EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of April 17, 2003, by and among CHEROKEE BANK,
N.A. (the "Bank"), a national bank; CHEROKEE BANKING COMPANY, a bank holding
company incorporated under the laws of the State of Georgia (the "Company")
(collectively, the Bank and the Company are referred to hereafter as the
"Employer"), and A.R. XXXXXXX, III, a resident of the State of Georgia (the
"Employee").
RECITALS:
The Employer desires to employ the Employee as the Senior Vice President
and Chief Financial Officer of the Bank and of the Company and the Employee
desires to accept such employment.
In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and
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their variant forms shall have the meaning set forth below:
1.1 "AGREEMENT" shall mean this Agreement and any exhibits incorporated
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herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "AFFILIATE" shall mean any business entity, which controls the
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Company, is controlled by or is under common control with the Company.
1.3 "AREA" shall mean the geographic area within the boundaries of
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Cherokee County, Georgia. It is the express intent of the parties that the Area
as defined herein is the area where the Employee performs services on behalf of
the Employer under this Agreement as of the Effective Date.
1.4 "BUSINESS OF THE EMPLOYER" shall mean the business conducted by the
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Employer, which is commercial banking.
1.5 "CAUSE" shall mean:
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1.5.1 With respect to termination by the Employer:
(a) A material breach of the terms of this Agreement by the
Employee, including, without limitation, persistent failure by the
Employee to follow reasonable written instructions or policies in a
satisfactory manner as determined by the President of the Bank or the
Company in his sole discretion, which level of unsatisfactory
performance remains uncured for a period of thirty (30) days following
the delivery of written notice of such breach to the Employee by the
Employer;
(b) Conduct by the Employee that amounts to fraud, dishonesty or
willful misconduct in the performance of his duties and
responsibilities hereunder;
(c) The conviction of the Employee of a felony;
(d) Conduct by the Employee that amounts to gross and willful
insubordination or inattention to his duties and responsibilities
hereunder; or
(e) Conduct by the Employee that results in removal from his
position as an officer or employee of the Bank or of the Company
pursuant to a written order by any regulatory agency with authority or
jurisdiction over the Bank or the Company, as applicable.
1.5.2 With respect to termination by the Employee, a material
diminution in the powers, responsibilities or duties of the Employee
hereunder or a material breach of the terms of this Agreement by the
Employer, which remains uncured after the expiration of thirty (30) days
following the delivery of written notice of such breach to the Employer by
the Employee.
1.6 "COMPANY INFORMATION" means Confidential Information and Trade
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Secrets.
1.7 "CONFIDENTIAL INFORMATION" means data and information relating to the
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business of the Employer (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Employee or of which the Employee became
aware as a consequence of or through the Employee's relationship to the Employer
and which has value to the Employer and is not generally known to its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Employer (except where
such public disclosure has been made by the Employee without authorization) or
that has been independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means.
1.8 "EFFECTIVE DATE" shall mean the date on which the Employer and the
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Employee execute the Agreement.
1.9 "PERMANENT DISABILITY" shall mean the total inability of the Employee
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to perform his duties under this Agreement for the duration of the short-term
disability period under the Employer's policy then in effect as certified by a
physician chosen by the Employer and reasonably acceptable to the Employee.
1.10 "TERM" shall mean an initial one-year period commencing on October 1,
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2002 and successive one-year periods thereafter, unless this Agreement is
terminated earlier, as provided for in Section 3 of this Agreement. The Term
shall not renew as of any successive one-year period following the initial
one-year period if either the Employer or the Employee gives notice to the other
no less than sixty (60) days prior to the first day of that one-year period of
its or his intent to allow the Agreement to expire as of the last day of the
immediately preceding one-year period.
1.11 "TRADE SECRETS" means Employer information including, but not limited
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to, technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which (a) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use; and (b) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy.
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2. DUTIES.
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2.1 POSITION. The Employee is employed initially as the Senior Vice
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President and Chief Financial Officer of the Bank or of the Company and, subject
to the direction of the President of the Bank or the Company shall perform and
discharge well and faithfully the duties normally associated with the Employee's
position, and in addition, any other duties which shall reasonably be assigned
to him from time to time by the Bank or the Company in connection with the
conduct of its business.
2.2 FULL-TIME STATUS. The Employee shall: (a) devote substantially all
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of his time, energy and skill during regular business hours to the performance
of the duties of his employment (reasonable vacations and reasonable absences
due to illness excepted) and faithfully and industriously perform such duties;
(b) diligently follow and implement all management policies and decisions
communicated to him by the President of either the Bank or the Company; and (c)
timely prepare and forward to the President of either the Bank or the Company
all reports and accounting as may be requested of the Employee.
2.3 PERMITTED ACTIVITIES. The Employee shall devote his entire business
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time, attention and energies to the Business of the Employer and shall not
during the Term be engaged (whether or not during normal business hours) in any
other business or professional activity, whether or not such activity is pursued
for gain, profit or other pecuniary advantage; but this shall not be construed
as preventing the Employee from (a) investing his personal assets in businesses
which (subject to clause (b) below) are not in competition with the Business of
the Employer and which will not require any services on the part of the Employee
in their operation or affairs and in which his participation is solely that of
an investor, (b) purchasing securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in him
collectively owning beneficially at any time five percent (5%) or more of the
equity securities of any business in competition with the Business of the
Employer; and (c) participating in civic and professional affairs, including
serving as the Mayor of Ball Ground, Georgia, and participating in organizations
and conferences, preparing or publishing papers or books or teaching so long as
such activities do not materially interfere with the performance of his duties
hereunder; provided, however, that the provisions of this Section 2.3 do not
prohibit the Employee from engaging in rental real estate leasing activities.
3. TERM AND TERMINATION.
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3.1 TERM. Except as provided in Section 3.2, this Agreement shall
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remain in effect for the Term.
3.2 TERMINATION. During the Term, the employment of the Employee under
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this Agreement may be terminated only as follows:
3.2.1 By the Employer:
(a) For Cause, upon written notice to the Employee pursuant
to Section 1.5.1 hereof, in which event the Employer shall have no
further obligation to the Employee except for the payment of any
amounts due and owing under Section 4 hereof on the effective date of
termination;
(b) Without Cause at any time, provided that the Employer
shall give the Employee thirty (30) days' prior written notice of its
intent to terminate, in which event the Employer
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shall be required to pay Employee severance at a rate equal to his
rate of Base Salary (defined below) then in effect for a period of
twelve (12) months following the effective date of termination to be
paid in equal monthly installments over a period not to exceed twelve
(12) months; or
(c) Upon the Permanent Disability of Employee at any time,
provided that the Employer shall give the Employee thirty (30) days'
prior written notice of its intent to terminate, in which event the
Employer shall have no further obligation to the Employee except for
the payment of any amounts due and owing under Section 4 hereof on the
effective date of termination.
3.2.2 By the Employee:
(a) For Cause, in which event the Employer shall be
required to pay Employee severance at a rate equal to his rate of Base
Salary (defined below) then in effect for a period of twelve (12)
months following the effective date of termination to be paid in equal
monthly installments over a period not to exceed twelve (12) months;
or
(b) Without Cause or upon the Permanent Disability of the
Employee, provided that the Employee shall give the Employer sixty
(60) days' prior written notice of his intent to terminate, in which
event the Employer shall have no further obligation to the Employee
except future payment of any amounts due and owing under Section 4
hereof on the effective date of the termination.
3.2.3 At any time upon mutual, written agreement of the parties,
in which event the Employer shall have no further obligation to the
Employee except for the payment of any amounts due and owing under
Section 4 hereof on the effective date of termination unless otherwise
set forth in the written agreement.
3.2.4 Notwithstanding anything in this Agreement to the contrary,
the Term shall end automatically upon the Employee's death, in which
event the Employer shall have no further obligation to the Employee
except for the payment of any amounts due and owing under Section 4 on
the effective date of termination.
3.2.5 In the event of a "change in control" (as defined below),
the Employee may elect (a) to negotiate a new employment agreement
with the acquiring party, or (b) to terminate his employment and
receive equal monthly installments for a period of twelve (12) months
totaling (1) times his Base Salary then in effect plus continued life,
health, LTD and dental insurance, including dependent coverage in full
and final settlement of all amounts due under this Agreement;
provided, however, that any action taken with the consent of the
Employee or any isolated, insubstantial and inadvertent action not
taken in bad faith and which is promptly remedied after notice is
given by the Employee shall not give rise to Employee's rights under
this Section 3.2.5. For purposes of this Section, the term "change in
control" shall mean: the acquisition by any person, entity or "group,"
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of (i)
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of twenty-five percent (25%) or more of the then
outstanding voting securities of the Company or the Bank (including an
acquisition by merger), or (ii) all or substantially all of the assets
of the Company or the Bank, in each case other than an
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acquisition of voting securities or assets of the Bank by an entity
controlled by or under common control (as "control" is defined for
purposes of the Exchange Act) with the Company.
3.2.6 In the event the Employer issues a notice that the original
Term shall not be renewed for its first one-year renewal period or,
when applicable, that any extended Term shall not be renewed by the
immediately succeeding one-year renewal period, all in accordance with
Section 1.10 above, for any reason other than Cause or the Employee's
death or Permanent Disability, the Employer shall be required to pay
Employee severance at a rate equal to his rate of Base Salary (defined
below) then in effect for a period of twelve (12) months following the
effective date of termination (the "Severance Period") to be paid in
equal monthly installments over a period not to exceed twelve (12)
months. In addition, during the Severance Period, the Employer shall
continue to provide life, health, LTD and dental insurance, including
dependent coverage during the Severance Period for the Employee and
the members of his immediate family.
4. COMPENSATION. During the Term, the Employee shall receive the following
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salary and benefits:
4.1 BASE SALARY. The Employee shall be compensated at an initial base
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rate of $85,000 annually (the "Base Salary then in effect"). Base Salary shall
be payable in accordance with the Employer's normal payroll practices. The
obligation for payment of Base Salary shall be apportioned between the Company
and the Bank and they may agree from time to time in their sole discretion. The
Employer will review the Employee's job performance, Base Salary and other
compensation annually following the end of each year. The Board of Directors
will set future Base Salary.
4.2 INCENTIVE COMPENSATION. The Employee shall be entitled to receive a
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performance bonus in accordance with the following terms:
(a) The President of the Bank may establish within ninety (90) days
after the beginning of each year pre-established performance measures, as
determined in its sole discretion, which, if established, will serve as the
basis for determining the Employee's bonus compensation for that year. The
Employer shall pay the Employee a cash bonus equal to the amount determined
in accordance with any performance measures so established.
(b) The following conditions must be satisfied as further conditions
to any commitment by the Bank to pay a bonus to the Employee pursuant to
this Section 4.2:
(i) the overall condition of the Bank must be "satisfactory" in the
opinion of the Office of the Comptroller of the Currency ("OCC")
as set forth in the most current OCC Report of Supervisory
Activity provided to the Bank and the Uniform Financial
Institution Rating of the Bank shall not be less than a "2"; and
(ii) the Bank shall be "well capitalized" as defined under regulations
promulgated by the OCC pursuant to the Federal Deposit Insurance
Corporation Improvement Act of 1991.
Any bonus which becomes payable pursuant to this Section 4.2 shall be paid
in a lump sum in cash within thirty (30) days after the close of the period for
which it is payable.
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4.3 STOCK OPTIONS. The Company may, in its discretion, grant to the
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Employee stock options to purchase shares of the Company's common stock.
4.4 AUTOMOBILE ALLOWANCE. The Employer will provide the Employee with an
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automobile allowance equal to $100 per month.
4.5 BUSINESS EXPENSES; MEMBERSHIPS. The Employer specifically agrees to
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reimburse the Employee for reasonable business (including travel) expenses
incurred by him in the performance of his duties hereunder, as approved from
time to time by the President of the Bank or the Company; provided, however,
that the Employee shall, as a condition of reimbursement, submit verification of
the nature and amount of such expenses in accordance with reimbursement policies
from time to time adopted by the Employer and in sufficient detail to comply
with rules and regulations promulgated by the Internal Revenue Service.
4.6 VACATION. The Employee shall be entitled to three (3) weeks of
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vacation during each one-year period during the Term, during which time his
compensation shall be paid in full.
4.7 BENEFITS. In addition to the benefits specifically described herein,
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the Employee shall be entitled to such benefits as may be available
from time to time for management employees of the Employer. All such
benefits shall be awarded and administered in accordance with the
Employer's standard policies and practices.
4.8 WITHHOLDING. The Employer may deduct from each payment of
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compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.
5. COMPANY INFORMATION.
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5.1 OWNERSHIP OF INFORMATION. All Company Information received or
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developed by the Employee while employed by the Employer will remain the sole
and exclusive property of the Employer.
5.2 OBLIGATIONS OF THE EMPLOYEE. The Employee agrees (a) to hold Company
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Information in strictest confidence, and (b) not to use, duplicate, reproduce,
distribute, disclose or otherwise disseminate Company Information or any
physical embodiments thereof and may in no event take any action causing or fail
to take any action necessary in order to prevent any Company Information from
losing its character or ceasing to qualify as Confidential Information or a
Trade Secret. In the event that the Employee is required by law to disclose any
Company Information, the Employee will not make such disclosure unless (and then
only to the extent that) the Employee has been advised by independent legal
counsel that such disclosure is required by law and then only after prior
written notice is given to the Company when the Employee becomes aware that such
disclosure has been requested and is required by law. This Section 5 shall
survive for a period of two (2) years following termination of this Agreement
for any reason with respect to Confidential Information, and shall survive
termination of this Agreement for any reason for so long as is permitted by the
then-current Georgia Trade Secrets Act of 1990, O.C.G.A. Sec.Sec.
10-1-760-10-1-767, with respect to Trade Secrets.
5.3 DELIVERY UPON REQUEST OR TERMINATION. Upon request by the Employer,
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and in any event upon termination of his employment with the Employer, the
Employee will promptly deliver to the
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Employer all property belonging to the Employer, including, without limitation,
all Company Information then in his possession or control.
6. NON-COMPETITION. The Employee agrees that during his employment by the
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Employer hereunder and, in the event of the termination of his employment for
any reason other than pursuant to Section 3.2.2(a), for a period of twelve (12)
months thereafter, he will not (except on behalf of or with the prior written
consent of the Employer), within the Area, either directly or indirectly, on his
own behalf or in the service or on behalf of others, as a principal, partner,
officer, director, manager, supervisor, administrator, consultant, executive
employee or in any other capacity which involves duties and responsibilities
similar to those undertaken for the Employer engage in any business which is the
same as or essentially the same as the Business of the Employer.
7. NON-SOLICITATION OF CUSTOMERS. The Employee agrees that during his
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employment by the Employer hereunder and for a period of twelve (12) months
thereafter, he will not (except on behalf of or with the prior written consent
of the Employer), within the Area, on his own behalf or in the service or on
behalf of others, solicit, divert or appropriate or attempt to solicit, divert
or appropriate, directly or by assisting others, any business from any of the
Employer's customers, including actively sought prospective customers, with whom
the Employee has or had material contact during the last two (2) years of his
employment, for purposes of providing products or services that are competitive
with those provided by the Employer.
8. NON-SOLICITATION OF EMPLOYEES. The Employee agrees that during his
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employment by the Employer hereunder and for a period of twelve (12) months
thereafter, he will not, within the Area, on his own behalf or in the service or
on behalf of others, solicit, recruit or hire away or attempt to solicit,
recruit or hire away, directly or by assisting others, any employee of the
Employer or its Affiliates, whether or not such employee is a full-time employee
or a temporary employee of the Employer or its Affiliates and whether or not
such employment is pursuant to written agreement and whether or not such
employment is for a determined period or is at will.
9. REMEDIES. The Employee agrees that the covenants contained in Sections 5
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through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in
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this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any other provision
of this Agreement. Further, if any provision of this Agreement is ruled invalid
or unenforceable by a court of competent jurisdiction because of a conflict
between the provision and any applicable law or public policy, the provision
shall be redrawn to make the provision consistent with and valid and enforceable
under the law or public policy.
11. NO SET-OFF BY THE EMPLOYEE. The existence of any claim, demand, action or
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cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this
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Agreement or otherwise, shall not constitute a defense to the enforcement by the
Employer of any of its rights hereunder.
12. NOTICE. All notices and other communications required or permitted under
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this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand, facsimile transmission or overnight courier, in which event the notice
shall be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to the Employer, to it at:
Cherokee Bank, N.A.
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxxxx 00000
(ii) If to the Employee, to him at:
A.R. Xxxxxxx, III
0000 Xxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxxxxx 00000
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
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any of its rights and obligations hereunder without the written consent of the
other party hereto.
14. WAIVER. A waiver by the Employer or the Employee of any breach of this
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Agreement by the other shall not be effective unless in writing, and no waiver
shall operate or be construed as a waiver of the same or another breach on a
subsequent occasion.
15. ARBITRATION. Any controversy or claim arising out of or relating to this
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contract, or the breach thereof, shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be entered
only in the State Court of Cherokee County or the federal court for the Northern
District of Georgia. The Employer and the Employee agree to share equally the
fees and expenses associated with the arbitration proceedings; provided,
however, that each party will pay for and bear the cost of its own experts,
evidence and counsel's fees, except that in the discretion of the arbitrator,
any award may include the cost of a party's counsel if the arbitrator expressly
determines that the party against whom the award is entered engaged in
arbitration in bad faith or as a delaying tactic. [EMPLOYEE MUST INITIAL HERE:
_____]
16. ATTORNEYS' FEES. In the event that the parties have complied with this
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Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award, the party
prevailing in such litigation shall be entitled to receive from the other party
all reasonable costs and expenses, including without limitation attorneys' fees,
incurred by the prevailing party in connection with such litigation, and the
other party shall pay such costs and expenses to the prevailing party promptly
upon demand by the prevailing party.
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17. APPLICABLE LAW. This Agreement shall be construed and enforced under and
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in accordance with the laws of the State of Georgia.
18. INTERPRETATION. Words importing any gender include all genders. Words
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importing the singular form shall include the plural and vice versa. The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement
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of the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
20. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall
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be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.
21. SURVIVAL. The obligations of the Employee pursuant to Sections 5, 6, 7, 8
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and 9 shall survive the termination of the employment of the Employee hereunder
for the period designated under each of those respective sections.
22. JOINT AND SEVERAL. The obligations of the Bank and the Company to Employee
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hereunder shall be joint and several.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Agreement as of the date first shown above.
THE BANK:
CHEROKEE BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
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Print Name: X.X. XXXXXXX
Title: CHAIRMAN
By: /s/ Xxxxxx Xxxxx
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Print Name: XXXXXX XXXXX, JR.
Title: COMPENSATION COMMITTEE CHAIRMAN
THE COMPANY:
CHEROKEE BANKING COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Print Name: X.X. XXXXXXX
Title: CHAIRMAN
By: /s/ Xxxxxx Xxxxx
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Print Name: XXXXXX XXXXX, JR.
Title: COMPENSATION COMMITTEE CHAIRMAN
THE EMPLOYEE:
/s/ A. R. Xxxxxxx, III
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A.R. XXXXXXX, III
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