) by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudge by such
court not to be entitled.
Section 22. Future Employers.
Fidelity Southern, the Bank or any Affiliate may notify anyone employing
Executive or evidencing an intention to employ Executive as to the
existence and provisions of this Agreement and may provide any such person
or organization a copy of this Agreement. Executive agrees that for a
period of 18 months after termination of Executive's employment with
Fidelity Southern or the Bank for any reason, Executive will provide
Fidelity Southern and Bank the identity of any employer Executive goes to
work for along with Executive's job title and anticipated job duties with
such employer.
Section 23. Miscellaneous.
(a) Amendments/Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and the
writing is signed by the Executive and Fidelity Southern and
the Bank. A waiver of any breach of or compliance with any
provision or condition of this Agreement is not a waiver of
similar or dissimilar provisions or conditions. This Agreement
may be executed in one or more counterparts, all of which will
be considered one and the same agreement.
(b) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been given upon receipt
when delivered by hand or upon delivery to the address of the
party determined pursuant to this Section 23 when delivered by
express mail, overnight courier or other similar method to
such address or by facsimile transmission (provided a copy is
also sent by registered or certified mail or by overnight
courier), or five (5) business days after deposit of the
notice in the US mail, if mailed by certified or
17
registered mail, with postage prepaid addressed to the
respective party as set forth below, which address may be
changed by written notice to the other parties:
If to Fidelity Southern or Bank:
Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
If to Executive:
H. Xxxxxx Xxxxxxx, Xx.
c/o Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
(c) Confidentiality. The Executive agrees that Executive will not
discuss the Executive's employment and resignation or
termination (including the terms of this Agreement) with any
representatives of the media, either directly or indirectly,
without the prior written consent and approval of Fidelity
Southern and the Bank.
Section 24. Entire Agreement.
No agreement or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by a party which
is not expressly set forth in this Agreement. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
FIDELITY SOUTHERN CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
FIDELITY SOUTHERN BANK
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
EXECUTIVE
/s/ H. Xxxxxx Xxxxxxx, Xx.
--------------------------------------------
H. Xxxxxx Xxxxxxx, Xx.
19
