Exhibit 10.2
FIDELITY SOUTHERN CORPORATION
FIDELITY BANK
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 19th day
of January, 2006, by and among FIDELITY SOUTHERN CORPORATION ("Fidelity"), a
Georgia Corporation, FIDELITY BANK (the "Bank"), a Georgia banking corporation,
and XXXXX X. XXXXXX, XX. ("Xxxxxx"). The Employment Agreement among Fidelity,
the Bank and Xxxxxx dated March 17, 2005 (the "2005 Agreement") is hereby
terminated and replaced by this Agreement effective as of January 1, 2006;
provided, however, that Xxxxxx shall retain all rights to any incentive
compensation payable under the 2005 Agreement which was earned and payable as of
the date hereof.
WHEREAS, Xxxxxx is the Chairman, Chief Executive Officer and President of
Fidelity and Chairman and Chief Executive Officer of the Bank;
WHEREAS, Fidelity and the Bank agree to continue to employ Xxxxxx as Chief
Executive Officer, subject to his election, to provide the services set forth
herein; and
WHEREAS, Xxxxxx agrees to accept such employment and to continue to provide
such services in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein made and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT/DUTIES.
(a) Fidelity shall employ Xxxxxx as the President and Chief Executive
Officer and the Bank shall employ Xxxxxx as Chief Executive Officer during the
term of his employment as set forth in this Agreement and Xxxxxx hereby accepts
such employment. Xxxxxx also agrees to serve as the Chairman of the Board of
Directors of Fidelity (the "Board") and of the Bank upon his election to such
positions.
(b) Xxxxxx shall be the senior executive officer of Fidelity and shall
be responsible for the day-to-day operations of the business of Fidelity and
shall have such authority consistent with such positions and necessary for the
conduct of such business under the general direction of the Board of Directors
of Fidelity.
(c) Xxxxxx agrees that he will at all times and to the best of his
ability and experience faithfully perform all of the duties that may be required
of him pursuant to the terms of this Agreement and shall comply with all
policies and procedures adopted by the Board of Directors or any committee
thereof. Xxxxxx shall devote his full business time to the performance of his
obligations hereunder.
(d) The term of employment of Xxxxxx shall be for a term of three
(3) years, commencing as of January 1, 2005, and may be extended upon written
agreement of the parties.
(e) Xxxxxx shall be prohibited from serving as a director of other
businesses and as a member of any committee of the board(s) of directors thereof
unless the Board formally has approved such service before Xxxxxx becomes any
such director or member of any committee of such board(s) of directors.
2. COMPENSATION.
(a) Base Salary. During the term of the employment of Xxxxxx
hereunder, Fidelity and the Bank will pay to Xxxxxx an aggregate base salary
("Base Salary") at the rate of $500,000 per year, payable in arrears in equal
semi-monthly payments, subject to applicable withholdings and deductions. In the
event of the disability of Xxxxxx, to the extent payments are received by him
under any employer sponsored disability program and/or under any disability
policy the premiums of which are paid by Fidelity or the Bank, the payments
hereunder are to be reduced by an amount equal to any such disability payments
that are intended to replace all or a portion of any compensation Xxxxxx loses
due to such disability.
(b) Incentive Compensation. Fidelity and the Bank shall pay to Xxxxxx
the incentive compensation ("Incentive Compensation") determined as set forth in
Attachment A hereto. Xxxxxx shall be eligible to participate in incentive plans
and programs hereafter adopted as determined by the Board or the Compensation
Committee of the Board.
(c) Employee Benefit Programs. Xxxxxx shall be eligible to participate
in all employee benefit programs, including medical, dental and hospitalization
programs, now or hereafter made available by Fidelity to its employees and/or
executives, subject to terms and conditions of such programs, including
eligibility. It is understood that Fidelity reserves the right to modify and
rescind any program or adopt new programs in its sole discretion.
(d) Life Insurance for Fidelity. Fidelity may, in its sole discretion,
maintain key man life insurance on the life of Xxxxxx and designate Fidelity as
the beneficiary. Xxxxxx agrees to execute any documents necessary to effect the
issuance of such policy. Xxxxxx hereby acknowledges that he has consented to the
purchase and maintenance by Fidelity of the Split Dollar Insurance Plan (the
"Split Dollar Plan") in the face amount of $400,000 dated October 3, 1984
(including all amendments and replacement and substitute policies, as hereafter
mutually agreed in writing). The policies purchased and maintained by Fidelity
under the Split Dollar Plan shall be maintained by Fidelity at all times
hereafter, including after the termination of this Agreement or Xxxxxx'x
Termination of Employment. In addition, Fidelity and the Bank agree to maintain
three Flexible Premium Adjustable Life Insurance, Universal Life policies issued
by Great-West Life & Annuity Insurance Company ("Great-West") one in the face
amount of $6 million, one issued by Life Investors Insurance Company of America
("Life Investors") in the face amount of $800,000 and one issued by Mass Mutual
Financial Group ("Mass Mutual") in the face amount of $800,000 each of which is
payable to beneficiaries designated by Xxxxxx or his estate or trust in lieu
thereof, at all times hereafter
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(except as provided in Section 3(e)), regardless of the termination of this
Agreement or Xxxxxx'x Termination of Employment hereunder including a
Termination of Employment pursuant to Section 3.
(e) Vacation. Xxxxxx is entitled to five (5) weeks vacation each year.
Vacation shall be taken at such times as not to materially interfere with the
business of Fidelity. The vacation time must be taken prior to the end of each
calendar year or as otherwise mutually agreed in writing, otherwise it expires
to the extent not taken.
(f) Expenses. Fidelity shall pay all reasonable expenses incurred by
Xxxxxx in the performance of his responsibilities and duties for Fidelity,
including without limitation, dues payable to the Atlanta Athletic Club and the
Capital City Club and to such reasonable civic organizations of Xxxxxx'x choice.
Xxxxxx shall submit to Fidelity periodic statements of all expenses so incurred
in accordance with the policies of Fidelity then in effect. Subject to such
reviews as Fidelity may deem reasonably necessary, Fidelity shall, promptly in
the ordinary course of business, reimburse Xxxxxx for the full amount of all
such expenses advanced by Xxxxxx.
(g) Automobile. Fidelity will continue to provide Xxxxxx with an
appropriate automobile for his use and will maintain and insure it at Fidelity's
expense.
3. EARLY TERMINATION.
(a) For Cause. (i) Notwithstanding the foregoing, Xxxxxx may have a
Termination of Employment by the Board "for cause" (as hereinafter defined) at
any time upon 10 business days' prior written notice. The term "for cause" shall
mean (A) the commission of a felony or any other crime involving moral turpitude
or the pleading of nolo contendere to any such act, (B) the commission of any
act or acts of dishonesty when such acts are intended to result or result,
directly or indirectly, in gain or personal enrichment of Xxxxxx or any related
person or affiliated company and are intended to cause harm or damage to
Fidelity, the Bank or their subsidiaries, (C) the illegal use of controlled
substances, (D) the misappropriation or embezzlement of assets of Fidelity, the
Bank or their subsidiaries, (E) the breach of any other material term or
provision of this Agreement to be performed by Xxxxxx (other than pursuant to
Sections 4, 5, 6 or 7) which have not been cured within thirty (30) days of
receipt of written notice of such breach from the Board or the board of
directors of the Bank, or (F) the breach of any provision of Section 4, 5, 6 or
7 during his employment.
(ii) Upon a Termination of Employment for cause, Fidelity and the
Bank shall have no further obligation to pay any compensation to Xxxxxx or make
available to Xxxxxx participation under any employee benefit program for periods
after the effective date of the Termination of Employment for cause. Upon such a
Termination of Employment, the Base Salary which accrued as of the termination
date, the Incentive Compensation payable pursuant to Section 2(b) for the
periods of employment and accrued but unused vacation pay will be paid after the
effective date of termination on the next normal payroll payment date.
(b) Other Termination by Fidelity.
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(i) Xxxxxx may have a Termination of Employment by Fidelity or
the Bank for any reason (other than for cause, death or total disability (as
defined in Section 3(d)(iii) below)) at any time upon at least 90 days' prior
written notice. Upon such a Termination of Employment, the Base Salary which
accrued as of the termination date, the Incentive Compensation payable pursuant
to Section 2(b) for the periods of employment and accrued but unused vacation
pay will be paid after the effective date of termination on the next normal
payroll payment date. Xxxxxx'x right to additional compensation after the
effective date of termination shall cease, except that if Xxxxxx executes a
"Release" (as defined below) within the time period specified by Fidelity or the
Bank, and does not revoke such Release, Xxxxxx will be paid severance equal to
the excess of (i) three times his then Base Salary over (ii) the aggregate
amount payable under Section 8 below. If Xxxxxx is not a Specified Employee (as
defined below) such severance benefit will be payable in 72 equal semi-monthly
installments commencing on the 15th or last day of the month immediately
following the date of the 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. If Xxxxxx is a Specified
Employee, such severance benefit shall not be payable until the first 15th or
last day of the month which is at least six months after Xxxxxx'x Termination of
Employment. All installments, which would have otherwise been required to be
made over such six-month period if Xxxxxx had not been a Specified Employee
shall be paid to Xxxxxx in one lump sum payment as soon as administratively
feasible after the first 15th or last day of the month which is at least six
months after Xxxxxx'x Termination of Employment. After the lump sum payment, the
remaining semi-monthly installments (each equal to 1/72 of the total severance
benefit) will continue on the 15th and last day of each calendar month until all
such installments are paid.
(ii) Additionally, if Xxxxxx timely executes and does not revoke
a Release and elects such continued participation, the employee welfare benefits
as provided in Section 2(c) shall be continued for eighteen (18) months from the
date of termination at a cost to Xxxxxx not to exceed the amounts paid by
executives for such employee welfare benefits; provided, however, that if
continued participation in any of such employee welfare benefit plans is not
possible under the terms of such plans or any provision of law would create any
adverse tax effect for Xxxxxx, Fidelity or the Bank, due to such participation,
Fidelity will provide substantially identical benefits directly or through an
insurance arrangement or pay Xxxxxx'x costs for such welfare benefits if
continued by Xxxxxx, including as permitted under ERISA. Notwithstanding the
above, if Xxxxxx is a Specified Employee and if Fidelity or the Bank determines
that any portion of such employee welfare benefits are subject to Section 409A
of the Code, then to the extent necessary to avoid taxation under Section 409A,
Xxxxxx will be required to pay for such employee welfare benefits during the
six-month period following his Termination of Employment; provided; however,
that at the end of such six-month period, Fidelity or the Bank will reimburse
Xxxxxx for such payments.
(iii) For purposes of this Agreement, the term "Release" means a
general release that releases Fidelity, 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 Xxxxxx or Xxxxxx'x successors and
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beneficiaries might then have against them (excluding any claims for vested
benefits under any employee pension plan of Fidelity or the Bank).
(v) If Xxxxxx violates any of the undertakings set forth in
Sections 4, 5, 6 and 7 of this Agreement after the Termination of Employment,
any additional compensation and benefits under Sections 3(b)(i) & 3(b)(ii) shall
cease.
(vi) Subsequent to the date of any written notice of termination
provided to Xxxxxx pursuant to Section 3(b) or by Xxxxxx to Fidelity pursuant to
Section 3(c)(ii), Fidelity shall engage the independent accounting firm
regularly utilized by Fidelity ("Accounting Firm") to provide to Fidelity and
Xxxxxx, at Fidelity's expense, a determination of whether any compensation
payable to Xxxxxx pursuant to Sections 3(b)(i) & 3(b)(ii) (alone or when added
to all other compensation paid or payable to Xxxxxx by Fidelity and the Bank)
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 compensation payable to Xxxxxx pursuant to
Sections 3(b)(i) & 3(b)(ii) (alone or when added to all other compensation paid
or payable to Xxxxxx by Fidelity and the Bank) 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 Xxxxxx 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 Xxxxxx
pursuant to Sections 3(b)(i) & 3(b)(ii) were reduced (assuming latest payments
are reduced first) so that no amount payable to Xxxxxx hereunder (alone or when
added to all other compensation paid or payable to Xxxxxx by Fidelity and the
Bank) constitutes a Parachute Payment than he 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 Xxxxxx hereunder were not so reduced; and (C), if the
Accounting Firm determines in (B) above that Xxxxxx would realize a higher
amount if the compensation payable to Xxxxxx were so reduced, the amount of the
reductions. All determinations shall be made on a present value basis. The
Accounting Firm shall provide to Fidelity and to Xxxxxx a written report of its
determinations hereunder no later than forty-five (45) days prior to the
termination date. No later than fifteen (15) days following his receipt of the
report from the Accounting Firm, Xxxxxx will notify Fidelity in writing of any
disagreement with said report, and, in such case, Fidelity shall direct the
Accounting Firm to promptly discuss its determinations with an accountant or
counsel designated by Xxxxxx in his written notice and seek to reach an
agreement regarding same no later than fifteen (15) days prior to the
termination date, with Fidelity and Xxxxxx, each bearing the cost of their own
accountants or counsel. If no agreement can be reached within thirty (30) days
after the expiration of said fifteen (15) day period, the matter shall be
promptly submitted to binding arbitration under Section 16 hereof by either
party. The determinations so made shall be binding on the parties. If it is
determined hereunder that Xxxxxx 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 him pursuant to Sections 3(b)(i) &
3(b)(ii) were reduced (assuming latest payments are reduced first) so that no
amount payable to Xxxxxx hereunder constitutes a Parachute Payment, then the
amounts payable to Xxxxxx pursuant to Sections 3(b)(i) & 3(b)(ii) shall be so
reduced.
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(vii) 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 Xxxxxx that should not have been paid or distributed
under this Section 3(b) ("Overpayments"), or that additional amounts should be
paid or distributed to Xxxxxx under this Section 3(b) ("Underpayments"). If
based on either the assertion of a deficiency by the Internal Revenue Service
against Fidelity or Xxxxxx, 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 all purposes as a loan ab initio that
Xxxxxx 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 Xxxxxx
to Fidelity unless, and then only to the extent that, the deemed loan and
payment would either reduce the amount on which Xxxxxx 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
Xxxxxx promptly by Fidelity. Whether an Overpayment or Underpayment has occurred
may be determined in substantially the same manner as the original
determination.
(viii) Fidelity and Xxxxxx shall each provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
Fidelity or Xxxxxx, 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 3(b).
(ix) The Federal, state and local income or other tax returns
filed by Xxxxxx shall be prepared and filed on a consistent basis with the
determination with respect to the excise tax payable by Xxxxxx. Xxxxxx, 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.
(c) Termination by Xxxxxx. (i) Xxxxxx may have a Termination of
Employment by Xxxxxx at any time upon at least 90 days' prior written notice to
Fidelity and the Bank. Upon such Termination of Employment Xxxxxx'x right to
compensation after the effective date of termination shall cease. Upon such a
Termination of Employment, the Base Salary which accrued as of the termination
date, the Incentive Compensation payable pursuant to Section 2(b) for the
periods of employment and accrued but unused vacation pay will be paid after the
effective date of termination on the next normal payroll payment date.
(ii) Notwithstanding the foregoing, if Fidelity or the Bank fails
to perform any of its material obligations hereunder and such failure continues
for sixty (60) days after written notice thereof by Xxxxxx to the Board,
termination by Xxxxxx of this Agreement for such failure shall be deemed to
constitute a Termination of Employment by Fidelity and the Bank without cause
under Section 3(b) of this Agreement. A reduction in the
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responsibilities and authority of Xxxxxx as provided in Section l(b) shall
constitute a breach of a material obligation of Fidelity and the Bank hereunder.
(d) Termination Upon Death or Disability.
(i) Xxxxxx shall have a Termination of Employment upon his death,
or (10) business days after written notice by Fidelity of termination during the
continuance of the total disability (as hereinafter defined) of Xxxxxx.
(ii) Upon Termination of Employment upon death or by Fidelity
upon total disability, Xxxxxx'x right to compensation after the effective date
of termination shall cease . Upon such a Termination of Employment, the Base
Salary which accrued as of the termination date, the Incentive Compensation
payable pursuant to Section 2(b) for the periods of employment and accrued but
unused vacation pay will be paid after the effective date of termination on the
next normal payroll payment date. Fidelity and the Bank shall have no obligation
to pay any compensation for periods after the effective date of such termination
under this Section 3(d).
(iii) The term "total disability" means the inability of Xxxxxx
to substantially perform his duties hereunder for a continuous period of ninety
(90) days unless such period is extended in writing by Fidelity, in which event,
for such greater period. Total disability shall be deemed to commence upon the
expiration of such continuous ninety (90) day period or such greater period, if
so extended. In the event of any dispute as to the "total disability" of Xxxxxx
or the expiration of said ninety (90) day period or such greater period, if so
extended, the matter shall be resolved by the decision of a single physician,
serving as an arbitrator, mutually selected or appointed in accordance with the
rules of the American Arbitration Association, Atlanta, Georgia. The decision of
the arbitrator shall be binding on all parties hereto. Xxxxxx agrees to submit
medical records requested and to submit to such examination and testing
reasonably requested by such physician.
(e) Life Insurance Policies. Termination of this Agreement or the
benefits payable hereunder for any reason, including pursuant to Section 3(a),
(b), (c) or (d) hereof, shall not terminate the duty of Fidelity and the Bank to
maintain or continue the Split Dollar Plan, or the insurance policies with
Great-West, Life Investors and Mass Mutual pursuant to Section 2(d) hereof,
including any substitute plan or policy hereafter mutually agreed to.
Notwithstanding any other provision of this Agreement, if Xxxxxx is a Specified
Employee and if Fidelity determines that the maintenance of the Split Dollar
Plan, or the insurance policies with Great-West, Life Investors and Mass Mutual
is subject to Section 409A of the Code, then, to the extent necessary to avoid
taxation under Section 409A, Xxxxxx will be required to pay for the maintenance
of the Split Dollar Plan, and the insurance policies with Great-West, Life
Investors and Mass Mutual during the six-month period following his Termination
of Employment; provided; however, that at the end of such six-month period,
Fidelity or the Bank will reimburse Xxxxxx for such payments.
4. COVENANT NOT TO COMPETE. Xxxxxx agrees that during his employment with
Fidelity or the Bank and for a period of eighteen (18) months after Xxxxxx'x
Termination of
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Employment for any reason other than a Termination of Employment by Fidelity or
the Bank, that Xxxxxx 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. Xxxxxx agrees that because
of the nature of Fidelity's and the Bank's business, the nature of Xxxxxx'x job
responsibilities, and the nature of the Confidential Information and Trade
Secrets of Fidelity and the Bank which Fidelity and the Bank will give Xxxxxx
access to, any breach of this provision by Xxxxxx would result in the inevitable
disclosure of Fidelity's and the Bank's Trade Secrets and Confidential
Information to its direct competitors.
5. NON-SOLICITATIONS OF CLIENTS AND CUSTOMERS. Xxxxxx agrees that during
his employment with Fidelity or the Bank and for a period of eighteen (18)
months after Xxxxxx'x Termination of Employment for any reason, Xxxxxx will not
directly or indirectly solicit, contact, call upon, communicate with or attempt
to communicate with any client or customer of Fidelity or the Bank for the
purpose of providing banking or banking related services. This restriction shall
apply only to any client or customer of Fidelity or the Bank with whom Xxxxxx
had material contact during the last twelve months of Xxxxxx'x employment with
Fidelity or the Bank. "Material contact" means interaction between Xxxxxx 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, SBA or construction loan customers.
6. NON-SOLICITATIONS OF EMPLOYEES. Xxxxxx agrees that during his employment
with Fidelity or the Bank and for a period of eighteen (18) months after
Xxxxxx'x Termination of Employment for any reason, Xxxxxx will not recruit, hire
or attempt to recruit or hire, directly or by assisting others, any other
employee of Fidelity or the Bank with whom Xxxxxx had material contact during
Xxxxxx'x employment with Fidelity or the 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.
7. CONFIDENTIALITY, PROPRIETARY INFORMATION AND INVENTIONS.
(a) During the term of Xxxxxx'x employment with Fidelity or the Bank,
and at all times thereafter, Xxxxxx shall not use or disclose to others, without
the prior written consent of Fidelity and the Bank, any Trade Secrets (as
hereinafter defined) of Fidelity or the Bank, or any subsidiary thereof or any
of their customers, except for use or disclosure thereof in the course of the
business of Fidelity or the 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 Xxxxxx'x employment with Fidelity or the Bank,
and for eighteen (18) months after Xxxxxx'x Termination of Employment for any
reason, Xxxxxx shall not use or disclose to others, without the prior written
consent of Fidelity and the Bank, any Confidential Information (as hereinafter
defined) of Fidelity or the Bank, or any subsidiary thereof or any of their
customers, except for use or disclosure thereof in the course of the business of
Fidelity or the Bank (or that of any subsidiary), and such disclosure shall be
limited to those who have a need to know.
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(c) Upon Xxxxxx'x Termination of Employment for any reason, Xxxxxx
shall not take with him any documents or data of Fidelity or the 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) Xxxxxx 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, the 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 or the 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 Xxxxxx;
(B) is lawfully received by Xxxxxx 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
Xxxxxx and entirely unrelated to the business of providing banking or banking
related services.
(g) Xxxxxx agrees that any and all information and data originated by
Xxxxxx while employed by Fidelity or the Bank and, where applicable, by other
employees or associates under Xxxxxx'x direction or supervision in connection
with or as a result of any work or service performed under the terms of Xxxxxx'x
employment, shall be promptly disclosed to Fidelity and the Bank, shall become
Fidelity and/or the Bank's property, and shall be kept confidential by Xxxxxx.
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 and the Bank upon request and in any case shall be returned to
Fidelity and the Bank upon Xxxxxx'x Termination of Employment.
(h) Xxxxxx agrees that Xxxxxx will promptly disclose to Fidelity and
the 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 Xxxxxx performs for Fidelity or the Bank.
(i) Xxxxxx 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 and
the Bank. Xxxxxx further agrees that Xxxxxx will, without expense to Fidelity or
the Bank, execute all documents and do all acts which may be necessary,
desirable, or convenient to enable Fidelity and the Bank, at its expense, to
file and prosecute applications for patents on such inventions, and to maintain
patents granted thereon.
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8. CONSIDERATION FOR NON-COMPETE, NON-SOLICITATION AND NON-DISCLOSURE
PROVISIONS. In consideration of Xxxxxx'x undertakings set forth in Sections 4,
5, 6 and 7 above, with respect to periods after Termination of Employment,
Fidelity or the Bank will pay Xxxxxx a "Non-Compete Benefit" as described below.
If Xxxxxx is not a Specified Employee, the Non-Compete Benefit will be payable
in 36 equal semi-monthly installments, each installment in an amount equal to
sixty percent (60%) of his Base Salary in effect immediately prior to the
Termination of Employment divided by 24, commencing on the 15th or last day of
the month immediately following the date of the 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. If Xxxxxx
is a Specified Employee, the Non-Compete Benefit shall not become payable until
the first 15th or last day of the month which is at least six months after
Xxxxxx'x Termination of Employment. All installments which would have otherwise
been required to be made over such six-month period if Xxxxxx had not been a
Specified Employee, shall be paid to Xxxxxx in one lump sum payment as soon as
administratively feasible after the first 15th or last day of the month which is
at least six months after Xxxxxx'x Termination of Employment. After the lump sum
payment, the remaining semi-monthly installments (each equal to sixty percent
(60%) of his Base Salary in effect immediately prior to Termination of
Employment divided by 24) will continue on the 15th and last day of each
calendar month until all such installments are paid. If Xxxxxx violates any of
the undertakings set forth in Sections 4, 5, 6 and 7 of this Agreement, Xxxxxx
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 he may otherwise be entitled to receive under this Agreement,
whether pursuant to this Section or otherwise.
9. SPECIFIC PERFORMANCE. Because of Xxxxxx'x knowledge and experience,
Xxxxxx agrees that Fidelity shall be entitled to specific performance, an
injunction, temporary injunction or other similar relief without the posting of
a bond or other security in addition to all other rights and remedies it might
have for any violation of the undertakings set forth in Sections 4, 5, 6 and 7
of this Agreement. In any such court proceeding, Xxxxxx will not object thereto
and claim that monetary damages are an adequate remedy.
10. MAXIMUM PAYMENTS. The total amount payable hereunder as severance pay
(as set forth in Sections 3(b)(i) & 3(b)(ii)) and consideration for the
non-compete, non-solicitation and non-disclosure provisions (as set forth in
Section 8) shall not exceed three times Xxxxxx'x Base Salary.
11. NO SETOFF. Nothing in this Agreement will limit or otherwise affect
such rights as Xxxxxx may have under any other contract or agreement with
Fidelity, the Bank or Affiliates, except as specifically set forth in such
contract or agreement. Amounts which constitute vested benefits or which Xxxxxx
is otherwise entitled to receive under any employee benefit plan, policy,
practice or program of or any contract or agreement (collectively, "programs")
with Fidelity or the Bank at or subsequent to Xxxxxx'x Termination of Employment
will be payable in accordance with such programs.
12. INDEMNIFICATION OF XXXXXX. Fidelity shall indemnify Xxxxxx and shall
advance reimbursable expenses incurred by Xxxxxx in any proceeding against
Xxxxxx, including a
10
proceeding brought in the right of Fidelity, as a director or officer of
Fidelity or any subsidiary thereof, except claims and proceedings brought
directly by Fidelity against Xxxxxx, to the fullest extent permitted under the
Articles of Incorporation and By-Laws of Fidelity and the Georgia Business
Corporation Code, as amended from time to time. Such indemnities and advances
shall be paid to Xxxxxx on the next normal payroll payment date after Xxxxxx'x
rights to such amounts are no longer in dispute; provided, however, that if
Xxxxxx is a Specified Employee such payments shall not be made before the date
that is six months after the date of Xxxxxx'x Termination of Employment.
13. 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 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 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 party:
If to Fidelity or the Bank:
Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Board of Directors
If to Xxxxxx:
Xxxxx X. Xxxxxx, Xx.
c/o Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
14. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon and enforceable by Xxxxxx and his estate, personal representatives
and heirs, and by Fidelity and the Bank and its successors and assigns. This
Agreement and the payments hereunder may not be assigned, pledged or otherwise
hypothecated by Xxxxxx.
15. ENTIRE AGREEMENT. This Agreement, including the Split Dollar Plan, the
insurance policies with Great-West, Life Investors and Mass Mutual and the
Xxxxxx Management Continuity Agreement are intended by the parties hereto to
constitute the entire understanding of the parties with respect to the
employment of Xxxxxx as an employee and officer of Fidelity and election as
Chairman of the Board of Fidelity and the Bank and supersedes all prior
agreements and understandings, oral or written.
16. BINDING ARBITRATION/ATTORNEY FEES. Except as otherwise specifically
provided herein, including as provided in Section 9 hereof, Specific
Performance, all disputes arising under this Agreement shall be submitted to and
settled by arbitration. Arbitration shall
11
be by one (1) arbitrator selected in accordance with the rules of the American
Arbitration Association, Atlanta, Georgia ("AAA") by the AAA. The hearings
before the arbitrator shall be held in Atlanta, Georgia and shall be conducted
in accordance with the rules existing on the date thereof of the AAA to the
extent not inconsistent with this Agreement. All reasonable costs and expense
incurred in connection with any such arbitration proceedings and those incurred
in any civil action to enforce the same shall be borne by the party against
which the decision is rendered. To the extent that Xxxxxx is entitled to
reimbursement of any such costs and expenses, such reimbursements shall be paid
to Xxxxxx on the next normal payroll payment date after Xxxxxx'x rights to such
reimbursements are no longer in dispute; provided, however, that if Xxxxxx is a
Specified Employee such payments shall not be made before the date that is six
months after the date of Xxxxxx'x Termination of Employment.
17. AMENDMENTS. This Agreement may not be amended or modified except in
writing signed by both parties.
18. WAIVERS. The failure of either party to insist upon the strict
performance of any provision hereof shall not constitute a wavier of such
provision. All waivers must be in writing.
19. FUTURE EMPLOYERS. Fidelity or the Bank may notify anyone employing
Xxxxxx or evidencing an intention to employ Xxxxxx as to the existence and
provisions of this Agreement and may provide any such person or organization a
copy of this Agreement. Xxxxxx agrees that for a period of 18 months after
Xxxxxx'x Termination of Employment for any reason, Xxxxxx will provide Fidelity
and the Bank the identity of any employer Xxxxxx goes to work for along with
Xxxxxx'x job title and anticipated job duties with any such employer.
20. GOVERNING LAW. This Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with
the laws of the State of Georgia, excluding its conflicts of laws.
21. COMPLIANCE WITH SECTION 409A. This Agreement is intended to satisfy the
requirements of Code Section 409A and shall be construed and interpreted in
accordance therewith.
23. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
(a) "Affiliate" means any entity with whom Fidelity or the Bank would
be considered a single employer under Code Sections 414(b) or 414(c).
(b) "Specified Employee" means an employee who is (i) an officer of
Fidelity having annual compensation greater than $135,000 (with certain
adjustments for inflation after 2005), (ii) a five-percent owner of Fidelity or
(iii) a one-percent owner of Fidelity having annual compensation greater than
$150,000. For purposes of this Section, no more than 50 employees (or, if
lesser, the greater of three or 10 percent of the employees) shall be treated as
officers. Employees who (i) normally work less than 17 1/2 hours per week, (ii)
normally work not more than 6 months during any year, (iii) have not attained
age
12
21 or (iv) are included in a unit of employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement between
employee representatives and Fidelity (except as otherwise provided in
regulations issued under the Code) shall be excluded for purposes of determining
the number of officers. For purposes of this Section, the term "five-percent
owner" ("one-percent owner") means any person who owns more than five percent
(one percent) of the outstanding stock of Fidelity or stock possessing more than
five percent (one percent) of the total combined voting power of all stock of
Fidelity. For purposes of determining ownership, the attribution rules of
Section 318 of the Code shall be applied by substituting "five percent" for "50
percent" in Section 318(a)(2) and the rules of Sections 414(b), 414(c) and
414(m) of the Code shall not apply. For purposes of this Section, the term
"compensation" has the meaning given such term by Section 414(q)(4) of the Code.
The determination of whether Xxxxxx is a Specified Employee will be based on a
December 31 identification date such that if Xxxxxx satisfies the above
definition of Specified Employee at any time during the 12-month period ending
on December 31, he will be treated as a Specified Employee if he has a
Termination of Employment during the 12-month period beginning on the first day
of the fourth month following the identification date. This definition is
intended to comply with the specified employee rules of Section 409A(a)(2)(B)(i)
of the Code and shall be interpreted accordingly.
(c) "Termination of Employment" means the termination of Xxxxxx'x
employment with Fidelity, the Bank and all Affiliates; provided, however, that
Xxxxxx will not be considered as having had a Termination of Employment if (i)
Xxxxxx continues to provide services to Fidelity, the Bank or any Affiliate as
an employee at an annual rate that is at least equal to 20 percent of the
services rendered, on average, during the immediately preceding three full
calendar years of employment (or, if employed less than three years, such lesser
period) and the annual remuneration for such services is at least equal to 20
percent of the average annual remuneration earned during the final three full
calendar years of employment (or if less, such lesser period), (ii) Xxxxxx
continues to provide services to Fidelity, the Bank or any Affiliate in a
capacity other than as an employee and such services are provided at an annual
rate that is 50 percent or more of the services rendered, on average, during the
immediately preceding three full calendar years of employment (or, if employed
less than three years, such lesser period) and the annual remuneration for such
services is 50 percent or more of the annual remuneration earned during the
final three full calendar years of employment (or, if less, such lesser period)
or (iii) Xxxxxx is on military leave, sick leave or other bona fide leave of
absence (such as temporary employment by the government) so long as the period
of such leave does not exceed six months, or if longer, so long as the
individual's right to reemployment with Fidelity, the Bank or any Affiliate is
provided either by statute or by contract. If the period of leave exceeds six
months and Xxxxxx'x right to reemployment is not provided either by statute or
by contract, the Termination of Employment will be deemed to occur on the first
date immediately following such six-month period. For purposes of this Section,
annual rate of providing services shall be determined based upon the measurement
used to determine Xxxxxx'x base compensation.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
FIDELITY SOUTHERN CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
FIDELITY BANK
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
XXXXXX
/s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxx, Xx.
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ATTACHMENT A
INCENTIVE COMPENSATION
For each calendar year during the term of the Agreement, the Compensation
Committee ("Committee") of the Board of Directors of Fidelity will establish in
its sole discretion (after discussion with Xxxxxx) a target consolidated net
income of Fidelity Southern Corporation and Subsidiaries ("Fidelity") before the
Incentive Compensation provided herein, excluding extraordinary items
(determined in accordance with generally accepted accounting principles)
("Target Income") for such calendar year prior to the commencement of the
calendar year. Xxxxxx will be paid incentive compensation ("Incentive
Compensation") in cash depending upon the percentage in excess of Target Income
achieved for such calendar year.
In the event the consolidated net income of Fidelity for any calendar year
before the Incentive Compensation provided herein and excluding extra-ordinary
items, determined in accordance with generally accepted accounting principles
("Income") achieved exceeds 100% of the Target Income, the Incentive
Compensation shall be the product of (i) $100,000 times (ii) the incremental
percentage of the Target Income between 100% of the Target Income and 105% of
the Target Income. For example, if the percentage of Income achieved is 104% of
the Target Income, the Incentive Compensation is $80,000. No Incentive
Compensation will be paid if the percentage of Target Income achieved is 100% or
less. The maximum Incentive Compensation shall be $100,000.
The Compensation Committee may modify the Target Income for any calendar
year at any time during a calendar year to reflect changes resulting from
changes in accounting principles or practices of Fidelity and changes in the
business plan.
In the event of any dispute as to the achieved Income, it shall be such
amount as set forth in Fidelity's certified financial statements less the amount
of this Incentive Compensation for such calendar year.
The right of Xxxxxx to receive the Incentive Compensation hereunder related
to a calendar year shall vest on the last day of such calendar year. In the
event Xxxxxx is entitled pursuant to the Agreement to Incentive Compensation for
a period of less than a full year, the Incentive Compensation for such year
shall vest on the last day of his employment and the amount shall be determined
as set forth hereinabove for the calendar year prorated based upon the
percentage of the year Xxxxxx was employed under the Agreement.
Payment is to be made in cash promptly after the amount is determined but
in no event later than March 15 of the calendar year following the calendar year
for which the Incentive Compensation is earned. The Committee, in its sole
discretion, during a calendar year may make a non-refundable prepayment of a
portion of the Incentive Compensation to Xxxxxx if it believes that the partial
payment will not exceed the amount of the Incentive Compensation for that
calendar year.
FIDELITY SOUTHERN CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
FIDELITY BANK
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, Compensation Committee
XXXXXX
/s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------------
Xxxxx X. Xxxxxx, Xx.
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