XXXXXXXX HOLDING COMPANY
RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT made as of this 13th day of August,
1996, by and among XXXXXXXX HOLDING COMPANY, a Georgia
corporation (the "Corporation"), FIRST NATIONAL BANK OF NORTHWEST
GEORGIA, a wholly-owned subsidiary of the Corporation (the
"Bank") and XXXXXXX X. XXXXX (the "Executive");
WHEREAS, the Bank has two divisions, Peoples First
National Bank in Cartersville, Georgia ("Cartersville") and
Xxxxxxx First National Bank in Calhoun, Georgia ("Calhoun"); and
WHEREAS, the Executive is employed by Cartersville and
is an integral part of the Bank's management team; and
WHEREAS, the Corporation and the Bank wish to assure
both themselves and their key employees of continuity of
management and objective control of the Corporation and the Bank;
and
WHEREAS, the Corporation and the Bank consider it
desirable and in their best interests to provide the Executive
with an added incentive to advance the interests of the
Corporation and the Bank through grants of restricted stock of
the Corporation, subject to the terms and conditions provided for
herein; and
WHEREAS, the Corporation and the Bank further consider
it desirable and in their best interests to enter into an
agreement which provides that in the event the Executive's
employment is terminated in conjunction with a change in control
of the Corporation, the Executive shall, subject to the terms and
conditions provided for herein, receive a termination payment,
which payment is not intended to exceed the compensation the
Executive could have reasonably expected to receive in absence of
a change in control of the Corporation;
NOW, THEREFORE, the parties agree as follows:
1. RESTRICTED STOCK AWARD. (a) Subject to the
provisions of Paragraphs 2 and 3 below, the Corporation agrees to
award to Executive shares of the Corporation's restricted Common
Stock, $0.50 par value per share (the "Restricted Stock"), if
Cartersville's "Average Loan Balance" (as defined in Paragraph
1(b) below) determined during the period December 1 until January
31 of each applicable year (the "Measurement Period") equals or
exceeds the applicable Target Level for such year as set forth in
the following schedule:
Number of Shares of
Measurement Period for Average Loan Restricted Stock to
Determining Average Balance be Awarded if Target
Loan Balance Target Level Level is Achieved
------------ ------------ --------------------
December 1- January $ 40,000,000 833 shares
31, 1997 or or
$ 45,000,000 1,666 shares
December 1- January $ 48,000,000 833 shares
31, 1998 or or
$ 53,000,000 1,666 shares
December 1- January $ 60,000,000 834 shares
31, 1999 or or
$ 70,000,000 1,668 shares
December 1- January $ 85,000,000 All remaining shares
31, 2000
December 1- January $ 95,000,000 All remaining shares
31, 2001
December 1- January $110,000,000 All remaining shares
31, 2002
In no event shall the aggregate number of shares of Restricted
Stock awarded to Executive pursuant to this Agreement exceed a
maximum of 5,000 shares. If, during a particular Measurement
Period, the higher of two applicable Target Levels is achieved,
only the number of shares applicable to the higher Target Level
shall be awarded.
(b) Cartersville's Average Loan Balance shall be
computed by the Corporation's accountants net of "allowance for
loan and lease losses" in accordance with industry banking
standards. For purposes of computing the Average Loan Balance:
(i) loans originated by Cartersville in which Xxxxxxxx Bank and
Trust ("Xxxxxxxx") participates shall be counted; (ii) loans
originated by Xxxxxxxx in which Calhoun participates shall be
disregarded; and (iii) loans originated by unrelated banks in
which Cartersville participates shall count only if such loans
are fully priced in accordance with Cartersville's origination
standards for comparable loans.
(c) Following the determination of the Cartersville's
Average Loan Balance for the applicable Measurement Period, the
Executive will be issued a certificate (or certificates)
representing the shares of Restricted Stock, if any, awarded for
such Measurement Period. For purposes of this Agreement, the
shares of Restricted Stock shall be deemed to have been awarded
on the December 31 occurring during the applicable Measurement
Period (the "Award Date").
(d) On and after the Award Date, the Executive will be
considered a shareholder with respect to all of the shares of
awarded Restricted Stock (including those shares which remain
forfeitable), including the right to vote such shares, and to
receive all dividends and other distributions with respect to
such shares. If, as a result of a stock split, stock dividend,
combination of shares, or any other exchange for other securities
by reclassification, reorganization, merger, recapitalization or
otherwise, the Executive as owner of the shares of Restricted
Stock will be entitled to new, additional or different shares of
stock or securities; any such new, additional or different shares
or securities shall be subject to the same rights and
restrictions as the shares of Restricted Stock.
2. VESTING OF RESTRICTED STOCK. The Restricted Stock
shall become nonforfeitable in accordance with the following
provisions:
(a) Shares of Restricted Stock awarded to Executive
pursuant to Paragraph 1 above shall become nonforfeitable as of
March 20, 2008, provided Executive is employed by the Bank or
Corporation on such date. Except as provided in Paragraph 2(b)
below, in the event Executive terminates his employment for any
reason prior to such date, any and all awards of Restricted Stock
made to Executive shall be immediately forfeited and canceled as
of Executive's date of termination without any payment therefor.
(b) Notwithstanding the provisions of (a) above, in
the event of a Change in Control of the Corporation, as defined
in Paragraph 4, all shares of Restricted Stock which had been
awarded to Executive pursuant to Paragraph 1 above shall become
nonforfeitable.
3. RESTRICTIONS ON RESTRICTED STOCK. The Restricted
Stock shall be subject to the following restrictions:
(a) During his employment with the Corporation and/or
the Bank, the Executive shall not have the right to sell,
transfer, assign, pledge, hypothecate or otherwise convey his
interest in the shares of Restricted Stock (whether or not such
interest is nonforfeitable), without the prior written consent of
the Corporation. Any attempt to transfer or assign the shares of
Restricted Stock in violation of this transfer restriction shall
not be recognized by the Corporation and shall be null and void.
The transfer and assignment restrictions provided for in this
Paragraph (a) shall expire upon the earlier of March 20, 2008 or
a Change in Control as defined in Paragraph 4.
(b) The share certificate(s) representing the shares
of Restricted Stock shall have endorsed thereon a legend
reflecting the restrictions of this Paragraph 3.
4. BENEFITS PAYABLE UPON CHANGE IN CONTROL.
(a) No provision of this Paragraph 4 shall be
operative unless, during the term of this Agreement, there has
been a Change in Control of the Corporation. Upon such a Change
in Control of the Corporation, all the provisions of this
Paragraph 4 shall become operative immediately.
(b) If a Change in Control occurs during the term of
this Agreement and the Executive's employment is terminated (i)
within twelve (12) months following the date of the Change in
Control, or (ii) within six (6) months prior to the date of the
Change in Control as a part of such Change in Control, as a
result of Involuntary Termination or Voluntary Termination, the
Executive shall be entitled to a lump sum cash payment equal to
2.99 times the greater of the Executive's total compensation as
shown on his federal W-2 Form (or similar form replacing such
form) or the Executive's annualized rate of salary, each
determined for the calendar year preceding the calendar year in
which the Executive's employment is terminated, reduced by the
Market Value of the shares of nonforfeitable Restricted Stock to
which the Executive is entitled pursuant to Paragraph 2 of this
Agreement. The payment to the Executive shall be made not later
than fifteen (15) days after his termination of employment.
(c) For the purposes of this Paragraph 4, the
following terms shall have the meanings set forth below:
(i) The term "Change in Control" shall mean (A)
the acquisition, directly or indirectly, by any
"person" (excluding any "person" who on the date hereof
owns or controls 10% or more of the voting power of the
Corporation's Common Stock), as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended, within any twelve (12) month
period of securities of the Corporation representing an
aggregate of twenty-five percent (25%) or more of the
combined voting power of the Corporation's then
outstanding securities; provided, that for purposes of
this definition, "acquisition" shall not include shares
which are received by a person through gift,
inheritance, under a will or otherwise through the laws
of descent and distribution; (B) during any period of
two consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the
Corporation (the "Board"), cease for any reason to
constitute at least a majority thereof, unless the
election of each new director was approved in advance
by a vote of at least a majority of the directors then
still in office who were directors at the beginning of
the period; or, (C) the occurrence of any other event
or circumstance which is not covered by (i) or (ii)
above which the Board determines affects control of the
Corporation and adopts a resolution that such event or
circumstance constitutes a Change in Control for the
purposes of this Agreement.
(ii) The term "Cause" shall mean and be limited
to any act that constitutes, on the part of the
Executive, fraud, dishonesty, a felony or gross
malfeasance of duty and that directly results in
material injury to the Corporation or the Bank.
(iii) The term "Disability" shall mean the
Executive's inability as a result of physical or mental
incapacity to substantially perform his duties for the
Corporation or the Bank on a full-time basis for a
period of six (6) months.
(iv) The term "Involuntary Termination" shall
mean termination of employment that is involuntary on
the part of the Executive and that occurs for reasons
other than for Cause, Disability, voluntary retirement
(including early retirement) within the meaning of the
Corporation's retirement plan, or death.
(v) The term "Voluntary Termination" shall mean
termination of employment that is voluntary on the part
of the Executive, and, in the judgment of the
Executive, is due to (A) a reduction of the Executive's
responsibilities resulting from the assignment to the
Executive of any duties inconsistent with his position,
duties or responsibilities as in effect immediately
prior to the Change in Control; (B) a reduction in the
Executive's compensation or benefits, or (C) a forced
relocation of the Executive or significant increase in
the Executive's travel requirements. A termination
shall not be considered voluntary within the meaning of
this Agreement if such termination is a result of
Cause, Disability, voluntary retirement (including
early retirement) within the meaning of the
Corporation's retirement plan, or death of the
Executive.
(vi) The term "Market Value" shall mean a price
in no event less than the average price per share paid for the
Corporation's Common Stock during the three (3) month period
preceding the occurrence of a Change in Control.
5. LIMITATION OF BENEFITS.
(a) Notwithstanding anything in this Agreement to the
contrary, if any of the compensation or benefits payable, or to
be provided, to the Executive by the Corporation under this
Agreement are treated as Excess Severance Payments (whether alone
or in conjunction with payments or benefits outside of this
Agreement), the compensation and benefits provided under this
Agreement shall be modified or reduced in the manner provided in
Paragraph (b) below to the extent necessary so that the
compensation and benefits payable or to be provided to Executive
under this Agreement that are treated as Severance Payments, as
well as any compensation or benefits provided outside of this
Agreement that are so treated, shall not cause the Corporation to
have paid an Excess Severance Payment. In computing such amount,
the parties shall take into account all provisions of Code
Section 280G, and the regulations thereunder, including making
appropriate adjustments to such calculation for amounts
established to be Reasonable Compensation.
(b) In the event that the amount of any Severance
Payments which would be payable to or for the benefit of the
Executive under this Agreement must be modified or reduced to
comply with this Paragraph, the Executive shall direct which
Severance Payments are to be modified or reduced; provided,
however, that no increase in the amount of any payment shall be
made without the consent of the Corporation.
(c) This Paragraph shall be interpreted so as to avoid
the imposition of excise taxes on the Executive under Section
4999 of the Code or the disallowance of a deduction to the
Corporation pursuant to Section 280G(a) of Code with respect to
amounts payable under this Agreement. In connection with any
Internal Revenue Service examination, audit or other inquiry, the
Corporation and Executive agree to take action to provide, and to
cooperate in providing, evidence to the Internal Revenue Service
(and, if applicable, the state revenue department) that the
compensation and benefits provided under this Agreement do not
result in the payment of Excess Severance Payments.
(d) In addition to the limits otherwise provided in
this Article, to the extent permitted by law the Executive may in
his sole discretion elect to reduce (or change the timing of) any
payments he may be eligible to receive under this Agreement to
prevent the imposition of excise taxes on the Executive under
Section 4999 of the Code or otherwise reduce or delay liability
for taxes owed under the Code.
(e) For the purposes of this Paragraph 5, the
following terms shall have the meanings set forth below:
(i) The term "Excess Severance Payment" shall
have the same meaning as the term "excess parachute
payment" defined in Section 280G(b)(1) of the Code.
(ii) The term "Severance Payment" shall have the
same meaning as the term "parachute payment" defined in
Section 280G(b)(2) of the Code.
(iii) The term "Reasonable Compensation" shall
have the same meaning as provided in Section 280G(b)(4)
of the Code.
6. MISCELLANEOUS. (a) This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his
executors, representatives and assigns, and the Corporation and
the Bank and their successors and assigns.
(b) This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of
Georgia.
(c) The Executive represents and warrants that he is
acquiring the shares of Restricted Stock for investment purposes
only, and not with a view to distribution thereof. The Executive
is aware that the shares of Restricted Stock will not be
registered under the federal or any state securities laws and
that, in addition to the other restrictions on the shares, they
may not be able to be transferred unless an exemption from
registration is available. By making this award of Restricted
Stock, the Corporation is not undertaking any obligation to
register the shares of Restricted Stock under any federal or
state securities laws.
(d) This Agreement and the award of Restricted Stock
shall not be construed as giving to the Executive the right to be
retained in the employ of the Corporation, the Bank or any of
their affiliates.
(e) The Executive shall be responsible for all
federal, state and local income taxes payable with respect to
this award of Restricted Stock. The Executive shall have the
right to make such elections under the Internal Revenue Code of
1986, as amended, as are available in connection with this award
of Restricted Stock.
(f) This Agreement may only be amended by an
instrument in writing executed by both of the parties.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
Executive: XXXXXXXX HOLDING COMPANY
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxxx
Title:Chairman
FIRST NATIONAL BANK OF
NORTHWEST GEORGIA
By: /s/ Xxxxx X. L_________
Title: President
