1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 20th day of February, 1996, between
First Xxxxxxx Bank & Trust Company (the "Bank"), a commercial bank and trust
company chartered by the State of Georgia, and First Banking Company of
Southeast Georgia (the "Company"), the parent bank holding company of the Bank
(collectively, the "Employer"), and Xxxxx Xxx Xxxxxx, a resident of the state
of Georgia (the "Employee").
RECITALS:
The Employer desires to employ the Employee as the President of the
Employer and the Employee desires to accept such employment.
In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following terms and
their variant forms shall have the meaning set forth below:
1.1 "Agreement" shall mean this Agreement and any Exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.
1.2 "Affiliate" shall mean any business entity which controls the
Employer, is controlled by, or is under common control with the Employer.
1.3 "Area" shall mean the geographic area within the boundaries of Xxxxxxx
and Xxxxxxx County. It is the express intent of the parties that the Area as
defined herein is the area where the Employee performs or performed services on
behalf of the Employer under this Agreement as of, or within a reasonable time
prior to, the termination of the Employee's employment hereunder.
1.4 "Business of the Employer" shall mean the business conducted by the
Employer, which is commercial banking.
1.5 "Cause" shall mean:
1.5.1 With respect to termination by the Employer:
(a) A material breach of the terms of this Agreement by the
Employee, including, without limitation, failure by the Employee to perform his
duties and responsibilities in the manner and to the extent required under this
Agreement, or a breach of any representation or warranty of the Employee set
forth herein;
(b) Conduct by the Employee that amounts to fraud, dishonesty or
wilful misconduct in the performance of his duties and responsibilities
hereunder;
(c) The conviction of the Employee of a felony;
(d) Conduct by the Employee that amounts to gross and
willful insubordination or inattention to his duties and responsibilities
hereunder; or
(e) Conduct by the Employee that results in removal from his
position as an officer or employee of the Employer pursuant to a written order
by any regulatory agency with authority or jurisdiction over the Employer.
2
1.5.2 With respect to termination by the Employee, a material
diminution in the powers, responsibilities or duties of Employee hereunder, or
the failure of the Board of Directors of the Bank and the Company to elect him
as President, or a material breach of the terms of this Agreement by the
Employer which remains uncured after the expiration of thirty (30) days
following the delivery of written notice of such breach to the Employer by the
Employee.
1.6 "Change in Control" of the Employer shall mean any transaction wherein
fifty percent (50%) of the shares of the Bank or the Company, plus one share
are directly or indirectly transferred by sale, gift, merger, exchange or any
other means to new owners other than an Affiliate of such person or entity
transferring such shares or if a majority of the members of the Board of
Directors of the Bank or the Company are replaced.
1.7 "Initial Term" shall mean that period of time commencing on the date
of execution of this Agreement by the Employer and the Employee and running
until the earlier of three (3) years thereafter or any termination of
employment of the Employee under this Agreement as provided for in Section 3.
1.8 "Permanent Disability" shall mean the total inability of the Employee
to perform his duties under this Agreement for a period of ninety (90)
consecutive days as certified by a physician chosen by the Employer and
reasonably acceptable to the Employee. If Employee is covered by a disability
insurance policy, the term "permanent disability" shall have the meaning set
forth in such policy.
1.9 "Proprietary Information" shall mean:
(a) Information related to the Employer or any Affiliate,
(i) Which derives economic value, actual or potential, from
not being generally known to or readily ascertainable by
other persons who can obtain economic value from its
disclosure or use; and
(ii) Which is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy; and
(b) All tangible reproductions or embodiments of such
information.
Assuming the criteria in (a)(i) and (a)(ii) above are satisfied, Proprietary
Information includes, but is not limited to, technical and nontechnical data
related to the compilations, programs, methods, techniques, finances, actual or
potential customers and suppliers, existing and future products, and employees
of the Employer or its Affiliates. Proprietary Information also includes
information which has been disclosed to the Employer or its Affiliates by a
third party and which the Employer or any Affiliate is obligated to treat as
confidential.
1.10 "Term" shall mean the Initial Term and all subsequent renewal periods.
2. DUTIES.
2.1 The Employee is employed initially as the Chief Executive Officer of
the Employer and, subject to the direction of the Board, or its designee, shall
perform and discharge well and faithfully the duties which may be assigned to
him from time to time by the Employer in connection with the conduct of its
business. The duties and responsibilities of the Employee are set forth on
Exhibit A attached hereto.
-30-
3
2.2 In addition to the duties and responsibilities specifically assigned
to the Employee pursuant to Section 2.1 hereof, the Employee shall: (1) devote
substantially all of his time, energy and skill during regular business hours
to the performance of the duties of his employment (reasonable vacations and
reasonable absences due to illness excepted), and faithfully and industriously
perform such duties; (2) diligently follow and implement all management
policies and decisions communicated to him by the Board; and (3) timely prepare
and forward to the Board all reports and accounting as may be requested of the
Employee.
2.3 The Employee shall devote his entire business time, attention and
energies to the Business of the Employer and shall not during the term of this
Agreement be engaged (whether or not during normal business hours) in any other
business or professional activity, whether or not such activity is pursued for
gain, profit or other pecuniary advantage; but this shall not be construed as
preventing the Employee from (1) investing his personal assets in businesses
which (subject to item (2) below) are not in competition with the Business of
the Employer and which will not require any services on the part of the
Employee in their operation or affairs and in which his participation is solely
that of an investor, (2) purchasing securities in any corporation whose
securities are regularly traded provided that such purchase shall not result in
his collectively owning beneficially at any time five percent (5%) or more of
the equity securities of any business in competition with the Business of the
Employer, and (3) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books or
teaching so long as the Board approves of such activities prior to the
Employee's engaging in them. Prior to commencing any activity described in
clause (3) above, the Employee shall inform the Board, in writing, of any such
activity.
3. TERM AND TERMINATION.
3.1 Term. This Agreement shall remain in effect for the Initial Term.
At the end of the first twelve-month period hereunder and at the end of each
successive twelve-month period, this Agreement shall automatically be extended
for a successive 12-month period following the then two-year remaining term
unless either party gives written notice to the other of its intent not to
extend this Agreement with such written notice to be given not less than 90
days prior to the end of such twelve-month period. In the event such notice of
non-extension is properly given, this Agreement shall terminate at the end of
the remaining term then in effect. However, notwithstanding the provisions of
this Section 3.1, (i) no extension shall be granted that would extend the term
of this Agreement beyond the last day of the month during which the Employee
attains age 65, and (ii) this Agreement shall terminate upon the death or
permanent disability of Employee.
3.2 Termination. During the Term, the employment of the Employee under
this Agreement may be terminated only as follows:
3.2.1 By the Employer:
(a) For Cause, upon written notice to the Employee; or
(b) Without Cause at any time, provided that the
Employer shall give the Employee thirty (30) days prior written
notice of its intent to terminate.
-31-
4
3.2.2 By the Employee:
(a) For Cause, with no prior notice except as provided in
Section 1.5.
(b) Without Cause, provided that the Employee shall give
the Company sixty (60) days prior written notice of his intent to
terminate.
3.2.3 By the Employee within six months following a Change in
Control of the Employer, provided that the Employee shall give
written notice to the Employer of his intention to terminate this
Agreement.
3.2.4 At any time upon mutual, written agreement of the parties.
3.3 Effect of Termination. The effect of termination of the
employment of the Employee pursuant to Section 3.2 shall be as follows:
3.3.1 In the event of termination by the Employer:
(a) For Cause, pursuant to Section 3.2.1(a), the
Employer shall have no further obligation to the Employee except for
the payment of any amounts due and owing under Section 4 on the
effective date of termination;
(b) Without Cause, pursuant to Section 3.2.1(b), the
Employer shall be required to continue to meet its obligations to
the Employee under Section 4.1 for a period of twenty-four (24)
months following termination.
3.3.2 In the event of termination by the Employee:
(a) For Cause, pursuant to Section 3.2.2(a), the
Employer shall be required to continue to meet its obligations to
the Employee under Section 4.1 for a period of twenty-four (24)
months following termination.
(b) Without Cause, pursuant to Section 3.2.2(b), the
Employer shall have no further obligation to the Employee except
future payment of any amounts due and owing under Section 4 on the
effective date of the termination.
3.3.3 In the event of termination by the Employee in connection
with a Change in Control pursuant to Section 3.2.3, the Employer
shall be required to pay to continue to meet its obligations to
Employee under Section 4.1 for a period of twenty-four (24) months
after termination.
3.3.4 In the event of termination upon mutual agreement of the
parties pursuant to Section 3.2.4, the Employer shall have no
further obligation to the Employee except for the payment of any
amounts due and owing under Section 4.1 on the effective date of
termination unless otherwise set forth in the written agreement.
4. COMPENSATION. The Employee shall receive the following salary and
benefits:
- 32 -
5
4.1 Base Salary. During the Initial Term, the Employee shall be
compensated at a base rate of $174,000. per annum (the "Base Salary"). The
Employee's salary shall be reviewed by the Board annually, and the Employee
shall be entitled to receive annually an increase in such amount, if any, as
may be determined by the Board. Such salary shall be payable in accordance
with the Employer's normal payroll practices.
4.2 Incentive Compensation. The Employee shall be entitled to
participate in such option, bonus, incentive and other executive compensation
programs as are made available to senior management of the Employer from time
to time
4.3 Benefits.
(a) In addition to the Base Salary and Incentive Compensation,
the Employee shall be entitled to such benefits as may be
available from time to time for executives of the Employer
similarly situated to the Employee. All such benefits shall be
awarded and administered in accordance with the Employer's
standard policies and practices. Such benefits may include, by
way of example only, profit sharing plans, retirement or
investment funds, dental, health, life and disability insurance
benefits, and such other benefits as the Employer deems
appropriate.
(b) The Employer specifically agrees to reimburse the Employee
for reasonable business expenses incurred by him in performance
of his duties hereunder, as approved from time to time by the
Board; provided that the Employee shall, as a condition of
reimbursement, submit verification of the nature and amount of
such expenses in accordance with reimbursement policies from
time to time adopted by the Employer and in sufficient detail
to comply with Internal Revenue Service Regulations.
(c) On a non-cumulative basis the Employee shall be entitled to
four (4) weeks of vacation in each year of this Agreement,
during which his compensation shall be paid in full. At least
two consecutive weeks each year must be taken by the Employee
for vacation, with other vacation to be taken at the time the
Employer determines appropriate, taking into account the
requirements of the Employer.
4.4 Withholding. The Employer may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.
5. PROPRIETARY INFORMATION.
5.1 Ownership of Proprietary Information. All Proprietary Information
received or developed by the Employee while employed by the Employer will
remain the sole and exclusive property of the Employer.
5.2 Obligations of Employee. Employee will hold the Proprietary
Information in trust and strictest confidence, and will not use, reproduce,
distribute, disclose or otherwise disseminate the Proprietary Information
except to the extent necessary to perform the duties assigned to him by the
Employer.
-33-
6
5.3 Delivery upon Termination. Upon termination of his employment with
the Employer, the Employee will promptly deliver to the Employer all property
belonging to the Employer, including without limitation all Proprietary
Information then in his possession or control.
6. NON-COMPETITION. The Employee agrees that during his employment by the
Employer hereunder and, in the event of his termination other than pursuant to
Sections 3.2.1(b) or 3.2.2(a), for a period of six (6) months thereafter, he
will not (except on behalf of or with the prior written consent of the
Employer), within the Area, either directly or indirectly, on his own behalf or
in the service or on behalf of others, as a principal, partner, officer,
director, manager, supervisor, administrator, consultant, executive employee,
or in any other capacity which involves duties and responsibilities similar to
those undertaken for the Employer, engage in any business which is the same as
or essentially the same as the Business of the Employer.
7. NON-SOLICITATION OF CLIENTS. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination other
than pursuant to Sections 3.2.1(b) or 3.2.2(a), for a period of six (6) months
thereafter, he will not (except on behalf of or with the prior written consent
of the Employer), within the Area, on his own behalf or in the service or on
behalf of others, solicit, divert or appropriate, or attempt to solicit, divert
or appropriate, directly or by assisting others, any business from any of the
Employer's customers, including actively sought prospective customers, with
whom the Employee has or had material contact during the last two (2) years of
his employment, for purposes of providing products or services that are
competitive with those provided by the Employer.
8. NON-SOLICITATION OF EMPLOYEES. The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination other
than pursuant to Sections 3.2.1(b) or 3.2.2(a), for a period of six (6) months
thereafter, he will not, on his own behalf or in the service or on behalf of
others, solicit, recruit or hire away, or attempt to solicit, recruit or hire
away, directly or by assisting others, any employee of the Employer or its
Affiliates, whether or not such employee is a full-time employee or a temporary
employee of the Employer, and whether or not such employment is pursuant to
written agreement and whether or not such employment is for a determined period
or is at will.
9. REMEDIES. The Employee agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests
and properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.
10. SEVERABILITY. The parties agree that each of the provisions included in
this Agreement is separate, distinct, and severable from the other provisions
of this Agreement, and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any other
provision of this Agreement. Further, if any provision of this Agreement is
ruled invalid or
-34-
7
unenforceable by a court of competent jurisdiction because of a conflict
between the provision and any applicable law or public policy, the provision
shall be redrawn to make the provision consistent with and valid and
enforceable under the law or public policy.
11. NO SET-OFF BY EMPLOYEE. The existence of any claim, demand, action or
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.
12. NOTICE. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail
or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or three (3) business
days after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand, facsimile transmission or overnight courier, in which event
the notice shall be deemed effective when delivered or transmitted. All
notices and other communications under this Agreement shall be given to the
parties hereto at the following addresses:
(i) If to the Employer, to it at:
First Banking Company of Southeast Georgia
00 Xxxxx Xxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Chairman, Compensation Committee
(ii) If to the Employee, to him at:
Xxxxx Xxx Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
13. ASSIGNMENT. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto.
14. WAIVER. A waiver by the Employer of any breach of this Agreement by the
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.
15. ATTORNEYS' FEES. In the event of litigation between the parties concerning
this Agreement, the party prevailing in such litigation shall be entitled to
receive from the other party all reasonable costs and expenses, including
without limitation attorneys' fees, incurred by the prevailing party in
connection with such litigation, and the other party shall pay such costs and
expenses to the prevailing party promptly upon demand by the prevailing party.
16. APPLICABLE LAW. This Agreement shall be construed and enforced under and
in accordance with the laws of the state of Georgia.
17. ENTIRE AGREEMENT. This Agreement embodies the entire and final agreement
of the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the
-35-
8
Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.
18. RIGHTS OF THIRD PARTIES. Nothing herein expressed is intended to or shall
be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.
19. SURVIVAL. The obligations of the Employee pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Employee
hereunder.
20. JOINT AND SEVERAL. The obligation of the Bank and the Company to Employee
hereunder shall be joint and several.
IN WITNESS WHEREOF, the Employer and the Employee have executed and
delivered this Agreement as of the date first shown above.
THE EMPLOYER:
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
By: /s/ C. Xxxxxx Xxxxxx
----------------------------------------------
Name: C. Xxxxxx Xxxxxx
----------------------------------------------
Title: Director & Chairman of Compensation Committee
----------------------------------------------
FIRST XXXXXXX BANK & TRUST COMPANY
By: /s/ C. Xxxxxx Xxxxxx
----------------------------------------------
Name: C. Xxxxxx Xxxxxx
----------------------------------------------
Title: Director
----------------------------------------------
THE EMPLOYEE:
/s/ Xxxxx Xxx Xxxxxx
--------------------------------------------------------
XXXXX XXX XXXXXX
-36-
9
Exhibit A
Initial Duties of the Employee
The initial duties of the Employee shall include, in addition to any other
duties assigned the Employee by the Board of Directors of the Employer or its
designee, the following:
- Xxxxxx a corporate culture that promotes ethical practices, encourages
individual integrity, fulfills social responsibility, and is conducive to
attracting, retaining and motivating a diverse group of top-quality
employees at all levels.
- Work with the Board of Directors to develop a long-term strategy for the
company that creates shareholder value.
- Develop and recommend to the Board annual business plans and budgets that
support the company's long-term strategy.
- Manage the day-to-day business affairs of the company appropriately.
- Use best efforts to achieve the company's financial and operating goals
and objectives.
- Improve the quality and value of the products and services provided by the
company.
- Insure that the company maintains a satisfactory competitive position
within its industry.
- Develop an effective management team and an active plan for its
development and succession, and make recommendations to the Board
regarding hiring, firing and compensation.
- Implement major corporate policies.
-37-
