Exhibit 10.17
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into this
____ day of ___________, 2000 by and among First Sterling Banks, Inc., a Georgia
corporation (hereinafter, the "Company"), and Xxxxxx X. Xxxxxxxxxx, Xx.
(hereinafter, "Executive"), to be effective as of the Effective Date, as defined
in Section 1.
BACKGROUND
Executive currently serves as the President of Main Street Bank ("MSB"), a
wholly owned subsidiary of Main Street Banks Incorporated ("Main Street"). The
Company and Main Street have entered into that certain Merger Agreement, dated
as of December 1, 1999 (the "Merger Agreement"), pursuant to which Main Street
will merge with and into the Company (the "Merger"). The Company desires to
employ Executive as Executive Vice President, Banking, of the Company following
the Merger, in accordance with the terms of this Agreement. Executive is willing
to serve as such in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. EFFECTIVE DATE. The effective date of this Agreement (the "Effective
Date") will be the date on which the effective time of the Merger occurs.
2. EMPLOYMENT. Executive is hereby employed on the Effective Date as
Executive Vice President, Banking, of the Company. In such capacity, Executive
shall have such responsibilities commensurate with such positions as set forth
in the bylaws of the Company and as shall be assigned to him by the Chief
Executive Officer or the Chief Operating Officer of the Company, or by the Board
of Directors of the Company. Executive will report directly to the Chief
Operating Officer of the Company.
3. EMPLOYMENT PERIOD. Unless earlier terminated herein in accordance with
Section 6 hereof, Executive's employment shall be for a two year term (the
"Employment Period"), beginning on the Effective Date. Beginning on the second
anniversary of the Effective Date and on each anniversary of the Effective Date,
the Employment Period shall, without further action by Executive or the Company,
be extended by an additional one-year period; PROVIDED, HOWEVER, that either
party may, by notice to the other, cause the Employment Period to cease to
extend automatically. Upon such notice, the Employment Period shall terminate
upon the expiration of the then-current term, including any prior extensions.
4. EXTENT OF SERVICE. During the Employment Period, and excluding any
periods of vacation to which Executive is entitled, Executive agrees to devote
his business time, attention, skill and efforts exclusively to the faithful
performance of his duties hereunder; PROVIDED, HOWEVER, that it shall not be a
violation of this Agreement for Executive to (i) devote reasonable periods of
time to charitable and community activities and, with the approval of the
Company, industry or professional activities, and/or (ii) manage personal
business interests and investments, so long as such activities do not materially
interfere with the performance of Executive's responsibilities under this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to date of this
Agreement, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of Executive's
responsibilities hereunder.
5. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During each year of the Employment Period, the
Company will pay to Executive annual base salary in the amount equal to U.S.
$142,662 ("Base Salary"), less normal withholdings, payable in equal monthly or
more frequent installments as are customary under the Company's payroll
practices from time to time. The Compensation Committee of the Board of
Directors of the Company shall review Executive's Base Salary annually and in
its sole discretion, subject to approval of the Board of Directors of the
Company, may increase Executive's Base Salary from year to year; provided that
annual increases of at least 3%, intended to approximate cost of living
increases, shall be automatic. The annual review of Executive's salary by the
Board will consider, among other things, Executive's own performance and the
performance of the Company and MSB, as well as any recommendations of an outside
consulting firm that may be engaged by the Company, from time to time, to
evaluate management compensation.
(b) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Employment
Period, Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable generally to
senior executive officers of the Company ("Peer Executives"), and on the same
basis as such Peer Executives, with full credit given for Executive's total
accumulated years of employment at Main Street or MSB for purposes of
determining vesting and eligibility.
(c) WELFARE BENEFIT PLANS. During the Employment Period, Executive
and Executive's family shall be eligible for participation in, and shall receive
all benefits under, the welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) ("Welfare Plans") to the extent
applicable generally to Peer Executives, with full credit given for Executive's
total accumulated years of employment at Main Street or MSB for purposes of
determining vesting and eligibility.
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(d) EXPENSES. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of the
Company to the extent applicable generally to Peer Executives.
(e) FRINGE BENEFITS. During the Employment Period, Executive shall be
entitled to fringe benefits in accordance with the plans, practices, programs
and policies of the Company in effect for Peer Executives. Without limiting the
foregoing, during the Employment Period, Executive shall be provided a car
allowance or a Company-owned car of a model appropriate to his position, as
determined by the Compensation Committee of the Board of Directors of the
Company.
(f) PAST SERVICE CREDIT. Executive shall be given full credit for
Executive's years of employment with Main Street or MSB and its predecessors for
all purposes under the plans, programs, policies, agreements and practices
covering Executive pursuant to this Section 5. The Company shall cause the
Welfare Plans to (i) waive, with respect to Executive, any waiting period and
restrictions and limitations for preexisting conditions or insurability, and
(ii) credit Executive with any deductible, co-payment, co-insurance, or maximum
out-of-pocket payments made by Executive under the Welfare Plans so as to reduce
the amount of any deductible, co-payment, co-insurance or maximum out-of-pocket
payments payable by Executive under the Welfare Plans.
6. TERMINATION OF AGREEMENT.
(a) DEATH, RETIREMENT OR DISABILITY. Executive's employment shall
terminate automatically upon Executive's death or Retirement during the
Employment Period. For purposes of this Agreement, "Retirement" shall mean
normal retirement as defined in the Company's then-current retirement plan, or
if there is no such retirement plan, "Retirement" shall mean voluntary
termination after age 65 with ten years of service. If the Company determines in
good faith that the Disability of Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below), it may give
to Executive written notice of its intention to terminate Executive's
employment. In such event, Executive's employment shall terminate effective on
the 30th day after receipt of such written notice by Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt,
Executive shall not have returned to full-time performance of Executive's
duties. For purposes of this Agreement, "Disability" shall mean the inability of
Executive, as determined by the Board, to substantially perform the essential
functions of his regular duties and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical or mental illness which
has lasted (or can reasonably be expected to last) for a period of six
consecutive months. At the request of Executive or his personal representative,
the Board's determination that the Disability of Executive has occurred shall be
certified by two physicians mutually agreed upon by Executive, or his personal
representative, and the Company. Failing such independent certification (if so
requested by Executive), Executive's termination shall be deemed a termination
by the Company without Cause and not a termination by reason of his Disability.
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(b) TERMINATION BY THE COMPANY. The Company may terminate Executive's
employment during the Employment Period with or without Cause. For purposes of
this Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive's duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness, and specifically
excluding any failure by Executive, after reasonable efforts, to meet
performance expectations), after a written demand for substantial performance is
delivered to Executive by the Chief Executive Officer, the Chief Operating
Officer or the Board of Directors of the Company which specifically identifies
the manner in which such officer or the Board believes that Executive has not
substantially performed Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to MSB or the
Company; or
(iii) a requirement by any state or federal authority
regulating the Company or MSB that Executive be removed from his office.
For purposes of this provision, no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of MSB or the Company and its
shareholders and subsidiaries. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of MSB
and the Company, its shareholders and subsidiaries. The cessation of employment
of Executive under subparagraph (i) or (ii) above shall not be deemed to be for
Cause unless and until there shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-fourths
of the entire membership of the Board of Directors the Company at a meeting of
such Board called and held for such purpose (after reasonable notice is provided
to Executive and Executive is given an opportunity, together with counsel, to be
heard before such Board), finding that, in the good faith opinion of such Board,
Executive is guilty of the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.
(c) TERMINATION BY EXECUTIVE. Executive's employment may be
terminated by Executive for Good Reason or no reason. For purposes of this
Agreement, "Good Reason" shall mean:
(i) without the written consent of Executive, a change in
Executive's status, title, position or responsibilities (including reporting
responsibilities) which, in Executive's reasonable judgment, represents an
adverse change from his status, title, position or responsibilities as in effect
at the Effective Date or, if greater, at any time thereafter; the assignment to
Executive of any duties or responsibilities which, in Executive's reasonable
judgment, are inconsistent with his status, title, position or
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responsibilities as in effect at the Effective Date or, if greater, at any time
thereafter; or any other change in condition or circumstances that in
Executive's reasonable judgment makes it materially more difficult for Executive
to carry out the duties and responsibilities of his then-existing office;
provided that Good Reason under this subparagraph (i) excludes an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(ii) a reduction, without the written consent of Executive, in
Executive's Base Salary as in effect on the Effective Date or as the same may be
increased from time to time, or any failure to pay Executive any compensation or
benefits to which he is entitled within five (5) days of the date due;
(iii) the failure by the Company (a) to continue in effect
(without reduction in benefit level and/or reward opportunities) any
compensation or employee benefit plan in which Executive participated as of the
Effective Date, or at any time thereafter, that is material to Executive's total
compensation, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan, or (b) to continue
Executive's participation therein (or in such substitute or alternative plan) on
a basis not materially less favorable, both in terms of the amount of benefits
provided and the level of Executive's participation therein relative to other
participants; or
(iv) the Company's requiring Executive, without his consent, to
be based at any office or location other than in Covington, Georgia or to travel
on Company business to a substantially greater extent than required immediately
prior to the Effective Date;
(v) the insolvency or the filing by any party, including the
Company or any of its subsidiaries, of a petition for bankruptcy of the Company
or any such subsidiary, which petition is not dismissed within sixty (60) days;
(vi) any failure by the Company to comply with and satisfy
Section 14(c) of this Agreement;
(vii) any purported termination by the Company of Executive's
employment otherwise than as expressly permitted by this Agreement; or
(viii) the material breach by the Company of any provision of
this Agreement.
Good Reason shall not include Executive's death or Disability. Executive's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder. Any good faith
determination of Good Reason made by Executive shall be conclusive.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause, or by
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 15(f) of this Agreement. For
purposes of this Agreement, a "Notice of
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Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so indicated
and (iii) specifies the termination date. If a dispute exists concerning the
provisions of this Agreement that apply to Executive's termination of
employment, the parties shall pursue the resolution of such dispute with
reasonable diligence. Within five (5) days of such a resolution, any party owing
any payments pursuant to the provisions of this Agreement shall make all such
payments together with interest accrued thereon at the rate provided in Section
1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
(e) DATE OF TERMINATION. "Date of Termination" means (i) if Executive's
employment is terminated other than by reason of death or Disability, the date
of receipt of the Notice of Termination, or any later date specified therein, or
(ii) if Executive's employment is terminated by reason of death or Disability,
the Date of Termination will be the date of death or the Disability Effective
Date, as the case may be.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) TERMINATION BY EXECUTIVE FOR GOOD REASON; TERMINATION BY THE
COMPANY OTHER THAN FOR CAUSE. If, during the Employment Period, the Company
shall terminate Executive's employment other than for Cause, or Executive shall
terminate employment for Good Reason, then:
(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
A. the sum of (1) Executive's Base Salary through the Date
of Termination to the extent not theretofore paid, (2) the product of (x)
Executive's target annual bonus for the year in which the Date of
Termination occurred (the "Target Annual Bonus") and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365, and (3) any
accrued vacation pay to the extent not theretofore paid, and (4) unless
Executive has elected a different payout date in a prior deferral election,
any compensation previously deferred by Executive (together with any
accrued interest or earnings thereon) to the extent not theretofore paid
(the sum of the amounts described in clauses (1), (2), (3) and (4) shall be
hereinafter referred to as the "Accrued Obligations"); and
B. the amount equal to two times the sum of (1)
Executive's Base Salary in effect as of the Date of Termination, and (2)
the Target Annual Bonus; and
(ii) for two years after the Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue benefits to Executive and/or
Executive's family at least equal to those which would have been provided to
them in accordance with the Welfare Plans described in Section 5(c) of this
Agreement if Executive's
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employment had not been terminated or, if more favorable to Executive, as in
effect generally at any time thereafter with respect to other Peer Executives
and their families, provided, however, that if Executive becomes re-employed
with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility; and
(iii) all of Executive's outstanding stock options and other
incentive awards from the Company in the nature of rights that may be exercised
shall become fully exercisable and all restrictions on Executive's outstanding
awards of restricted stock shall lapse; and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company (such other
amounts and benefits shall be hereinafter referred to as the "Other Benefits").
(b) DEATH; DISABILITY OR RETIREMENT. If Executive's employment is
terminated by reason of Executive's death, Disability or Retirement during the
Employment Period, this Agreement shall terminate without further obligations to
Executive or his legal representatives under this Agreement, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as used in this Section 7(b) shall include, without limitation, and
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
under such plans, programs, practices and policies relating to death, disability
or retirement benefits, if any, as are applicable to Executive on the Date of
Termination.
(c) TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION WITHOUT GOOD
REASON. If Executive's employment shall be terminated for Cause during the
Employment Period, or if Executive voluntarily terminates employment during the
Employment Period without Good Reason, this Agreement shall terminate without
further obligations to Executive, other than for payment of Accrued Obligations
(excluding the pro-rata bonus described in clause 2 of Section 7(a)(i)(A)) and
the timely payment or provision of Other Benefits.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company and for which Executive may qualify,
nor, subject to Section 15(d), shall anything herein limit or otherwise affect
such rights as Executive may have under any contract or agreement with the
Company. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
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9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) All determinations required to be made under this Section 9,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm selected by
Executive and reasonably acceptable to the Company as may be designated by
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and Executive within 15 business days of the
receipt of notice from Executive that there has been a Payment, or such earlier
time as is reasonably requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to Executive
within five days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
10. COSTS OF ENFORCEMENT. In any action taken in good faith relating to
the enforcement of this Agreement or any provision herein, Executive shall be
entitled to be paid any and all costs and expenses incurred by him in enforcing
or establishing his rights thereunder, including, without limitation, reasonable
attorneys' fees, whether suit be brought or not, and whether or not incurred in
trial, bankruptcy or appellate proceedings.
11. REPRESENTATIONS AND WARRANTIES. Executive hereby represents and
warrants to the Company that Executive is not a party to, or otherwise subject
to, any covenant not to compete with any
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person or entity, and Executive's execution of this Agreement and performance of
his obligations hereunder will not violate the terms or conditions of any
contract or obligation, written or oral, between Executive and any other person
or entity.
12. RESTRICTIONS ON CONDUCT OF EXECUTIVE.
(a) GENERAL. Executive and the Company understand and agree that the
purpose of the provisions of this Section 12 is to protect legitimate business
interests of the Company, as more fully described below, and is not intended to
eliminate Executive's post-employment competition with the Company PER SE, nor
is it intended to impair or infringe upon Executive's right to work, earn a
living, or acquire and possess property from the fruits of his labor. Executive
hereby acknowledges that the post-employment restrictions set forth in this
Section 12 are reasonable and that they do not, and will not, unduly impair his
ability to earn a living after the termination of this Agreement. Therefore,
subject to the limitations of reasonableness imposed by law, Executive shall be
subject to the restrictions set forth in this Section 12.
(b) DEFINITIONS. The following capitalized terms used in this Section
12 shall have the meanings assigned to them below, which definitions shall apply
to both the singular and the plural forms of such terms:
"COMPETITIVE POSITION" means any employment with a Competitor in
which Executive will use or is likely to use any Confidential Information or
Trade Secrets, or in which Executive has duties for such Competitor that relate
to Competitive Services and that are the same or similar to those services
actually performed by Executive for the Company;
"COMPETITIVE SERVICES" means the provision of banking products and
services similar in scope to those provided by the Company and its subsidiaries
as of the Effective Date.
"COMPETITOR" means any Person engaged, wholly or in part, in
Competitive Services.
"CONFIDENTIAL INFORMATION" means all information regarding the
Company, its activities, business or clients that is the subject of reasonable
efforts by the Company to maintain its confidentiality and that is not generally
disclosed by practice or authority to persons not employed by the Company, but
that does not rise to the level of a Trade Secret. "Confidential Information"
shall include, but is not limited to, financial plans and data concerning the
Company; management planning information; business plans; operational methods;
market studies; marketing plans or strategies; product development techniques or
plans; customer lists; details of customer contracts; current and anticipated
customer requirements; past, current and planned research and development;
business acquisition plans; and new personnel acquisition plans. "Confidential
Information" shall not include information that has become generally available
to the public by the act of one who has the right to disclose such information
without
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violating any right or privilege of the Company. This definition shall not limit
any definition of "confidential information" or any equivalent term under state
or federal law.
"DETERMINATION DATE" means the date of termination of Executive's
employment with the Company for any reason whatsoever or any earlier date
(during the Employment Period) of an alleged breach of the Restrictive Covenants
by Executive.
"PERSON" means any individual or any corporation, partnership, joint
venture, limited liability company, association or other entity or enterprise.
"PRINCIPAL OR REPRESENTATIVE" means a principal, owner, partner,
shareholder, joint venturer, investor, member, trustee, director, officer,
manager, employee, agent, representative or consultant.
"PROTECTED CUSTOMERS" means any Person to whom the Company has sold
its products or services or solicited to sell its products or services during
the twelve (12) months prior to the Determination Date.
"PROTECTED EMPLOYEES" means employees of the Company who were employed
by the Company at any time within six (6) months prior to the Determination
Date.
"RESTRICTED PERIOD" means the Employment Period and a period extending
two (2) years from the Date of Termination.
"RESTRICTED TERRITORY" means the areas within a 25 mile radius of each
banking office of the Company or its subsidiaries immediately after the
Effective Date.
"RESTRICTIVE COVENANTS" means the restrictive covenants contained in
Section 9(c) hereof.
"TRADE SECRET" means all information, without regard to form,
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, distribution lists or a
list of actual or potential customers, advertisers or suppliers which is not
commonly known by or available to the public and which information: (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. Without
limiting the foregoing, Trade Secret means any item of confidential information
that constitutes a "trade secret(s)" under the common law or statutory law of
the State of Georgia.
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(c) RESTRICTIVE COVENANTS.
(i) RESTRICTION ON DISCLOSURE AND USE OF CONFIDENTIAL
INFORMATION AND TRADE SECRETS. Executive understands and agrees that the
Confidential Information and Trade Secrets constitute valuable assets of the
Company and its affiliated entities, and may not be converted to Executive's own
use. Accordingly, Executive hereby agrees that Executive shall not, directly or
indirectly, at any time during the Restricted Period reveal, divulge, or
disclose to any Person not expressly authorized by the Company any Confidential
Information, and Executive shall not, directly or indirectly, at any time during
the Restricted Period use or make use of any Confidential Information in
connection with any business activity other than that of the Company. Throughout
the term of this Agreement and at all times after the date that this Agreement
terminates for any reason, Executive shall not directly or indirectly transmit
or disclose any Trade Secret of the Company to any Person, and shall not make
use of any such Trade Secret, directly or indirectly, for himself or for others,
without the prior written consent of the Company. The parties acknowledge and
agree that this Agreement is not intended to, and does not, alter either the
Company's rights or Executive's obligations under any state or federal statutory
or common law regarding trade secrets and unfair trade practices.
Anything herein to the contrary notwithstanding, Executive shall not be
restricted from disclosing or using Confidential Information that is required to
be disclosed by law, court order or other legal process; PROVIDED, HOWEVER, that
in the event disclosure is required by law, Executive shall provide the Company
with prompt notice of such requirement so that the Company may seek an
appropriate protective order prior to any such required disclosure by Executive.
(ii) NONSOLICITATION OF PROTECTED EMPLOYEES. Executive
understands and agrees that the relationship between the Company and each of its
Protected Employees constitutes a valuable asset of the Company and may not be
converted to Executive's own use. Accordingly, Executive hereby agrees that
during the Restricted Period Executive shall not directly or indirectly on
Executive's own behalf or as a Principal or Representative of any Person or
otherwise solicit or induce any Protected Employee to terminate his or her
employment relationship with the Company or to enter into employment with any
other Person.
(iii) RESTRICTION ON RELATIONSHIPS WITH PROTECTED CUSTOMERS.
Executive understands and agrees that the relationship between the Company and
each of its Protected Customers constitutes a valuable asset of the Company and
may not be converted to Executive's own use. Accordingly, Executive hereby
agrees that, during the Restricted Period, Executive shall not, without the
prior written consent of the Company, directly or indirectly, on Executive's own
behalf or as a Principal or Representative of any Person, solicit, divert, take
away or attempt to solicit, divert or take away a Protected Customer for the
purpose of providing or selling Competitive Services; PROVIDED, HOWEVER, that
the prohibition of this covenant shall apply only to Protected Customers with
whom Executive had Material Contact on the Company's behalf during the twelve
(12) months immediately preceding the termination of his employment hereunder.
For purposes of this Agreement, Executive had "Material Contact" with a
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Protected Customer if (a) he had business dealings with the Protected Customer
on the Company's behalf; (b) he was responsible for supervising or coordinating
the dealings between the Company and the Protected Customer; or (c) he obtained
Trade Secrets or Confidential Information about the customer as a result of his
association with the Company.
(iv) NONCOMPETITION WITH THE COMPANY. The parties acknowledge:
(A) that Executive's services under this Agreement require special expertise and
talent in the provision of Competitive Services and that Executive will have
substantial contacts with customers of the Company; (B) that pursuant to this
Agreement, Executive will be placed in a position of trust and responsibility
and he will have access to a substantial amount of Confidential Information and
Trade Secrets and that the Company is placing him in such position and giving
him access to such information in reliance upon his agreement not to compete
with the Company during the Restricted Period; (C) that due to his management
duties, Executive will be the repository of a substantial portion of the
goodwill of the Company and would have an unfair advantage in competing with the
Company; (D) that due to Executive's special experience and talent, the loss of
Executive's services to the Company under this Agreement cannot reasonably or
adequately be compensated solely by damages in an action at law; (E) that
Executive is capable of competing with the Company; and (F) that Executive is
capable of obtaining gainful, lucrative and desirable employment that does not
violate the restrictions contained in this Agreement. In consideration of the
compensation and benefits being paid and to be paid by the Company to Executive
hereunder, Executive hereby agrees that, during the Restricted Period, Executive
will not, without prior written consent of the Company, directly or indirectly
seek or obtain a Competitive Position in the Restricted Territory with a
Competitor; PROVIDED, HOWEVER, that the provisions of this Agreement shall not
be deemed to prohibit the ownership by Executive of any securities of the
Company or its affiliated entities or not more than five percent (5%) of any
class of securities of any corporation having a class of securities registered
pursuant to the Securities Exchange Act of 1934, as amended.
(d) ENFORCEMENT OF RESTRICTIVE COVENANTS.
(i) RIGHTS AND REMEDIES UPON BREACH. In the event Executive
breaches, or threatens to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the right and remedy to enjoin,
preliminarily and permanently, Executive from violating or threatening to
violate the Restrictive Covenants and to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of the Restrictive Covenants would cause
irreparable injury to the Company and that money damages would not provide an
adequate remedy to the Company. Such right and remedy shall be in addition to,
and not in lieu of, any other rights and remedies available to the Company at
law or in equity.
(ii) SEVERABILITY OF COVENANTS. Executive acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in time and scope and in
all other respects. The covenants set forth in this Agreement shall be
considered and construed as separate and independent covenants. Should any part
or provision of any covenant be held invalid, void or unenforceable in any court
of
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competent jurisdiction, such invalidity, voidness or unenforceability shall not
render invalid, void or unenforceable any other part or provision of this
Agreement. If any portion of the foregoing provisions is found to be invalid or
unenforceable by a court of competent jurisdiction because its duration, the
territory, the definition of activities or the definition of information covered
is considered to be invalid or unreasonable in scope, the invalid or
unreasonable term shall be redefined, or a new enforceable term provided, such
that the intent of the Company and Executive in agreeing to the provisions of
this Agreement will not be impaired and the provision in question shall be
enforceable to the fullest extent of the applicable laws.
13. ARBITRATION. Any claim or dispute arising under this Agreement shall be
subject to arbitration, and prior to commencing any court action, the parties
agree that they shall arbitrate all controversies. The arbitration shall be
conducted in Atlanta, Georgia, in accordance with the Employment Dispute Rules
of the American Arbitration Association and the Federal Arbitration Act, 9
U.S.C. Section1, et. seq. The arbitrator(s) shall be authorized to award both
liquidated and actual damages, in addition to injunctive relief, but no punitive
damages. Such an award shall be binding and conclusive upon the parties hereto,
subject to 9 U.S.C. Section10. Each party shall have the right to have the award
made the judgment of a court of competent jurisdiction.
14. ASSIGNMENT AND SUCCESSORS.
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.
15. MISCELLANEOUS.
(a) WAIVER. Failure of any party to insist, in one or more instances,
on performance by the other in strict accordance with the terms and conditions
of this Agreement shall not be deemed a waiver or relinquishment of any right
granted in this Agreement or of the future performance of any such term or
condition or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by the party making the waiver.
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(b) SEVERABILITY. If any provision or covenant, or any part thereof,
of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
(c) OTHER AGENTS. Nothing in this Agreement is to be interpreted as
limiting the Company from employing other personnel on such terms and conditions
as may be satisfactory to it.
(d) ENTIRE AGREEMENT. Except as provided herein, this Agreement
contains the entire agreement between the Company and Executive with respect to
the subject matter hereof and, from and after the Effective Date, this Agreement
shall supersede any other agreement between the parties with respect to the
subject matter hereof.
(e) GOVERNING LAW. Except to the extent preempted by federal law, and
without regard to conflict of laws principles, the laws of the State of Georgia
shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(f) NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or three days after mailing if mailed, first class,
certified mail, postage prepaid:
To Company: First Sterling Banks, Inc.
Xxxxxx X. Xxxxxxxx, President and CEO
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
To Executive: Xxxxxx X. Xxxxxxxxxx, Xx.
00 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
(g) AMENDMENTS AND MODIFICATIONS. This Agreement may be amended or
modified only by a writing signed by both parties hereto, which makes specific
reference to this Agreement.
(h) CONSTRUCTION. Each party and his or its counsel have reviewed
this Agreement and have been provided the opportunity to revise this Agreement
and accordingly, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement. Instead, the language of all parts of
this Agreement shall be construed as a whole, and according to its fair meaning,
and not strictly for or against any party.
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(signatures on following page)
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
FIRST STERLING BANKS, INC.
By:
-----------------------------
Title:
--------------------------
EXECUTIVE:
--------------------------------
Xxxxxx X. Xxxxxxxxxx, Xx.
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