EMPLOYMENT AGREEMENT
Exhibit
10.8
THIS EMPLOYMENT AGREEMENT
(the “Agreement”), is entered into as of the 21st day
of July, 2010, by and between HERITAGEBANK OF THE SOUTH (the “Bank”) and O.
XXXXXXXX XXXXX (“Employee”).
WHEREAS, the Employee is
presently serving as “Chief Credit Officer and Executive Vice President” of the
Bank;
WHEREAS, the Bank desires
to continue to employ Employee as its Chief Credit Officer and Executive Vice
President;
WHEREAS, the Bank and the
Employee believe it to be in their mutual best interest to enter into this
Agreement in order to insure continuity of Employee’s employment with the Bank
and to reinforce and encourage the continued attention and dedication of the
Employee to Employee’s assigned duties;
WHEREAS, the Bank desires
to provide fair and reasonable benefits to Employee for the services provided to
the Bank on the terms and conditions set forth in this
Agreement;
WHEREAS, the Bank desires
reasonable protection of its confidential business and customer information
which has been developed over the years at substantial expense and to assure
that the Employee will not compete with the Bank for a reasonable period of time
after termination of employment with it, except as otherwise provided herein;
and
WHEREAS, this Agreement
shall be deemed to replace and supersede any existing employment agreement
between the Employee and the Bank.
NOW THEREFORE, in
consideration of these premises, as well as the mutual covenants and
undertakings herein contained, the Bank and the Employee, each intending to be
legally bound, do hereby covenant and agree as follows:
1.
Employment
Upon the terms and subject
to the conditions set forth in this Agreement, the Bank employs Employee as its
Chief Credit Officer and Executive Vice President and Employee hereby accepts
such employment.
2.
Position
and Duties
Employee agrees to serve
as Chief Credit Officer and Executive Vice President and to perform such duties
in that office as may be reasonably assigned to Employee by the Chief Executive
Officer of the Bank. All such duties shall be performed in or from the offices
of the Bank, and shall be of the same character as those generally associated
with the position presently held by Employee. During the term of this
Agreement, Employee agrees that Employee will serve the Bank faithfully and to
the best of Employee’s ability and that Employee will devote Employee’s full
business time, attention and skills to its business; provided however, that the
foregoing shall not be deemed to restrict Employee from devoting a reasonable
amount of time and attention to the management of Employee’s personal affairs
and investments, so long as such activities do not interfere with the
responsible performance of Employee’s duties hereunder.
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3.
Term
The term of this Agreement
shall be for a period of two (2) years, commencing on July 21, 2010 (the
“Effective Date”) and subject to earlier termination as provided herein (the
“Term”). Beginning on the first anniversary of the Effective Date and
on each anniversary thereafter, the Term of this Agreement shall be extended for
an additional period of one (1) year provided that (1) the Bank has not given
notice to the Employee at least thirty (30) days prior to such anniversary that
the Term of the Agreement shall not be so extended; and (2) prior to such
anniversary, the Chief Executive Officer of the Bank has explicitly reviewed and
approved such extension in writing. Reference herein to the Term of
this Agreement shall refer to the initial term as well as any such extended
terms.
4.
Compensation
(a) Salary. Employee
shall receive an annual salary of ONE HUNDRED THIRTY-NINE THOUSAND SEVENTY-FOUR
and NO/100 DOLLARS ($139,074.00) (“Base Compensation”) per year, payable in such
increments as shall be specified by the Bank. The amount of the
Employee’s salary shall be reviewed by the Chief Executive Officer and the Board
of Directors of the Bank (the “Bank Board”) annually during the Term of this
Agreement.
(b) Discretionary
Bonuses. The Employee shall be entitled to participate, in an
equitable manner, as determined by the Chief Executive Officer and/or the Bank
Board, in the Bank’s Performance Incentive Plan as authorized and declared, from
time to time, by the Chief Executive Officer and the Bank
Board.
(c) Car
Allowance. The Employee shall be paid the sum of $1,100.00 per
month as a car allowance, such car allowance payment to be subject to applicable
withholdings. Employee may determine, in Employee’s discretion,
whether to expend such car allowance for purposes of the purchase and
maintenance of an automobile to be utilized in connection with Employee’s
employment hereunder or for other purposes. In any event, the
Employee shall be required to provide a suitable vehicle which shall be
available at all times during the Term of this Agreement to be utilized in
connection with Employee’s employment duties. In addition, the
Employee shall have the right to utilize the credit card provided to the
Employee by the Bank for payment of charges for fuel utilized for both business
and personal travel.
(d) Expenses. Employee
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to other
similarly-situated employees of the Bank, provided that the Employee accounts
for such expenses as required under such policies and
procedures. Requests for reimbursement of expenses shall be submitted
no more than thirty (30) days after such expenses are
incurred.
5.
Benefits
(a) Employee
Benefit Plans. The Employee shall be entitled to participate
in all applicable plans relating to pension, thrift, profit sharing, group life
insurance, medical and dental coverage, the Bank’s Performance Incentive Plan,
and other retirement or employee benefits or combinations thereof as established
by the Bank from time to time.
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(b) Country
Club or Other Dues. The Bank shall pay all regularly-assessed
monthly dues required to maintain a golfing membership at a country club to be
selected by Employee, subject to approval by the Bank; provided, however, that
the Employee shall be responsible for the payment of all food minimums and other
charges made upon Employee’s account at said country club, other than those
related to business development activities undertaken for the benefit of the
Bank which are documented in accordance with the Bank’s policy regarding such
expenses.
(c) PDA
and laptop computer. The Bank shall provide Employee with use
of a PDA and a laptop computer to assist in performance of Employee’s duties
hereunder.
6.
Vacation
Employee shall be entitled
to annual paid vacation of four (4) weeks per year in accordance with the
policies established, from time to time, by the Bank.
7.
Termination
of Employment
(a) Termination
for Cause. Employee’s employment with the Bank may be
terminated for cause by the Bank. In the event of a Termination for
Cause, the Employee shall not be entitled to any severance compensation or
benefits whatsoever, other than any compensation accrued through the Date of
Termination. For purposes of this Agreement, the phrase “Termination
for Cause” shall mean termination of the employment of the Employee because of
the Employee’s personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty, failure to perform assigned duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
material breach of any provision of this Agreement. The term “Date of
Termination” shall, for purposes of this Agreement, mean the earlier of (1) the
date upon which the Bank gives notice to the Employee of the termination of
Employee’s employment with the Bank; or (2) the date upon which the Employee
ceases to serve as Employee of the Bank.
(b) Voluntary
Termination. Employee’s employment may be voluntarily
terminated by the Employee without good reason at any time upon one hundred
twenty (120) days’ written notice to the Bank, or such shorter period as may be
agreed upon between the Employee and the Chief Executive Officer of the
Bank. In the event of such voluntary termination, the Bank shall be
obligated to continue to pay to the Employee the Employee’s salary and accrued
benefits through the Date of Termination, at the time such payments are due, and
the Bank shall thereafter have no further obligation to the Employee under this
Agreement.
(c) Termination
by Employee for Good Reason. Employee, by written notice to
the Chief Executive Officer of the Bank, may terminate Employee’s employment
with the Bank immediately for “good reason.” For purposes of this
Agreement, “good reason” shall mean a good faith determination by Employee, in
Employee’s reasonable judgment, that any one or more of the following events has
occurred, without Employee’s prior written consent, within twenty-four (24)
months of a Change of Control:
(1) the
Bank reduces the Employee’s salary, benefits, and/or the average annual
discretionary bonus received by Employee during the term of Employee’s
employment with the Bank, other than as part of an undertaking whereby the
salary, benefits, and/or annual discretionary bonus of other similarly-situated
employees of the Bank is reduced by an equivalent amount;
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(2) the
Bank requires Employee to be based anywhere other than a job location within the
boundaries of Xxxxxxxxx and Xxx Counties, Georgia; or
(3) the
Bank takes any action that would materially adversely affect the physical
conditions existing at the time of the Change of Control in or under which
Employee performs Employee’s employment duties, provided that the Bank may take
action with respect to such conditions after a Change of Control, so long as
such conditions are at least commensurate with the conditions in or under which
Employee has customarily performed Employee’s employment
duties;
(4) for
purposes of this Agreement, a “Change of Control” shall mean any of the
following events:
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(a)
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the
merger or consolidation of the Bank with, or a sale of all or
substantially all of the assets of the Bank to, any person or entity or
group of associated persons or
entities;
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(b)
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the
direct or indirect beneficial ownership, in the aggregate, of securities
of the Bank, or its parent company, representing twenty-five percent (25%)
or more of the total combined voting power of the Bank’s, or its parent
company’s, then issued and outstanding securities by any person or entity,
or group of associated persons or entities acting in concert, not
affiliated with the Bank or its parent company as of the Effective Date
hereof; provided, however, that none of the securities of the Bank or its
parent company which are now or hereafter offered for sale as part of a
public offering shall be taken into consideration for purposes of
determining the occurrence of a Change of Control and further provided
that acquisition of the Bank by a newly-created parent or holding company
as a part of a transaction whereby the stock of the parent company becomes
fully publicly-traded shall not constitute a Change of Control;
or
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(c)
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the
shareholders of the Bank approve any plan or proposal for the liquidation
or dissolution of the Bank;
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provided,
however, that a Change of Control shall be deemed to result from any
transaction precipitated by the Bank’s insolvency, appointment of a
conservator, or determination by a regulatory agency that the Bank is
insolvent, nor from any transaction initiated by the Bank or its parent
company, in regard to converting from a publicly-traded company to a
privately-held company.
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In the event of
termination by the Employee of Employee’s employment with the Bank for “good
reason,” the Bank shall be obligated to continue to pay to the Employee the
Employee’s annual salary and benefits, as the same may have been modified from
time to time since the Effective Date, for a period of two (2) years after the
Date of Termination and, at the end of each calendar year during that two year
period, the Bank shall also pay to such Employee an amount equal to the average
annual discretionary bonus, as a percentage of total annual compensation, which
Employee received (if any) during the last three (3) calendar years of
Employee’s employment with the Bank.
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(d) Termination
By Bank Without Cause. The Bank may, upon one hundred twenty
(120) days written notice to Employee, terminate Employee’s employment hereunder
without cause. In the event that the Bank terminates the Employee’s
employment hereunder without cause, the Bank shall be obligated to continue to
pay to the Employee the Employee’s annual salary and benefits, as the same may
have been modified from time to time since the Effective Date, for a period of
two (2) years after the Date of Termination, and, at the end of each calendar
year during that two year period, the Bank shall also pay to Employee an amount
equal to the average annual discretionary bonus, as a percentage of total annual
compensation, which Employee received (if any) during the last three (3)
calendar years of Employee’s employment with the Bank.
(e) Death;
Disability. In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment, the
Employee’s estate, or such person as the Employee may have previously designated
in writing, shall be entitled to receive from the Bank the salary of the
Employee through the day on which the Employee died. If the Employee
becomes disabled, as defined in the Bank’s then current disability plan, if any,
or if the Employee is otherwise unable to perform Employee’s duties in
accordance with this Agreement, the Employee shall be entitled to receive group
and other disability income benefits of the type, if any, then provided by the
Bank. The Bank shall be entitled to terminate this Agreement and the
employment of the Employee at its discretion, after the Employee has been unable
to serve as Chief Credit Officer and Executive Vice President due to disability
for a period of 180 consecutive days.
8.
Confidential
Information and Trade Secrets
(a) Prohibition
Against Disclosure. The Employee acknowledges that, in and as
a result of employment by the Bank, the Employee will use, acquire, and develop
Confidential Information and Trade Secrets. As a material inducement
to the Bank to employ the Employee and to pay the Employee compensation for
services to be rendered to the Bank by the Employee (it being understood and
agreed by the parties hereto that such compensation shall also be paid and
received in consideration hereof), the Employee covenants and agrees that the
Employee shall not, except with the prior written consent of the Bank, directly
or indirectly, use, divulge, reveal, report, publish, transfer or disclose for
any purposes whatsoever, any Confidential Information or Trade
Secrets. The covenants of confidentiality set forth herein shall
apply at any time during the Term of the Employee’s employment with the Bank and
(i) with respect to Confidential Information, for a period of twenty four (24)
months after the termination of such employment for any reason whatsoever; and
(ii) with respect to Trade Secrets, at any and all times following the
termination of such employment for any reason whatsoever.
(b) Return
of Property. All Confidential Information and Trade Secrets
and all physical embodiments thereof received or developed by the Employee while
employed by the Bank are confidential to and are and will remain the sole and
exclusive property of the Bank. Upon request by the Bank, and in any
event upon termination of the employment of the Employee with the Bank for any
reason whatsoever, the Employee shall promptly deliver to the Bank all property
belonging to the Bank, including, without limitation, all Confidential
Information and Trade Secrets (and all physical embodiments thereof) then in the
Employee’s custody, control or possession.
(c) Confidential
Information. The term “Confidential Information” shall mean
any and all materials, data and information, other than Trade Secrets, relating
to the Bank (i) of which the Employee became aware as a consequence of or
through employment with the Bank or any other arrangement or relationship with
the Bank; (ii) which has value to the Bank and is not generally known to its
competitors; and (iii) which is treated by the Bank as confidential (whether or
not such material or information is marked
“confidential”). Confidential Information may include, but is not
limited to, information relating to the financial affairs, customers (including
without limitation customer data, customer site information, customer names and
prospect customer names), services, pricing policies, loan policies and
practices, employees, employees’ compensation, research, development, projects,
business plans, inventions, purchasing, accounting, distribution systems and
marketing of the Bank.
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(d) Trade
Secrets. The term “Trade Secrets” shall mean 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,
loan policies, loan procedures, or a list of actual or potential customers or
suppliers which is not commonly known by or available to the public and which
information: (i) 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 (ii)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
9.
Covenants
Regarding Competition
(a) Covenant
Not to Solicit Customers. During the period of twelve (12)
months immediately following the Date of Termination, for any reason whatsoever,
the Employee shall not, on the Employee’s own behalf or on behalf of any person,
firm, partnership, association, corporation, limited liability company or
business organization, entity or enterprise, solicit, contact, call upon,
communicate with or attempt to communicate with any customer or prospect of the
Bank, or any representative of any customer or prospect of the Bank, with a view
to sell or provide or attempt to sell or provide any product or service
competitive or potentially competitive with any product or service sold or
provided by the Bank during the period of twenty-four (24) months immediately
preceeding cessation of the Employee’s employment with the Bank; provided,
however, that the aforementioned restrictions set forth in this Section 9(a)
shall apply only to customers or prospects of the Bank, or representatives of
customers or prospects of the Bank, with which the Employee, or another employee
of the Bank supervised by the Employee, had contact during such twenty four (24)
month period immediately preceeding cessation of the Employee’s employment with
the Bank.
(b) Covenant
Not to Compete. During the period of twelve (12) months
immediately following the termination of Employee’s employment, for any reason
whatsoever, the Employee shall not, on the Employee’s own behalf, or on behalf
of any person, firm, partnership, association, corporation, limited liability
company or any other business organization, entity or enterprise engage,
directly or indirectly in any Competing Business within the Covenant
Territory. For purposes of this Agreement, “Competing Business” shall
mean the business of any bank or other organization of whatever form which
provides any product or service which is competitive or potentially competitive
with any product or service provided by the Bank during the period of twenty
four (24) months immediately preceeding the cessation of the Employee’s
employment with the Bank and the term “Covenant Territory” shall mean those
areas circumscribed by a line drawn at a radius of fifty (50) miles from the
Bank’s primary office locations in Albany, Georgia and Valdosta,
Georgia.
(c) Covenant
Not to Solicit Employees. During the term of the Employee’s
employment by the Bank and for a period of twenty-four (24) months following the
termination of such employment for any reason whatsoever, the Employee shall
not, either directly or indirectly, on the Employee’s own behalf, or on behalf
of others, solicit, divert, or hire, or attempt to solicit, divert, or hire, to
or for any Competing Business, any person employed by the Bank in the Covenant
Territory, whether or not the employment of any such person is pursuant to a
written agreement, for a determined period, or at will.
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(d) Remedies. The
Employee agrees that the covenants contained in Section 9 hereof are of the
essence of this Agreement; that each of such covenants is reasonable and
necessary to protect and preserve the interests and properties of the Bank and
the business of the Bank; and that irreparable loss and damage will be suffered
by the Bank should the Employee breach any of the
covenants. Therefore, the Employee agrees and consents that, in
addition to all of the remedies provided at law or in equity, the Employee shall
forfeit the right to any compensation after the Date of Termination to which the
Employee would otherwise be entitled pursuant to the provisions of either
Section 7(c) or 7(d) above and the Bank shall have the right to recoup from the
Employee any such compensation previously paid to the Employee after the Date of
Termination, with interest at the applicable legal rate, in addition to any and
all damages which may have been suffered by the Bank as a result of the
Employee’s breach of any of the covenants. The Bank shall also be
entitled to a temporary restraining order and temporary and permanent
injunctions to prevent a contemplated or continued breach of any of the
covenants. The existence of any claim, demand, action or cause of
action of the Employee against the Bank shall not constitute a defense to the
enforcement by the Bank of any of the covenants or agreements
herein.
(e) Severability. The
parties agree that each of the provisions included in this Section is separate,
distinct and severable from the other and the remaining provisions of this
Agreement, and that the invalidity or unenforceability of any provision of this
Section shall not affect the validity or enforceability of any other provision
or provisions of this Agreement.
10.
No
Assignments
This Agreement is personal
to each of the parties hereto, and neither party may assign or delegate any of
its rights or obligations hereunder without first obtaining the written consent
of the other party; provided, however, that the Bank may require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Bank
not otherwise bound by law to the terms of this Agreement, by an assumption
agreement in form and substance satisfactory to the Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform it if no such succession or
assignment had taken place. This provision is not intended to modify
the fact that this Agreement shall be binding upon successors in interest of the
Bank to the extent provided under applicable law.
11.
Heirs
and Successors
This Agreement and all
rights of the Employee hereunder shall inure to the benefit of and be
enforceable by the Employee’s personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If the Employee should die while any amounts would still be
payable to the Employee hereunder if the Employee had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Employee’s devisee, legatee or other designee
or if there is no such designee, to the Employee’s estate.
12.
Notice
For the purposes of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or sent by certified mail, return receipt requested, postage prepaid,
to the Bank at its home office, to the attention of the Bank Board with a copy
to the Secretary of the Bank, or, if to the Employee, to such home or other
address as the Employee has most recently provided in writing to the
Bank.
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13.
Amendments
No amendments or additions
to this Agreement shall be binding unless in writing and signed by both parties,
except as herein otherwise provided.
14.
Headings
The headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.
15.
Severability
The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.
16.
Governing
Law
This Agreement shall be
governed by the laws of the United States to the extent applicable and otherwise
by the laws of the State of Georgia.
17.
Arbitration
Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in accordance with the rules of the American Arbitration
Association then in effect, to the extent that said rules are not in conflict
with the Georgia Arbitration Code, and provided that said arbitration need not
be scheduled through the American Arbitration Association. The legal
and substantive provisions of the Georgia Arbitration Code shall control such
arbitration proceedings. Judgment may be entered on the arbitrator’s
award in any court having jurisdiction.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
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THIS AGREEMENT CONTAINS A
BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
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HERITAGEBANK
OF THE SOUTH
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By:
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/s/ O. Xxxxxxx Xxxxxxxx | ||||
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Name:
O. Xxxxxxx Xxxxxxxx
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Title:
Chief Executive Officer
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Signed,
sealed and delivered
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in
the presence of:
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/s/
Xxxxxxxx X. Xxxxxxx
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Notary
Public
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My
Commission Expires: April 26, 2014
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EMPLOYEE:
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/s/
O. Xxxxxxxx Xxxxx
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(SEAL)
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O. XXXXXXXX XXXXX,
Employee
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Signed,
sealed and delivered
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in
the presence of:
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/s/
Xxxxxxxx X. Xxxxxxx
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Notary
Public
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My
Commission Expires: April 26, 2014
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