EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of the 25/th/ day of April, 2000 by and among
Rockdale National Bancshares, Inc., a Georgia corporation (the "Company"),
Rockdale National Bank, a national bank organized under the laws of the United
States (the "Bank") (the Company and the Bank are collectively referred to
herein as the "Employer"), and Xxxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company is seeking to retain Executive as it's President and
Chief Executive Officer; and
WHEREAS, Executive is willing to continue in the position of President and
Chief Executive Officer in accordance with the terms and conditions hereinafter
set forth;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:
1. Employment. Employer employs Executive and Executive accepts
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employment upon the terms and conditions set forth in this Agreement.
2. Term. The term of employment of Executive under this Agreement shall
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be the period commencing on the date of this Agreement and ending on February
21, 2003. Notwithstanding the foregoing, in the event that the term of this
Agreement expires and Executive and the Employer have not entered into a
successor, amended, or replacement employment agreement, Executive shall be
entitled to receive a cash payment equal to one hundred percent (100%) of
Executive's base salary paid hereunder in the event Executive's employment is
terminated for any reason other than that set forth in Section 11(a) hereunder.
3. Compensation. (A) Salary. For all services rendered by Executive,
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Executive shall be paid a minimum base salary of $115,000 payable in equal semi-
monthly installments during the term of this Agreement. Salary payments shall
be subject to withholding and other applicable taxes. Such base salary shall be
increased in the discretion of the Board of Directors of the Bank. The Board of
Directors in exercising its discretion shall annually consider Executive's
performance in light of the specific goals and objectives for the Bank, which
Executive and the Board of Directors shall mutually agree upon by the end of
December of each calendar for the succeeding calendar year.
(b) Bonus. In January of each year, and in addition to Executive's base
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salary, Executive shall be eligible to receive such performance bonuses as
determined in the discretion of the Board of Directors of the Bank, which
bonuses may be in amounts outlined in Exhibit "A" hereto. The payment of any
bonus pursuant to this Section 3(b) shall be contingent upon the following:
(i) Prior to the granting of any bonus to Executive, the Board of
Directors of the Bank shall consider, and document its findings
in the minutes of the meeting wherein the issue was considered,
Executive's performance in light of the status of the Bank's
internal controls, loan documentation, credit underwriting,
interest rate exposure, asset growth, asset quality, earnings and
such other performance goals and objectives mutually agreed upon
between Executive and such Board of Directors at the end of each
calendar year pursuant to Section 3(a) hereof.
(ii) The overall condition of the Bank must be "satisfactory" in the
opinion of the OCC as set forth in the most current OCC Report
of Supervisory Activity provided to the Board of Directors of
the Bank and the Uniform Financial Institution Rating of the
Bank shall not be less than a "3"; and
(iii) The Bank shall be "adequately capitalized" as defined under the
regulations promulgated by the OCC pursuant to the Federal
Deposit Insurance Corporation Improvement Act of 1991.
4. Title and Duties. Executive shall serve as Director, President and
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Chief Executive Officer of the Bank and the Company for the term of this
Agreement. Executive shall run the day-to-day activities of the Bank and oversee
the Bank, within the framework of the approved annual budget, and with a sound
system of internal controls and in compliance with the policies of the Board of
Directors of the Bank, and all applicable laws and regulations.
5. Extent of Services. Executive shall devote his entire time, attention
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and energies to the business of Employer and shall not during the term of this
Agreement be engaged in any other business activity which requires the attention
or participation of Executive during normal business hours of Employer,
recognition being given to the fact that Executive is expected on occasion to
participate in client development after normal business hours. However,
Executive may invest his assets in such form or manner as will not require his
services in the operation of the affairs of the companies in which such
investments are made. Executive shall notify Employer of any significant
participation by him in any trade association or similar organization.
6. Working Facilities. Executive shall have such assistant, perquisites,
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facilities and services as are suitable to his position and appropriate for the
performance of his duties, including membership in one country or golf club and
appropriate civic clubs (including dues, assessments and initiation fees).
7. Expenses. Executive may incur reasonable expenses for promoting the
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business of the Bank, including expenses for entertainment, travel, and similar
items. Executive will be reimbursed for all such expenses upon Executive's
periodic presentation of an itemized account of such expenditures.
8. Vacations. Executive shall be entitled each year to a vacation in
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accordance with the personnel policy established by the Bank's Board of
Directors, which vacation shall be not less than fifteen (15) days, during which
time Executive's compensation shall be paid in full.
9. Additional Compensation. As additional consideration paid to
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Executive, Executive shall be provided with health, hospitalization, disability
and term life insurance, and participation in the Bank's incentive compensation
plan. In addition, Executive shall be paid $700 per month as an automobile
allowance. All stock options shall be exercisable for a period of ten (10)
years from the date of grant.
10. Change in Control of the Company. (a) In the event of a "change in
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control" of the Company as defined herein, Executive shall be entitled, for a
period of thirty (30) days from the date of closing of the transaction effecting
such change in control and at his election, to give written notice to Employer
of termination of this Agreement and to receive a cash payment equal to three
hundred percent (300%) times the compensation, including bonus, if any, received
by Executive in the one-year period immediately preceding the change in control
of the Company, whichever is later. (b) For purposes of this Section 10,
"change in control" of the Company shall mean:
(i) any transaction, whether by merger, consolidation, asset sale,
tender offer, reverse stock split, or otherwise, which results in
the acquisition or beneficial ownership (such as term is defined
under rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended) by any person or entity
or any group of persons or entities acting in concert, of 50%
or more of the outstanding shares of Common Stock of the
Company;
(ii) the sale of all or substantially all of the assets of the
Company; or
(iii) the liquidation of the Company.
11. Termination. (a) For Cause. This Agreement may be terminated by
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the Board of Directors of the Bank without notice and without further obligation
than for monies already paid, for any of the following reasons:
(i) receipt by the Bank of written notice from the OCC that the OCC
has criticized Executive's performance or his area of
responsibility, and has either (a) rated the Bank a "4" or a
"5" under the Uniform Financial Rating System or (b) has
determined that the Bank is in a "troubled condition" as
defined under Section 914 of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989;
(ii) failure of Executive to follow reasonable written instructions
or policies of the Board of Directors of the Bank;
(iii) gross negligence or willful misconduct of Executive materially
damaging to the business of the Bank during the term of this
Agreement, or at any time while he was employed by the Bank
prior to the term of this Agreement, if not disclosed to the
Bank prior to the commencement of the term of this Agreement;
or
(iv) conviction of Executive during the term of this Agreement of a
crime involving breach of trust or moral turpitude.
In the event that the Bank discharges Executive alleging "cause" under this
Section 11(a) and it is subsequently determined judicially that the termination
was "without cause," then such discharge shall be deemed a discharge without
cause subject to the provisions of Section 11(b) hereof. In the event that the
Bank discharges Executive alleging "cause" under this Section 11(a), such notice
of discharge shall be accompanied by a written and specific description of the
circumstances alleging such "cause." The termination of Executive for "cause"
shall not entitle the Bank to enforcement of the non-competition and non-
solicitation covenants contained in Section 13 hereof.
(b) Without Cause.
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(i) The Bank may, upon thirty (30) days' written notice to
Executive, terminate this Agreement without cause any time
during the term of this Agreement upon the condition that
Executive shall be entitled, as liquidated damages in lieu of
all other claims, to the payment of his base salary for a
period of twelve (12) months and reimbursement for up to
$12,000 in fees incurred in connection with outplacement
counseling or services. The severance payments provided for in
this Section 11(b) shall commence not later than thirty (30)
days after the actual date of termination of employment of
Executive. The termination of Executive "without cause" shall
not entitle the Bank to enforcement of the non-competition and
non-solicitation covenants contained in Section 13 hereof.
(ii) Executive may upon thirty (30) days' written notice to Employer
terminate this Agreement without cause at any time during the
term of this Agreement. In the event of termination of this
Agreement by Executive, the Bank shall have no further
obligation to Executive than for monies paid and the Bank shall
be
entitled to enforcement of the non-competition and non-
solicitation covenants contained in Section 13 hereof.
(iii) In the event this Agreement is terminated without cause,
whether by Executive or by the Bank, any stock options or
unexercised portion thereof, granted pursuant to this
Agreement, whether or not vested on the date of termination,
may be exercised by Executive within thirty (30) days from the
date of the termination at which time all such options shall
expire.
12. Death or Disability. In the event of Executive's death, Employer
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shall pay to Executive's designated beneficiary, or if Executive has failed to
designate a beneficiary, to his estate, an amount equal to Executive's base
salary pursuant to Section 3 hereof through the end of the month in which
Executive's death occurred. Such compensation shall be in lieu of any other
benefits provided hereunder, except that (i) in the event of change in control
of the Company as defined herein, Executive's designated beneficiary or his
estate, as the case may be, shall be entitled to the benefits of Section 10(b)
hereof, and (ii) any benefit payable pursuant to Section 3 shall be prorated and
made available to Executive in respect of any period prior to his death. The
Bank may maintain insurance on its behalf to satisfy in whole or in part the
obligations of this Section 12.
In the event of Executive's disability, as hereinafter defined, Employer
shall pay to Executive the base salary then in effect through the end of the
month in which Executive became disabled. Executive shall be deemed disabled
if, by reason of physical or mental impairment, he is incapable of performing
his duties hereunder for a period of sixty (60) consecutive days. Any dispute
regarding the existence, the extent, or the continuance of Executive's
disability shall be resolved by the determination of a duly licensed and
practicing physician selected by and mutually agreeable to both the Board of
Directors of the Bank and Executive; provided, however, if Executive officially
establishes his eligibility to receive social security disability benefits or is
deemed disabled under the terms and conditions of any disability insurance
policy carried on Executive by the Company or the Bank, he shall be deemed to be
disabled as provided herein without further proof. Executive shall make himself
available for and submit to such examinations by said physician as may be
directed from time to time by the physician. Failure to submit to any such
examination shall constitute a material breach of this Agreement.
13. Non-Competition and Non-Solicitation. (a) Executive acknowledges that
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he has performed services or will perform services hereunder, which directly
affect Employer's business. Accordingly, the parties deem it necessary to enter
into the protective agreement set forth below, the terms and condition of which
have been negotiated by and between the parties hereto.
(b) In the event of termination of employment under this Agreement by
action of Executive pursuant to 10(b) (ii) prior to the expiration of the term
of this Agreement, Executive agrees with Employer that through the actual date
of termination of the Agreement, and for a period of twelve (12) months after
such termination date, Executive shall not, without the prior written consent of
Employer, within the Primary Service Area of the Bank as set forth in the
charter Application filed by the Bank with the OCC, either directly or
indirectly, serve as an executive officer of any bank, bank holding company or
other financial institution.
(c) The covenants of Executive set forth in this Section 13 are separate
and independent covenants for which valuable consideration has been paid, the
receipt, adequacy and sufficiency of which are acknowledged by Executive, and
have also been made by Executive to induce Employer to enter into this
Agreement. In the event that a court of competent jurisdiction finds that
Executive has violated the provisions of this Section 13, then, as partial
relief to Employer, all unexercised options granted to Executive pursuant to
Section 9 hereof shall immediately become null and void. Further, each of the
aforesaid covenants may be availed of or relied upon by Employer in any court of
competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including but not limited to
reasonable attorney's fees) suffered by Employer arising out of any breach of
the aforesaid covenants by Executive. The covenants of Executive set forth in
this Section 13 are cumulative to each
other and to all other covenants of Executive in favor of Employer contained in
this Agreement and shall survive the termination of this Agreement of the
purposes intended. Should any covenant, term, or condition contained in this
Section 13 become or be declared invalid or unenforceable by a court of
competent jurisdiction, then the parties may request that such court judicially
modify such unenforceable provision consistent with the intent of this Section
13 so that it shall be enforceable as modified, and in any event the invalidity
of any provision of this Section 13 shall not affect the validity of any other
provision in this Section 13 or elsewhere in this Agreement.
14. Notices. Any notice required or desired to be given under this
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Agreement shall be deemed given if in writing sent by certified mail to his
residence in the case of Executive, or to its principal office in the case of
Employer.
15. Waiver of Breach. The waiver by Employer of a breach of any provision
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of this Agreement by Executive shall not operate or be construed as a waiver of
any subsequent breach by Executive. No waiver shall be valid unless in writing
and signed by an authorized officer of Employer.
16. Assignment. Executive acknowledges that the services to be rendered
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by him are unique and personal. Accordingly, Executive may not assign any of
his rights or delegate any of his duties or obligations under this Agreement.
The rights and obligations of Executive under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of Employer.
17. Governing Law. This Agreement shall be governed and construed in
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accordance with the State of Georgia.
18. Entire Agreement. This Agreement contains the entire understanding of
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the parties hereto regarding employment of Executive, and supersedes and
replaces any prior agreement relating hereto. It may not be changed orally but
only by an agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"Bank"
ROCKDALE NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Chairman
"Company"
ROCKDALE NATIONAL BANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice Chairman
"Executive"
/s/ Xxxxxxx X. Xxxxxx (L.S.)
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Xxxxxxx X. Xxxxxx
EXHIBIT "A"
Base Salary
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1. Annual cost of living increase in base salary in an amount at least equal
to the increase in CPI.
Incentive Compensation
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1. To be eligible, performance must meet the criteria as specified in the
employment contract of the CEO.
2. Based on return on average stockholder equity.
3. For purposes of the incentive calculation, net income will be adjusted by
60% of the amount, if any, required to reflect a loan loss reserve
consistently calculated at the beginning and end of the year. (Loan loss
reserve of 1.30% of outstanding loans plus specifically reserved loans.)
4. Incentive determined as follows:
a. For each one percent return on average stockholders equity greater
than 10% the incentive will be 00.15% of average stockholders equity.
b. For each one percent return on average stockholders equity greater
than 15% the incentive will be an addition 00.15% of average
stockholders equity.
Example of incentive calculation assuming $5,000,000 average stockholders
equity and a return of 17%
5,000,000 X 7 X 00.15% = $ 52,500
5,000,000 X 2 X 00.15% = $ 15,000
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Total Incentive $67,500
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