EMPLOYMENT SECURITY AGREEMENT
This Employment Security Agreement (the "Agreement") is entered into as
of the 9th day of June, 1999, by and between Pinnacle Bank, N.A., a Georgia
corporation ("Employer"), and Xxxxx X. Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed by Employer as its President;
WHEREAS, Employer desires to provide certain security to Executive in
connection with Executive's employment with Employer; and
WHEREAS, Executive and Employer desire to enter into this Agreement in
order to memorialize their understanding with respect to the economic security
that Employer is providing to Executive with respect to his employment;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Term. The term of this Agreement shall be the period beginning on
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the date first above written and terminating on the date Executive becomes
eligible for early retirement benefits under the federal Social Security program
(presently age 62) (the "Term").
2. Benefits Upon Termination of Employment. If, at any time during the
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Term, the employment of Executive with Employer is terminated by Employer for
any reason other than Good Cause, by Executive's Voluntary Action, or due to the
Disability of Executive, the following provisions shall apply:
a. Employer shall, during the Severance Period, pay Executive
compensation equal to $125,000.00 annually computed and paid compensation in
monthly or other installments, similar to those being received by Executive as
of the date of this Agreement Such payments shall commence as soon as
practicable following the date of termination of employment
b. Executive shall receive any and all benefits accrued under any
Retirement Plans to the date of termination of employment, the amount, form and
time of payment of such benefits to be determined by the terms of such
Retirement Plans, and Executive's employment shall be deemed to have terminated
by reason of retirement under each such Plan under circumstances that have the
most favorable result for Executive hereunder.
c. For purposes of all Retirement Plans, Executive shall be given
service credit for all purposes for, and shall be deemed to be an Executive of
Employer during, the Severance Period, notwithstanding the fact that he is not
an Executive of Employer or any Affiliate thereof during the Severance Period;
but only to the extent the terms of any such Retirement Plans and applicable law
permit such credit or deemed Executive treatment. It is understood that the
Executive will not be eligible for participation in the Employer's 40 1 (k) Plan
during the Term in any year he does not meet the 500 hours worked requirement.
d. During the Severance Period, Executive and his spouse will
continue to be covered until Executive is eligible for Medicare coverage
(presently age 65) by all Welfare Plans maintained by Employer in which he or
his spouse were participating immediately prior to the date of his termination,
as if he continued to be an Executive of Employer (the "Welfare Plans
Continuation Coverage"); provided that, if participation in any one or more of
such Welfare Plans is not possible under the terms thereof, Employer will
provide substantially identical benefits. If, however, Executive obtains
employment with another employer during the Severance Period, and Executive and
his spouse are entitled to coverage under the new employer's health and medical
insurance plans, such Welfare Plans Continuation Coverage shall be provided only
to the extent that it exceeds the coverage of any substantially similar plans
provided by his new employer. Should Executive die after payments begin under
this Agreement but before he reaches age 62, health and medical insurance
coverage shall continue for his spouse until she is eligible for Medicare
coverage.
e. During the Severance Period Executive shall not be entitled to
reimbursement for Fringe benefits such as dues and expenses related to club
memberships, and expenses for professional services.
f. Executive's right to continuation of coverage under the Welfare
Plans providing health and medical insurance coverage, pursuant to Section 4980B
of the Internal Revenue Code of 1986, as amended (or any successor thereto),
shall commence at the end of the Severance Period or, if earlier, the
termination of this Agreement or forfeiture by Executive of his rights
hereunder.
3. Setoff.
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a. The payments or benefits payable to or with respect to
Executive or his spouse pursuant to this Agreement shall be reduced by the
amount of any claim of Employer against Executive or his spouse or any debt or
obligation of Executive or his spouse owing to Employer.
b. No payments or benefits payable to or with respect to Executive
pursuant to this Agreement shall be reduced by any amount Executive or his
spouse may earn or receive from employment with another employer or from any
other source, except as expressly provided in Sections 7 or 10 or elsewhere in
this Agreement.
4. Death. If Executive dies during the Severance Period, all amounts
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payable hereunder to Executive shall cease except as otherwise provided. Any
amounts otherwise payable hereunder after Executive's death shall be paid to his
surviving spouse (or to his estate if his spouse should predecease him).
5. Termination for Good Cause or Executive's Voluntary Action. If the
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employment of Executive with Employer is terminated for Good Cause or by
Executive's Voluntary Action, Executive's base salary (at the rate in effect on
the date of termination) shall be paid through the date of termination, and
Employer shall have no further obligation to Executive or his spouse under this
Agreement, except for benefits accrued under any Retirement Plans pursuant to
subsection 2(b) above.
6. Definitions. For purposes of this Agreement:
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a. "Affiliate" shall have the meaning set forth in the Securities
Exchange Act
of 1934.
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b. "Good Cause" shall mean Executive's gross negligence or gross
neglect or his commission of a felony or gross misdemeanor involving moral
turpitude, fraud, dishonesty or willful violation of any law that results in any
adverse effect on the Employer. In the absence of a demonstration of
arbitrariness, the Employer's determination of what constitutes Good Cause in a
particular circumstance shall be final and binding.
Notwithstanding anything herein to the contrary, in the event Employer
shall terminate the employment of Executive for Good Cause hereunder, Employer
shall give at least thirty (30) days prior written notice to Executive
specifying in detail the reason or reasons for Executive's termination
c. "Retirement Plans" shall mean any qualified or supplemental
defined benefit retirement plan or defined contribution retirement plan,
currently or hereinafter made available by Employer in which Executive is
eligible to participate, including the Pinnacle Financial Corporation Employee
Stock Ownership Plan and the Pinnacle Financial Corporation 401 (k) Plan, or any
private retirement arrangement maintained by Employer solely for Executive.
d. "Severance Period" shall mean the period beginning on the date
of termination of Executive's employment under the circumstances described in
Section 2 and ending on the date the Executive becomes eligible for early
retirement benefits under the federal Social Security program.
e. "Welfare Plan" shall mean any health and dental plan,
disability plan, survivor income plan and life insurance plan or arrangement
currently or hereafter made available by Employer in which Executive is eligible
to participate.
f."Voluntary Action" shall mean Executive's resignation as an
Executive of the Employer or his abandonment of his duties as an Executive of
the Employer, including without limitation his unauthorized absence from work
for a period of three or more days.
g. "Disability" shall mean circumstances that the Employer finds
to constitute the Executive's inability to perform his normal duties with the
Employer as a result of accidental injury or physical or mental illness.
7. Forfeiture. In the event Executive, during the Term, be associated,
directly or indirectly, as Executive, proprietor, stockholder, partner, agent,
representative, officer, or otherwise, with the operation of any business that
is competitive with any business of Employer or its Affiliates within the State
of Georgia, he shall immediately forfeit the right to receive any and all
compensation payable under this Agreement or to enjoy any rights granted
hereunder. Executive's rights under any other agreement, including without
limitation the Retirement Plans, shall not be terminated upon the event of such
forfeiture of rights under this Agreement. Executive's ownership (or that of his
wife and children) of publicly traded securities of any such business, shall not
be considered a violation of this Section. For purposes of the preceding
sentence, Executive shall be considered as the stockholder with respect to any
equity securities owned by his spouse and all relatives and children residing in
Executive's principal residence. Notwithstanding the foregoing, Executive may
participate in the affairs of any governmental, educational or other charitable
institution, may engage in professional speaking and writing activities and may
serve as a member of the board of directors of publicly held
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corporations so long as the Board of Directors of Employer, in good faith, does
not determine that such activities unreasonably interfere with the business of
Employer or diminish Executive's duties and obligations to Employer, and
Executive shall be entitled to retain all fees, royalties and other compensation
derived from such activities in addition to the compensation and other benefits
otherwise payable to him.
8. No Solicitation of Representatives and Executives. Executive agrees
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that he shall not, during the Severance Period, directly or indirectly, in his
individual capacity or otherwise, induce, cause, persuade, or attempt to do any
of the foregoing in order to cause, any representative, agent or Executive of
Employer or any of its Affiliates to terminate such person's employment
relationship with Employer or any of its Affiliates, or to violate the terms of
any agreement between said representative, agent or Executive and Employer or
any of its Affiliates.
9. Confidentiality. Executive acknowledges that preservation of a
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continuing business relationship between Employer or its Affiliates and their
respective customers, representatives, and Executives is of critical important
to the continued business success of Employer and that it is the active policy
of Employer and its Affiliates to guard as confidential the identity of its
customers, trade secrets, pricing policies business affairs, representatives and
Executives. In view of the foregoing, Executive agrees that he shall not during
the Severance Period, without the prior written consent of Employer (which
consent shall not be withheld unreasonably), disclose to any person or entity
any information concerning the business of, or any customer, representative,
agent or Executive of, Employer or its Affiliates which was obtained by
Executive in the course of his employment by Employer. This section shall not be
applicable if and to the extent Executive is required to testify in a
legislative, judicial or regulatory proceeding pursuant to an order of Congress,
any state or local legislature, a judge, or an administrative law judge.
10. Relief. The following shall apply in the event of a breach or
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threatened or intended breach by Executive of the covenants and agreements set
forth in any of Paragraphs 8 or 9 above:
a. Employer shall have no further obligations to Executive or any
other person under this Agreement, and all amounts to which Executive or any
other person would otherwise be entitled under this Agreement shall be forfeited
(except as to benefits under the, Retirement Plans).
b. Employer shall be entitled to injunctions, both preliminary and
permanent, enjoining such breach or threatened or intended breach, and Executive
hereby consents to the issuance thereof forthwith in any court of competent
jurisdiction.
c. The taking of any action by Employer or the forbearance of
Employer to take any action with respect to such breach or intended or
threatened breach, shall not constitute a waiver by Employer of any of its
rights to remedies or relief under this Agreement or under law or equity.
11. Employer Assignment. Employer may not assign this Agreement, except
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that Employer's obligations hereunder shall be binding legal obligations of any
successor to all or substantially all of Employer's business by purchase,
merger, consolidation, or otherwise.
12. Executive Assignment. No interest of Executive or his spouse or any
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other beneficiary under this Agreement, or any right to receive any payment or
distribution hereunder, shall be subject in any manner to
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sale, transfer, assignment, pledge, attachment, garnishment, or other alienation
or encumbrance of any kind, nor may such interest or right to receive a payment
or distribution be taken, voluntarily or involuntarily, for the satisfaction of
the obligations or debts of, or other claims against, Executive or his spouse or
other beneficiary, including claims for alimony, support, separate maintenance,
and claims in bankruptcy proceedings.
13. Benefits Unfunded. All rights of Executive and his spouse or other
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beneficiary under this Agreement shall at all times be entirely unfunded, and no
provision shall at any time be made with respect to segregating any assets of
Employer for payment of any amounts due hereunder. Neither Executive nor his
spouse or other beneficiary shall have any interest in or rights against any
specific assets of Employer, and Executive and his spouse or other beneficiary
shall have only -the rights of a general unsecured creditor of Employer.
14. Waiver. No waiver by any party at any time of any breach by any
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other party of, or compliance with, any condition or provision of this Agreement
to be performed by any other party shall be deemed a waiver of any other
provisions or conditions at the same time or at any prior or subsequent time.
15. Applicable Law. This Agreement shall be construed and interpreted
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pursuant to the laws of Georgia.
16. Entire Agreement. This Agreement contains the entire Agreement
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between Employer and Executive and supersedes any and all previous agreements,
written or oral, among the parties relating to the subject matter hereof. No
amendment or modification of the terms of this Agreement shall be binding upon
the parties hereto unless reduced to writing and signed by Employer and
Executive.
17. No Employment Contract. Nothing contained in this Agreement shall
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be construed to be an employment contract between Executive and Employer.
Executive is employed at will, and Employer may terminate his employment at any
time, with or without cause.
18. Counterparts. This Agreement may be executed in counterparts, each
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of which shall be deemed an original.
19. Severability. In the event any provision of this Agreement is held
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illegal or invalid, the remaining provisions of this Agreement shall not be
affected thereby.
20. Successors. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, representatives and
successors.
21. Notice. Notices required under this Agreement shall be in writing
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and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the others by written notice.
If to Employer: Attention: Chairman of the Board of Directors
Pinnacle Bank, N.A.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
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If to Executive: Xxxxx X. Xxxxxxx
_____________________________________
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22. Board Approval. The rights and obligations of Employer under this
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Agreement are contingent upon the approval or ratification by its Board of
Directors of the execution of this Agreement on its behalf.
IN WITNESS WHEREOF, Executive has hereunto set his hand, and
Employer has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
EXECUTIVE
/s/ Xxxxx X. Xxxxxxx (SEAL)
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Xxxxx X. Xxxxxxx
PINNACLE BANK, N.A.
By: /s/ X. Xxxxxxx XxXxxxxxx
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Title: Chairman
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